How the UK does diplomacy with US states
15th November 2023
A trade deal with the US has long been a holy grail for Brexiteers, not least because it is something that the European Union has failed to achieve. Barack Obama said Britain would have to go to the “back of the queue,” then Donald Trump said Britain was at the front of the queue. Unfortunately, though, Trump wasn’t minded to serve anyone before being replaced by Joe Biden, who has shown a similar lack of interest in trade deals. Indeed, Biden has returned the US to an age of protectionism through his bizarrely named Inflation Reduction Act, which offers grants and subsidies to green industries — so long as they are based in the US.
But Britain has now worked out an alternative strategy for the US: carry on dealing with the federal government, but work on agreements with individual states while you are waiting. The latest installment is a “memorandum of understanding” with Florida, signed by Governor Ron DeSantis and the UK’s trade secretary Kemi Badenoch today. It joins similar agreements with North Carolina, South Carolina, Oklahoma, Washington and Utah. But the deal with Florida is the most significant, given that it has the fourth highest GDP of any US state, with an economy around the size of Spain’s. Moreover, Florida is the base of much of the US’s space industry, which is a sector in which Britain is especially strong.
These agreements are undoubtedly a good thing, but they shouldn’t be mistaken for trade deals. They do not remove any tariffs or set up any legal process for trade disputes, other than what already exists under World Trade Organization rules. Rather they consist of an agreement to discuss and possibly lower non-tariff barriers to trade, to share academic research, set up worker exchange programs and hold trade fairs and the like.