The UK has today (13 March) signed a trade agreement with Texas, which the government hopes will boost trade and investment.
Business and trade secretary Kemi Badenoch signed the agreement with Texan governor Greg Abbott on his trip to London today.
The government hopes that the Statement of Mutual Cooperation (SMC) will strengthen trade between the UK and Texas by making it “quicker, easier and cheaper” for firms to do business together.
The Department of Business and Trade (DBT) says the arrangement is targeted at sectors where the UK and Texas have shared expertise, such as new energy – which includes hydrogen and carbon capture, utilisation, and storage – life sciences and professional business services.
Downing Street meeting
Badenoch said:
“Today’s signature with Texas marks the UK’s eighth US state-level pact, meaning UK firms now have access to states with a combined GDP of £5.3tn – equivalent to a quarter of the whole US economy. This shows our US state-level strategy is working and really delivering for British businesses.”
Abbott said:
“Strengthening the bond between Texas and the United Kingdom is crucial for our shared economies to prosper.”
Texas has the second largest economy within the US, with a total GDP of £1.9tn in 2022.
Total trade in goods between the UK and Texas was worth £14.7bn in 2023, according to a DBT factsheet, with the top products being exported to Texas including nuclear equipment, aircraft, and pharmaceutical products.
The IOE&IT perspective
Marco Forgione, director general of the Institute of Export & International Trade (IOE&IT), said:
“The news that that the government has secured an agreement with the great state of Texas is welcome for importers and exporters. Building up unique connections with each US state is important and valuable, and gives UK traders access to new marketplaces.
“The agreement has the potential to boost many of the UK’s sectors, from trade in medical services to building up the UK’s green energy supply chain.”
‘Delighted’
Concrete Canvas director and IOE&IT member, William Crawford, said:
“As a UK business with our US headquarters in Houston, we are delighted with the news that the UK-Texas SMC has been signed. This will help to strengthen ties with this key US state and help Concrete Canvas achieve our ambitions for further growth and investment across the US.”
Policy
The agreement with Texas marks the eighth agreement that the UK has signed with an individual US state, with the most recent being Florida in November 2023.
The UK has pursued this state-level strategy under successive prime ministers, after president Joe Biden said that his administration would not pursue a federal trade agreement with the UK.
However, Sam Lowe, partner at Flint Global, previously told the Guardian that state-level deals have a limited impact compared to country-wide agreements because they don’t include preferential tariffs.
Trade expert David Henig said on Twitter that there was “so far no sign of any results from any” of the state-level deals, calling it an example of “announcement over implementation”.
DBT says it is in “active discussions” with several US states, including California, Colorado and Illinois.
