As part of plans announced by Rishi Sunak and Joe Biden to strengthen ties between the United Kingdom and the United States, British businesses could obtain access to US green funding.
At a White House press conference, the two unveiled the Atlantic Declaration to strengthen economic connections between the two countries.
The prime minister stated that the agreement, which falls short of a comprehensive trade deal, would bring benefits “as soon as possible.”
Electric vehicle manufacturers in the United Kingdom may gain access to green tax credits and subsidies in the United States.
Mr. Sunak referred to the relationship between the United Kingdom and the United States as an “indispensable alliance” as the two countries unveiled their partnership to enhance economic security.
The Atlantic Declaration includes commitments to reduce trade barriers, strengthen ties within the defense industry, and reach a data protection agreement, as well as to increase AI cooperation.
If the new agreement was an “acknowledgment of the failure” to reach a broader trade agreement between the United Kingdom and the United States, Mr. Sunak stated that the current agreement “responds to particular challenges and opportunities we face right now.”
A United Kingdom-United States free trade agreement was a central plank of the Conservative Party’s 2019 general election platform.
Mr. Sunak asserted that the declaration’s more targeted approach centered on “what can provide the most immediate benefit to our citizens.”
Mr. Sunak stated, “There is no doubt that the economic relationship between our two countries has never been stronger.”
Plans for a comprehensive free trade agreement have been abandoned for months. On the flight to Washington, Mr. Sunak stated, “This has not been a priority for the United States or the United Kingdom for some time.”
However, Labour’s shadow foreign secretary David Lammy criticized Mr. Sunak, claiming that the government has left “Britain’s cupboards bare” by failing to secure a trade agreement.
“This statement demonstrates that the government has failed to deliver the comprehensive trade deal promised in their 2019 manifesto or to secure the ally status under the Inflation Reduction Act, which is crucial for the automotive industry and the green transition,” Mr. Lammy said.
Mr. Biden stated that the special relationship between the United States and the United Kingdom was in “excellent condition” of their cooperation in Ukraine.
“Together, we are providing economic and humanitarian aid as well as security systems to Ukraine in their fight against a brutal invasion from Russia,” he said.
New ecological funding
The Atlantic Declaration includes plans to mitigate a portion of the impact of the United States’ signature Inflation Reduction Act (IRA) on the British economy by removing trade barriers affecting electric vehicle batteries.
Under current policy, the IRA offers a tax credit of $3,750 (£3,000) for each electric vehicle (EV) manufactured in the United States or using domestically mined, processed, or manufactured components.
The United Kingdom is already a net exporter of EV battery basic materials to the United States. However, nations without a US trade agreement are unable to access IRA subsidies.
The Atlantic Declaration commits the United Kingdom and the United States to work on a new critical minerals accord that would grant tax credits to purchasers of vehicles manufactured with critical minerals processed, recycled, or mined by UK companies.
The declaration states that the agreement will be implemented following consultation with the US Congress.
Japan already has a comparable agreement, which exempts Japanese companies from export duties on minerals used to manufacture EV batteries.
“Exceeded the boundaries”
The declaration also includes a commitment to a “new UK-US Data Bridge” that would permit UK companies to transmit data freely to certified US organizations without incurring a fee.
Downing Street estimates that the change will affect approximately 55,000 enterprises in the United Kingdom, resulting in direct annual savings of £92,4 million.
Mr. Biden also supported Mr. Sunak’s plans to convene a later this year international summit on AI safety in the United Kingdom.
The prime minister stated, “The United Kingdom and the United States have always tested the limits of what two countries can accomplish together.
“When confronted with the greatest transformation in our economies since the industrial revolution, it is natural that we would turn to each other to build a stronger economic future together.
“The Atlantic Declaration sets a new standard for economic cooperation, propelling our economies into the future so that we can protect our people, create jobs, and grow our economies together.”
Mr. Biden and Mr. Sunak have agreed to strengthen the resilience of supply chains, and efforts will be intensified to prevent Vladimir Putin’s Russia from participating in the global civil nuclear market.
