UK and Texas Sign Trade Pact to Boost Clean Energy Solutions

2024-03-13 17:21:20.635000

The State of Texas and the United Kingdom have signed a trade pact, called the Statement of Mutual Cooperation (SMC), aimed at boosting investment and trade cooperation in new energy solutions, life sciences, and professional services. This trade agreement marks the UK's most substantial economic agreement with a US state to date. It builds upon the existing commitment of both regions to renewable energy and sustainable development. The pact will focus on sectors where the UK and Texas have shared expertise, such as new energy solutions, including hydrogen and carbon capture, utilization, and storage.

The trade deal aims to simplify business operations, enhance investments, and boost trade between the UK and Texas. Texas, with the second-largest state economy in the US, and the UK have a strong bilateral trade relationship. In 2023, the UK was Texas' 8th largest international goods export market, with total trade in goods worth £14.7 billion (~$18.82 billion). The trade pact between Texas and the UK follows the UK-Florida memorandum of understanding (MoU) and brings the number of agreements with US states up to eight, worth a combined GDP of £5.3 trillion (~$6.79 trillion).

The trade agreement between Texas and the UK strengthens bilateral ties, promotes economic growth, and drives innovation in key sectors such as new energy solutions, life sciences, and professional business services. By leveraging their shared expertise, both regions aim to accelerate the adoption of new energy solutions and promote the growth of green industries. The UK aims to create over 12,000 jobs and generate up to $14 billion of investment by 2030 in the hydrogen sector alone. This trade pact reflects the shared commitment of both regions to sustainable development and the transition to a low-carbon economy.

Governor Greg Abbott's visit to London highlights the importance of state-level agreements in the absence of a wider free trade agreement between the UK and the US. The success of these state-level agreements, including the one with Texas, demonstrates the benefits they bring to British businesses. The UK has pursued similar agreements with other US states, such as Florida and California, providing access to states with a combined GDP of £5.3 trillion ($6.8 trillion), opening up significant opportunities for trade and investment.

The trade pact between Texas and the UK is expected to create new opportunities for businesses in both regions. By facilitating easier and more cost-effective business operations, the agreement enables UK firms to gain a competitive edge in the Texas market. It also paves the way for deeper economic cooperation between Texas and the UK in the future.

UK Trade Secretary Kemi Badenoch signed the trade agreement with Texas Governor Greg Abbott after failing to secure a post-Brexit deal with the wider United States. This is the UK's eighth state-level pact with the US, giving UK firms access to states with a combined GDP of £5.3 trillion ($6.8 trillion). Other US states, including Florida and Indiana, have also signed similar agreements with the UK. The UK government has been seeking to sign new trade pacts to demonstrate the benefits of leaving the EU. Negotiations with Canada have also stalled.

The UK has signed an agreement on closer trade co-operation with Texas as the Government continues to pursue state-level deals in the absence of a wider free trade agreement with the US. Trade Secretary Kemi Badenoch and Texas Governor Greg Abbott formally signed the agreement in Westminster on Wednesday. Prime Minister Rishi Sunak called it an “exciting moment”. The agreement marked the UK’s eighth US state-level pact, meaning UK firms now have access to states with a combined GDP of £5.3 trillion, which is equivalent to a quarter of the whole US economy. It is targeted particularly at the energy sector, as well as life sciences and business services.

In conclusion, the trade pact between Texas and the UK strengthens bilateral ties, promotes economic growth, and drives innovation in key sectors such as new energy solutions, life sciences, and professional business services. It reflects the shared commitment of both regions to sustainable development and the transition to a low-carbon economy. The agreement aims to boost investment and trade cooperation in clean energy solutions, leveraging the shared expertise of the UK and Texas in this sector. By facilitating easier business operations, the pact creates new opportunities for businesses in both regions and enables UK firms to gain a competitive edge in the Texas market. This state-level agreement demonstrates the benefits of pursuing trade pacts with US states in the absence of a wider free trade agreement between the UK and the US.

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