How the US-UK “Atlantic Declaration” Could Strengthen Economic Ties and Cut China’s Supply Chains
US President Joe Biden and UK Prime Minister Rishi Sunak have agreed on a new “Atlantic Declaration” aimed at strengthening economic ties between the two nations, with a particular focus on reducing reliance on China’s main supply chains. The agreement targets a range of niche deals designed to increase trade in areas including defence, nuclear materials and critical minerals used in electric car batteries. Biden’s goal is to boost ‘economic security’ among Western allies, while Sunak is eager to lead the discussion on the regulation of artificial intelligence.
To accomplish these goals, the Atlantic Declaration will seek to create new supply chains that reduce dependence on Chinese imports. For example, UK electric car makers that use UK-made batteries or products from countries like Japan – with which the US has a critical minerals deal – will be eligible for tax credits of $3,750 per vehicle under Biden’s Cut Inflation Act. The declaration also targets other niche deals. For instance, it envisions a “data bridge” that would cut red tape for small exporting businesses. It also includes a push for mutual recognition of qualifications for engineers (and later accountants), although this may require state-by-state approval in the United States.
The agreement comes after the hope of a real US-UK free trade deal was dashed. Instead, this move by Sunak, a free trader and opponent of state subsidies, acknowledges that he must work with a Biden administration that uses industrial policy and tax advantages to promote green technologies. The UK is seeking special US deals similar to those brokered by other allies such as Japan, Australia and the EU. Biden, meanwhile, has pledged to ask Congress to approve the UK as a “national source” under US defence procurement laws.
Sunak and Biden’s Relationship
Sunak and Biden gave effusive praise to each other during the meeting, but it’s important to note that the two have differing views on key economic policies. Biden, for example, has a policy of state subsidies to promote green technologies, while Sunak is a free-market supporter who opposes state subsidies. The British Labour Opposition, on the other hand, is entirely committed to this idea – a detail worth noting since both Biden and Sunak will face voters in 2024, possibly battling concurrent election campaigns next fall.
British diplomats have admitted that clouds still hang over the relationship, reflecting in the haze caused by forest fires in Canada that darkened the American capital during Sunak’s visit. Nevertheless, the US and UK have worked closely on Ukraine and developing a military partnership – alongside Australia – that involves developing nuclear-powered submarines to counter China in the Pacific.
An Unscentimental Attempt to Improve Economic Security
Despite such differences, the Atlantic Declaration is an unsentimental attempt to forge a forward-looking US-British relationship based on economic security. In the past, the British have insisted on talking about the “special relationship” between the two countries, but Biden and other Democrats were against the UK’s exit from the EU. Sunak will undoubtedly attempt to prove that Brexit can work well for Britain and retain the country’s influence on his own continent.
Ultimately, the Atlantic Declaration will help the countries develop stronger economic ties and reduce their reliance on China’s supply chains. By working together, the countries can also help promote green technologies and combat climate change. This agreement represents a step in the right direction for both countries and builds on the strong historical relationship between the two nations.
Going Beyond the Atlantic Declaration: How Can We Achieve Stronger US-UK Relations?
The Atlantic Declaration is undoubtedly an important development for US-UK relations. However, it’s important to note that it’s only the beginning of a longer process. Here are some ways we can continue to strengthen the relationship between the US and the UK:
1. Building Stronger Diplomatic Channels – The next step in the process is to develop stronger communication channels between the two nations. This may involve increased investment in diplomatic staff and resources. It could also involve more frequent communication between officials at all levels of government.
2. Expanding Defense Cooperation – The US and UK have a long history of working together on defense, and there’s still room for the two nations to deepen this cooperation. One possibility is to expand the joint training exercises and military exchanges that currently take place between the two countries. This could help both nations develop a greater understanding of each other’s military capabilities and needs.
3. Promoting Collaboration on Emerging Technologies – Emerging technologies such as artificial intelligence, quantum computing, and 5G networks will play an increasingly important role in the global economy and national security. The US and UK can work together to develop common standards and regulatory frameworks for these technologies.
4. Continuing to Address Environmental Challenges – The Atlantic Declaration highlights a shared interest in promoting green technologies and combating climate change. The US and UK can continue to work together in this area, whether through joint research projects or collaborative efforts to reduce emissions.
By pursuing such initiatives, the US and UK can continue to build on the progress made through the Atlantic Declaration. Together, they can strengthen their economic ties, deepen their defense cooperation, and address pressing global challenges. At a time when the world is facing many uncertainties, a strong US-UK relationship can be a beacon of stability and cooperation.
Summary:
US President Joe Biden and UK Prime Minister Rishi Sunak have agreed on an “Atlantic Declaration,” which aims to strengthen economic ties between the two countries. The agreement targets niche deals in areas such as defence, nuclear materials, and critical minerals used in electric car batteries. The main goal is to reduce dependence on China’s supply chains. The Atlantic Declaration highlights the interest in promoting green technologies and combating climate change. Although the two leaders have differing views on key economic policies, they are committed to working together. However, it is only the beginning, and both countries need to work on stronger communication channels, expand defence cooperation, promote collaboration on emerging technologies, and tackle environmental challenges to strengthen their relationship further.
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US President Joe Biden and British Prime Minister Rishi Sunak agreed on Thursday to an “Atlantic Declaration” to strengthen economic ties between the two countries, a further sign that the allies are turning their backs on globalization and trying to cut the China’s main supply chains.
The declaration aims to increase US-UK trade in areas including defence, nuclear materials and critical minerals used in electric car batteries, as part of a bid by Biden to boost ‘economic security’ among Western allies.
Biden, speaking after talks between the two at the White House, endorsed Sunak’s attempt to lead the debate on the regulation of artificial intelligence, including hosting the first world summit on the issue this autumn.
“We’re counting on Britain to get us through this,” Biden said. “There is no country we trust more to help negotiate our way through this.” He added: “We are in phase.”
Sunak, speaking in the Oval Office, said the world was on the brink of the greatest technological shift since the Industrial Revolution, but it also gave adversaries “more tools to harm” Western democracies.
Biden, who apologized for accidentally calling Sunak “Mr. President,” made allusions to Roosevelt and Churchill’s wartime relationship. But British officials said the Atlantic statement was an unsentimental attempt to forge a forward-looking U.S.-British relationship based on economic security.
The deal comes after hopes of a real US-UK free trade deal – a dream of Eurosceptic Tories in Britain – were dashed.
The statement is an acknowledgment by Sunak, a free trader and opponent of state subsidies, that he must work with a Biden administration that uses industrial policy and tax advantages to promote green technologies.
It is seeking special US deals for the UK, similar to those brokered by other allies such as Japan, Australia and the EU, to create new supply chains that reduce reliance on with regard to China.
UK electric car makers using UK-made batteries – or products from countries like Japan with which the US has a critical minerals deal – will be eligible for tax credits of $3,750 $ per vehicle under Biden’s Cut Inflation Act, his flagship legislation promoting ecology. technology.
Biden has meanwhile pledged to ask Congress to approve the UK as a ‘national source’ under US defense procurement laws, which UK officials say will allow for cooperation faster and more efficient on new military technologies.
The statement also targets other niche deals, including a “data bridge” to cut red tape for small exporting businesses.
The agreement includes a push for mutual recognition of qualifications for engineers – and later accountants – although this may require state-by-state approval in the United States.
Sunak said people had wondered what kind of partner Britain would be after Brexit, adding: “Judge us by our actions.”
The Prime Minister said the UK remained an attractive investment destination and Britain could now act “faster and more flexibly” to create new rules for emerging technologies such as AI.
There were a few effusive words between the two leaders. Biden said “no country is closer to us than the UK”, while Sunak spoke of “the indispensable alliance”.
But British diplomats have admitted clouds still hang over the relationship, reflected in the haze caused by forest fires in Canada which darkened the American capital during Sunak’s visit.
On the positive side, the US and UK have worked closely on Ukraine and developing a military partnership – alongside Australia — developing nuclear-powered submarines to counter China in the Pacific.
Sunak also helped win Biden’s trust by resolving the post-Brexit dispute over Northern Ireland trade deals, although the US president said in May he had to visit Ireland to “ensure that the British are not mistaken”.
“I’m lucky to have a good relationship with President Biden,” Sunak told reporters, while avoiding repeating the old hackneyed British assertion of having a “special relationship” with the United States.
But Biden was a Brexit critic, and Democrats can’t understand why Sunak – who backed Britain’s exit from the EU – restricted the country’s influence on his own continent.
Biden and free-market Sunak also disagree on the presidential policy of state subsidies to promote green technologies. The British Labor Oppositionon the other hand, is entirely committed to the idea.
But the two face voters in 2024 – possibly battling concurrent election campaigns next fall – adding to a list of challenges bringing the two leaders closer together.
https://www.ft.com/content/8f1667f8-f17b-4a56-82af-97fd812c4fe6
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