Recent developments in European integration for services

This paper extends and updates the previous estimates for European integration in non-financial commercial services for 2008 with EU-28 results for 2017 and country level results for 2016, the most recent years available. Foreign direct investment is still the dominant form of internationalization for services but some knowledge intensive business services are now being supplied cross-border rather than by FDI. Levels of integration differ markedly between EU countries but there has been some convergence since 2008. On BREXIT the EU market becomes both smaller and less integrated. For the non-financial services covered by this paper, the EU runs a small surplus with the UK on cross-border trade contrary to financial services. The EU also invests much more for services in the UK than the UK invests in the EU.