The EU’s deal with Singapore contains a “most favoured nation” clause, as do other trade agreements

The EU could deny Britain a special deal on services because it would be legally bound to give the same to Canada, South Korea, Singapore, the Caribbean islands and Japan.

The British government is seeking a trade deal that keeps trade barriers low in the service industries, including financial services. The EU’s past agreements do little in these sectors.

The EU’s deals with Canada, Singapore, the Caribbean trade bloc and South Korea, however, include “most favoured nation” clauses in their chapters on trade in services. These say that the signatories cannot treat other countries more favourably than they treat each other. Japanese sources confirmed that the draft text of the EU-Japan deal also included this provision.

There are some exemptions to the rule but trade