WASHINGTON, DC – Rishi Sunak and Joe Biden have committed to a cooperation deal on defense and critical minerals as the British prime minister moves away from a post-Brexit vision of unfettered free trade in favor of mutual protection.
The Atlantic Statement, announced when the two men met at the White House, includes pledges to ease some trade barriers, strengthen ties with the defense industry and strike a deal on data protection in the face of China’s growing influence.
« The economic relationship between our two countries has never been stronger, » Sunak said Thursday at a joint White House news conference. « The relationship is strong – it is booming – but our agreement today focuses on the particular challenges and opportunities of the moment in which we find ourselves. »
The two nations have promised to immediately begin negotiating a deal to mitigate the impact of Biden’s Inflation Reduction Act (IRA), which prevents nations without a U.S. trade deal from accessing the law’s tax credits and subsidies.
Sunak hailed « a new standard for economic cooperation » after abandoning the entire free trade deal promised in the wake of Brexit, with British officials praising the new approach as a better response to challenges posed by Beijing and the Russian invasion of Ukraine.
Biden pledged to give the UK access to critical minerals in a deal similar to the one the US made with Japan, easing barriers affecting electric vehicle batteries.
The US president signed the IRA last August in a bid to reduce EV supply chains’ dependence on China. The move sparked fears of a withdrawal of investment from automakers in nations without a free trade agreement with the United States
But under terms of the deal, which has yet to be finalized, UK electric car makers will be able to get half of the $7,500 tax credits available to US companies under the IRA.
“A fundamental shift is taking place in terms of international trade,” Biden said. “During the pandemic we found that the reason we couldn’t build cars was that the company we got our semiconductors from in Southeast Asia had closed down due to the pandemic. I decided that we would no longer rely on a support center for any of the things needed for economic growth.
« I made it clear to our NATO allies and also to our partners that although we would generate, for example, semiconductor capabilities here in the United States… that was available to all of our allies, all of our friends. »
Biden has pledged to ask Congress to approve the UK as an « inside source » under US defense procurement laws, allowing for more American investment in British firms.
Work will be done to improve the resilience of supply chains and efforts will be stepped up to exclude Vladimir Putin’s Russia from the global civilian nuclear market.
The agreement will also include a push towards mutual recognition of qualifications for engineers, although this may require state-by-state approval in the U.S.
A data protection deal will ease the burden for small businesses trading transatlantic, potentially saving £92m.
The two nations will also collaborate on key areas: artificial intelligence, 5G and 6G telecommunications, quantum computing, semiconductors and engineering biology.
The United States confirmed its support for Britain’s ambitions to broker international efforts to ensure the safe development of AI, starting with a summit to be held in the UK later this year.
This article was updated following the joint press conference at the White House.