Sunak Hails ‘Atlantic Declaration’ Despite Abandoning UK-US Free Trade Deal

The British prime minister ducks suggestion of "failure" while meeting president Joe Biden for talks in the White House on the “indispensable alliance”.
British prime minister Rishi Sunak during a joint press conference with US president Joe Biden in the East Room at the White House.
British prime minister Rishi Sunak during a joint press conference with US president Joe Biden in the East Room at the White House.
Pool via Getty Images

Rishi Sunak and Joe Biden have agreed a new partnership that the British prime minister said cements the “indispensable alliance” between the UK and US – but the deal fell well short of a prized and full-blown free trade deal.

The Atlantic Declaration, announced as the PM and US president met in the White House, includes commitments on easing trade barriers, closer defence industry ties and a data protection deal.

UK officials insisted the new, “targeted” approach was a better response to the economic challenges posed by China and Russia’s invasion of Ukraine than a trade deal – which has long been hailed by Brexiteers as one of the potential benefits of leaving the EU.

During a joint press conference in Washington DC where the declaration was announced, Sunak was pressed by the BBC’s political Chris Mason on whether the lack of a free trade deal represented “failure” to deliver on a 2019 manifesto promise.

Sunak replied the declaration was a response to the “particular opportunities and challenges we face right now and into the future” and that the UK-US relationship is “strong and booming”.

For the president’s part, Biden said: “It’s a testament to the depth, breadth and I would argue the intensity of our co-operation and coordination which continues to exist between the United Kingdom and the United States.

“There’s no issue of global importance – none – that our nations are not leading together.”

What’s in The Atlantic Declaration?

The deal mitigates some of the issues cause by Biden’s Inflation Reduction Act (IRA), with proposals for a critical minerals agreement to remove barriers which affected trade in electric vehicle batteries.

An agreement would give buyers of vehicles made using critical minerals processed, recycled or mined by UK companies access to tax credits in line with the IRA.

The Inflation Reduction Act provides a $3,750 incentive for each vehicle, on conditions including that the critical minerals used in its production – principally used in the battery – are sourced from the US or a country with whom the US has a critical minerals agreement.

An agreement could help companies all over the UK, including firms carrying out nickel production in Wales and lithium processing in Teesside.

Biden has committed to ask Congress to approve the UK as a “domestic source” under US defence procurement laws, allowing for greater American investment in British firms.

Work will be carried out to improve the resilience of supply chains and efforts will be stepped up to shut Vladimir Putin’s Russia out of the global civil nuclear market.

The agreement will also include a push for mutual recognition of qualifications for engineers, although this could require state-by-state approval in the US.

A deal on data protection will ease burdens for small firms doing transatlantic trade, potentially saving £92 million.

The two nations will also collaborate on key industries – artificial intelligence, 5G and 6G telecoms, quantum computing, semiconductors and engineering biology.

It also commits the UK and US to partnership across all forms of space activity, including on communications and space nuclear power and propulsion.

Why not a proper trade deal?

Officials believe the deal is a less sentimental and more pragmatic approach to the UK-US “special relationship”, based on the need to ensure the allies can maintain their economic power and security.

The global energy shock caused by Russia’s invasion of Ukraine illustrated the vulnerability of major economies reliant on supply chains beyond their political allies.

There are fears that a Chinese invasion of Taiwan could cause a similar economic meltdown due to the disputed territory’s significance in global semiconductor supplies.

Labour said the absence of a trade deal in the Atlantic Declaration represented a “failure”.

Shadow foreign secretary David Lammy said: “This statement shows the Conservative government has failed to deliver the comprehensive trade deal they promised in the 2019 manifesto, or to secure the ally status under the Inflation Reduction Act that is so important for the automotive sector and for the green transition.

“While the Biden administration have enacted the Inflation Reduction Act to de-risk its economy from China and create jobs at home, the Conservatives have left Britain’s cupboards bare. Instead of taking similar action, the chancellor has attacked the US approach as ‘dangerous’ and ‘not the British way’.”


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