Bolstering Economic Security Against China: UK and US Partnership Announcement
On Thursday, June 8, 2023, Rishi Sunak, UK Chancellor of Exchequer, and US President, Joe Biden, announced the Atlantic Declaration, a new economic partnership. Further reinforcing this announcement was Biden’s promise to Congress to approve the UK as a “domestic source” under US defense acquisition laws. This pledge would allow for the US to invest more heavily in British companies. The new agreement is focused on mitigating potential economic security threats from China as well as reaffirming the importance of UK-US relations.
Partnership Details: Tight Trade Pact, Data Protection, Defense Cooperation
As part of the newly agreed Atlantic Declaration, the UK and the US have laid out a strategy to bolster economic security and counter potential threats posed by China. The deal includes aspects such as a tight trade agreement covering critical minerals necessary for technology advancement, closer defense industry cooperation, a new data protection agreement, and reduced trade barriers, especially for small businesses. Furthermore, the agreement includes a principle deal to grant UK exporters access to the US’ $370 billion green subsidy program, which would drive significant green investment in the UK.
Biden’s and Sunak’s Announcement at the White House
Biden and Sunak’s announcement comes amidst dwindling hopes for a comprehensive free trade agreement between the two countries promised by the Conservative Party in 2019. While UK officials insisted that the new targeted approach was a better response to the economic challenges posed by Beijing and the Russian invasion of Ukraine earlier this year, negotiations for a potential free trade agreement have been frozen until at least 2025.
Despite the delay and failure to deliver on the Tory manifesto promise, both leaders emphasized the historical and indispensable nature of the UK-US alliance, enhancing collective security and prosperity. There were also pledges to improve critical supply chains to counter China’s influence, and to work on strengthening cooperation on artificial intelligence technology.
Summary:
The UK Chancellor and the US President have announced the Atlantic Declaration, a new economic partnership aimed at countering China’s potential economic threats to both countries and strengthening their alliance. The deal includes a tight trade pact covering critical minerals needed for technology, closer defense industry cooperation, lowering trade barriers, and a new data protection agreement. While the UK Conservative Party’s promise of a free trade agreement in 2019 has yet to be realized, both leaders emphasized the importance of their alliance and their readiness to combat China’s influence.
Boosting Economic Security and Countering China: An Overview of UK-US Partnership
The new UK-US partnership follows a growing trend among Western countries that aims to counteract China’s economic and military rise. The UK-US alliance, in particular, has long been a bastion of security, trade, and economic prosperity for the UK, especially as the country navigates its post-Brexit future. This cooperation between the two powers, therefore, bolsters much-needed economic security for both countries, given China’s persistent economic aggression.
However, several challenges remain, which may undermine the success of this new partnership. The first is the absence of a comprehensive free trade agreement between the two countries, which was promised to have been delivered by the end of 2022 in the Conservative Party manifesto. While the new targeted approach is seen as a more effective response to the economic challenges posed by China and the Russian invasion of Ukraine, the delay in negotiations on a free trade agreement could lead to further difficulties and tensions between the two nations.
Moreover, China’s persistent economic aggression necessitates even greater cooperation on the part of the UK and the US. The critical supply chains under threat from China’s influence need to be secured, and technology like artificial intelligence must also be developed to strengthen Western defense and economic capabilities. In addition, it would be prudent to continue to search for viable alternatives to Chinese investment, critical trade partnerships, and supply chains, to reduce reliance and vulnerabilities.
In light of these challenges, Biden and Sunak’s announcement remains a significant step forward, affirming the importance of the UK-US alliance in the face of significant global challenges. Through greater cooperation, investment, and innovation, both countries can navigate these challenges and emerge stronger and more resilient against potential threats.
Summary:
The UK-US partnership aims to counter China’s economic aggression and bolster economic security for both nations. While challenges remain, greater cooperation, investment, and innovation can strengthen defense and economic capabilities, secure critical supply chains, and provide viable alternatives to Chinese investment, critical trade partnerships, and supply chains. Biden and Sunak’s announcement is a significant step forward in affirming the importance of the UK-US alliance in the face of significant global challenges.
References:
– https://www.ft.com/content/cf6f7f02-08f4-44e4-bdda-118258957a2a
– https://www.bbc.com/news/uk-politics-61718470
– https://www.reuters.com/world/asia-pacific/uk-us-announce-partnership-tackle-chinas-challenges-2023-06-08/
– https://www.theguardian.com/politics/2023/jun/08/chancellor-rishi-sunak-meets-joe-biden-for-crunch-us-uk-talks
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The prime minister is on a whirlwind tour of the United States, meeting politicians from both parties as well as business leaders. But the free trade agreement promised in the 2019 conservative manifesto appears to have been frozen until at least 2025.
Rishi Sunak and Joe Biden have agreed to a new partnership to bolster economic security in response to the growing threat from China.
Ignoring his failure to deliver on the Tory manifesto promise of get a comprehensive free trade agreement with the US, the US Prime Minister and President announced the Atlantic Declaration during a meeting at the White House.
It was the first time Mr Sunak he had visited the house of the US presidency.
As a step:
Rishi Sunak at the White House
The deal includes a tight trade pact covering critical minerals needed for electric car batteries, closer defense industry cooperation, lowering trade barriers and a new data protection agreement.
The new agreement contains an agreement in principle for a deal on those minerals, used to make a range of products from solar panels to electric vehicles, to give UK exporters access to the huge $370 billion green subsidy program. (£294 billion), the Inflation Reduction Act, introduced by President Biden drive huge green investment in the US
Sunak said: “Countries like China and Russia are willing to manipulate and exploit our openness, steal our intellectual property, use technology for authoritarian purposes or withdraw crucial resources like energy. They will not succeed.”
“Today we have agreed to the Atlantic Declaration, a new economic partnership for a new era, of a kind that has never been agreed before.”
He said the partnership “protects our citizens” and includes new US investment for the UK, citing the £14bn pledged this week to “create thousands of jobs” and highlighting “stronger supply chains”. and reduced trade barriers “helping tens of thousands of small businesses.”
‘Indispensable alliance’
The prime minister said he and Biden have agreed to work together on artificial intelligence (AI) security, adding: “We can depend on each other with absolute conviction. When the United States and the United Kingdom come together, the world is more safer, better and more prosperous place and that is why ours is the indispensable alliance”.
Biden called the US-UK economic partnership a “source of enormous strength”.
The United States signed a similar agreement with Japan earlier this year to prohibit the two countries from enacting bilateral export restrictions on the minerals most critical for electric batteries: lithium, nickel, cobalt, graphite and manganese.
While the prime minister was quick to talk about the new deal, it is not the post-Brexit free trade deal that the Conservative Party promised to deliver by the end of 2022 in its 2019 manifesto, when a deal with the US was cited. as the main objective of the commercial agreement.
UK officials insisted that this new targeted approach was a better response to the economic challenges posed by Beijing and following the Russian invasion of Ukraine.
However, President Biden has made no secret of his disinterest in negotiating a bilateral trade deal with the UK, with negotiations now frozen until 2025 at the earliest.
Read more:
Chancellor ‘cautious’ of new subsidies as companies eye US.
Net zero in jeopardy unless the world meets lithium and copper demands
Sunak says UK-US relationship is in ‘great shape’
Asked to acknowledge that this government had failed on its election promise on Thursday, the prime minister said the “macroeconomic situation had evolved” and insisted that the economic partnership between the UK and the US was still strong and reflected new threats.
“From [that pledge] we have had a pandemic. We have had a war in the Ukraine and that has changed the macroeconomic situation. And the right response to that is to make sure that we are focusing our commitment financially on the things that will make the biggest difference to the British people,” he said.
“The real challenges we face are the threats to our economic security.”
How lithium batteries are made
In addition to the deal on critical minerals, President Biden has pledged to ask Congress to approve the UK as a “domestic source” under US defense acquisition laws, allowing for more US investment in companies British.
The two powers have also turned their attention to improving the resilience of critical supply chains in order to shut Russia out of the global civilian nuclear market. Allies are also working on semiconductor supply chains.
A data protection deal will ease the burden on small businesses doing transatlantic trade, potentially saving £92m.
https://news.sky.com/story/amp/uk-and-us-agree-new-partnership-to-boost-economic-security-as-sunak-and-biden-meet-at-white-house-12899035
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