By Alistair Smout and Andrea Shalal
LONDON/WASHINGTON (Reuters) – Britain is set to sign its first state-level trade deal with the U.S. corn-producing state of Indiana on Friday, as London seeks to expand business ties despite Washington’s decision to halt talks on a national deal. Through this, the UK will sign more state-level trade deals. horizontal free trade agreement.
Britain is working with about 20 states to secure separate trade deals, with the top eight states alone accounting for about 20 percent of the U.S. economy in the absence of a broader deal with Washington, trade policy Penny Mordaunt said.
International Trade Secretary Ranil Jayawardena will sign a memorandum of understanding (MoU) with Indiana Governor Eric Holcomb on Friday, with more deals to follow.
“As soon as the U.S. is ready, we are ready to negotiate a U.S. free trade agreement. But we don’t want to wait, and that’s why we have these trade and economic agreements with the states,” Jayawardene told Reuters.
He declined to provide details before signing the memorandum of understanding, but said it would help lower barriers to market entry for British companies, potentially boosting jobs and wages in areas such as advanced manufacturing, pharmaceuticals and renewable energy.
The agreement will also simplify the procurement process, make it easier for academia to collaborate, and ensure that the professional qualifications of both parties are recognised.
The U.K. currently buys more than $1.5 billion worth of goods and services from Indiana each year, or about 1 percent of total U.S. exports to the U.K.
U.S. trade agreements are typically negotiated and signed at the national level, but foreign governments have long sought stronger ties with individual states and cities.
London had seen a free trade agreement with the United States as one of the biggest incentives for leaving the European Union. But hopes of a quick deal were dashed when the incoming Biden administration put all free trade talks on hold.
They are currently engaged in strategic dialogue on expanding their bilateral trade relationship worth $260 billion, with the third round of talks scheduled to take place in Boston in June.
Britain has been moving forward with post-Brexit trade talks, starting talks with Canada and Mexico as part of a foreign policy tilt toward the Pacific.
Officials in London remain hopeful that talks with Washington will eventually lead to an overarching free trade agreement.
Some U.S. lawmakers, who must ratify the trade deal, say a trade deal with Britain is impossible if the U.K. goes ahead with plans to unilaterally scrap some of the rules it agreed with the European Union on trade with Northern Ireland under its Brexit deal. group.