Stephen Hunsaker analyses the recent agreement reached between the UK and the US – which resolved to deepen the transatlantic relationship – suggesting that while it’s a far cry from a UK-US free trade agreement, Sunak will still be seeing it as a win.
Over the past 80 years, the UK and US have signed several documents named after the ocean that separates them. Last week, they signed another. The 2023 Atlantic Declaration, however, will not have the impact of the Atlantic Charter of 1941. Nor is it the free trade agreement that British politicians have longed for since 2016.
That being said, it has the potential to be more effective than the New Atlantic Charter signed by Boris Johnson in 2021 which, in itself, represents something of a win for our current Prime Minister.
The Atlantic Charter, signed by Churchill and Roosevelt at the height of the Second World War, served as the foundation for the United Nations and set out ambitious goals related to free trade, global cooperation, and self-determination. Sunak was hardly going to set his ambitions that high.
The Atlantic Declaration for a Twenty-First Century US-UK Economic Partnership resolves to deepen the transatlantic relationship. It aims to do so on the basis of five pillars: secure US-UK leadership in critical technologies, enhance cooperation in economic security and technology protection, promote responsible digital transformation, develop the clean energy economy, and strengthen the alliance in defence, health security, and space.
To achieve these aims the two countries agree to build towards more resilient and secure supply chains and to hold biannual meetings to develop and drive cooperation on the declaration. The agreement also commits to plugging funding gaps in emerging technologies through a US-UK Strategic Technologies Investor Council. It commits both states to further enhance nuclear collaboration among AUKUS nations and strengthen cooperation on biological security to prepare against future pandemic threats.
The UK intends the Charter to provide ‘a new economic security framework covering ever-closer cooperation on critical and emerging technologies and stronger protective toolkits’. A key element of this is Biden agreeing to launch the Global Summit on AI Safety in the UK later this year. Sunak is eager to put the UK at the forefront of AI, even cultivating a ‘tech bro’ persona to try and convince the tech world. The summit will keep the UK at the table after being apparently sidelined from the EU-US Trade and Technology Council, set up in 2021 to increase trade and investment between the EU and the US.
Beyond AI, Sunak hoped the centrepiece of the declaration would be a signed critical minerals agreement to ensure the UK wasn’t left out of US Inflation Reduction Act (IRA), with its massive $369bn of green subsidies. The agreement would have allowed critical minerals extracted in the UK, used in batteries for electric vehicles, to be eligible for the $7,500 tax credit part of IRA.
Since the UK cannot compete with the scale of the US IRA, ensuring a carve-out for UK businesses was essential. In the end, however, the agreement was not signed. Rather, the two sides agreed in the declaration to launch a congressional consultation to begin drafting the critical minerals agreement.
All said and done, Sunak knew that the Atlantic Declaration was a far cry from a free trade agreement between the US and the UK. While the document is full of well-intentioned commitments and promises of future partnerships, even the ‘Action Plan’ contains few actual commitments.
Critically for those hoping for closer economic trading links, it lacks any commitments towards the harmonisation of regulatory procedures, mutual recognition of professional qualifications, or rules for digital trade flows, to name but a few obvious issues.
Yet – and in today’s Conservative Party this matters, with Sunak positioning himself as the practical PM who can get things done – he achieved more than Mr Johnson did with his New Atlantic Charter in 2021. Then, Johnson’s hope was that the deal would soon lead to a free trade agreement. However, its eight commitments contained little more than platitudes: ‘strengthen the institutions, harness our innovative edge, defend the institutions of democracy, and unite behind the principles of sovereignty’. There was not a single tangible commitment in the 640-odd word document, which reads more like a token gesture for Johnson from a sympathetic US administration, but which displayed little intention of signing anything more substantive. This is evident in the consequences: Johnson was unable to deliver a US free trade agreement during his premiership.
The Atlantic Declaration, by contrast, seems somewhat more substantive. While it is unlikely to bring the UK any closer to a free trade agreement, it secured an upcoming AI summit, an investor council, bi-annual meetings, and talks over critical minerals. It may not be much, but it’s more than was achieved by Sunak’s predecessor – and for him, that’s a win.
By Stephen Hunsaker, researcher, UK in a Changing Europe.
