The United KingdomâUnited States Free Trade Agreement (UKUSFTA) is a proposed free trade agreement between the
United Kingdom and the
United States.[1]
The UK became legally able to independently negotiate
trade agreements when it
left the
European Union from 1 January 2020 due to a transition period which lasted until the UK formally exited the EU.[2] Negotiations opened in May 2020, but have stagnated since 2021 under the
Biden Administration which has focused on fixing its domestic economy.[3][4]
On 28 February 2019, the United States released its negotiating objectives.[10] The United Kingdom released its objectives on 1 March.[11] The United Kingdom and the United States began negotiations on 5 May 2020, and have had four rounds of negotiations as of September 2020.[12][13]
In December 2020, the two countries signed an agreement on various goods, continuing trading terms from previous European UnionâUnited States agreements.[14]
Biden Administration
The Biden Administration made it clear that the US would not further talks about a potential FTA, due to British threats against ratifying the
Northern Ireland Protocol which would violate
international law, with dangerous ramifications that could threaten the
Good Friday Agreement.[15][16][17][18] With the administration of President
Joe Biden uninterested in further negotiations, the United Kingdom began negotiating economic agreements with individual U.S. states.[19] Regulation of
international trade is a federal responsibility under the
Commerce Clause of the
U.S. Constitution, preventing state agreements from changing customs rules.[20] Therefore, the UK has aimed at signing
Memorandum of Understanding (MoU) agreements with numerous states.[21] MoUs aim to remove market access barriers and increase trade and investment opportunities for UK and US companies.[22] Former
British trade ministerPenny Mordaunt claimed that US state-level deals would pave the way for a full UK-US FTA.[23]
UKâUS State Memorandum of Understanding Agreements
Following President Joe Biden and
UK Prime MinisterRishi Sunak's meeting held in
Northern Ireland on 12 April 2023, talks of a UKâUS free trade agreement were postponed until at the very least 2025.[34]
In June 2023, Biden and Sunak announced the 'Atlantic Declaration' to strengthen economic ties between the UK and the US.[35] The agreement included a limited trade pact covering critical minerals needed for
EVbatteries, a new data protection deal, and easing other
trade barriers.[36][37] The declaration commits both nations to increase research collaboration in future technologies, such as
AI, future
5G and
6G telecoms,
quantum,
semiconductors and
engineering biology.[38] Further, these talks led to a commitment in principle to a new UKâUS Data Bridge that facilitates the transfer of data by UK businesses to certified U.S. organizations.[39]
During the signing of the
accession of the United Kingdom to CPTPP on the 16th of July 2023,
Kemi Badenoch blamed the lack of progress on the UK-US FTA on the change of administration from Donald Trump to Joe Biden after the 2020 election.[40] Badenoch stated that âThe US is not carrying out any free trade agreements with any countryâ.[41]
On 3 October 2023, Biden and Sunak were reported to be preparing a "foundational" trade agreement between the two countries which would be modeled off of the
Indo-Pacific Economic Framework. However this agreement will not constitute as a
free trade agreement under
World Trade Organization rules as the proposals do not contain
market access commitments.[42] The proposed partnership aims to cover subjects such as digital trade, labour protections and
agriculture.[43] On the same day, Badenoch reiterated that there was "zero" chance of a free trade agreement under President Biden's administration, citing his attitude to such deals.[44] On 18 December 2023, it was announced that all talks for the "foundational trade partnership" had been abandoned.[45]
Chapters
Areas covered in the FTA and contention points:[46]