UK Edition
US states keen to seal trade agreements with Britain worth billions
A trade agreement with New York or California would be worth billions to the UK economy, according to an adviser to the Department for International Trade (DIT).
US Census Bureau figures show that in 2018, UK exports to New York, California, Texas and Georgia were worth more than $5bn (£3.8bn) per state in 2018.
Paul Grossman, director of US trade at OCO Global, a Belfast-based trade and investment consultancy firm that works with DIT, said billions more dollars worth of trade with these states could be added through enhanced diplomacy targeted at the state level, for example to create opportunities for government procurement and remove non-tariff barriers.
In March, OCO Global is managing a trade mission of 10 states – including Mississippi, South Carolina, Georgia, Virginia, Maryland, Tennessee and Oregon – to London to meet officials from DIT.
“The states recognise that it’s a time in history when they can recoup the benefit of building strong relationships with the businesses that the UK Government helps to export,” Mr Grossman said. “If you want to get the work done – the doors opened and the deals closed – that’s done at the state level.”
The former trade secretary Liam Fox proposed last week that Boris Johnson should negotiate agreements with individual US states as a backstop while he tries to strike a post-Brexit free-trade agreement with America, which it is hoped would focus minds in Brussels to seal an EU-UK deal by the end of this year so that the Brexit transition period does not need to be extended.
Anne Pardalos, director of the International Trade and Investment Office at the Missouri Department of Economic Development, said her state was likewise keen to boost imports of British agricultural technologies and advanced manufacturing products and doing so would add pressure from below on federal officials to complete a US-UK deal.
She said: “You want the state officials to be telling the elected officials in Washington that they really want this deal so that you have a voice in the room whether the UK is there or not.”
A team of 70 civil servants, led by Oliver Griffiths, has been set up to lead the US trade talks, while David Frost, the chief Brexit negotiator, is in charge of preparations for the EU talks.
Ms Pardalos added: “The Canadians put their best people on the US file. If the UK wants to improve the relationship with the US, it’s got to make the commitment in terms of resources, people and time.”
Allie Renison, head of EU and trade policy at the Institute of Directors, said: “If we are serious about increasing trade with the US, it has to be a multifaceted strategic approach, not one which rests on – or is gauged solely by – having a free-trade agreement.”
Figures from the Office for National Statistics show that the US was the leading market for British service exports, including legal services, accounting, management consultancy and engineering last year.
Ms Renison added, however, that one issue faced by British insurance suppliers to America was variations in collateral requirements across state borders due to differing regulatory frameworks.
Emily Jones, a professor of public policy at Oxford University, agreed, citing a 49-page mutual recognition agreement between Engineers Canada and the Texas Board of Professional Engineers that makes it easier for Canadians to work in Texas.
“It’s clearly not feasible to negotiate agreements with all 54 US states for every regulated profession but UK services firms will be able to identify the US states where there is real potential to expand UK exports and where obtaining a professional licence is particularly cumbersome,” she said.
“While the major free-trade agreements between governments grab the headlines, these very specific and technical agreements could really make a difference for UK services exporters.”