(Bloomberg) -- UK Prime Minister Rishi Sunak will seek closer economic ties with the US during his first visit as leader to the White House, even as Joe Biden’s administration maintains a freeze on talks on a free-trade agreement.
The two-day visit, in which Sunak will meet congressional leaders and company executives, will be his most extensive interaction with Biden — and their fourth meeting in as many months. They’re also due to discuss Russia’s war in Ukraine, Chinese aggression and the regulation of artificial intelligence. On the plane to Washington late on Tuesday, Sunak told reporters he intends to discuss how the US can damp the knock-on effects of US clean technology subsidies on the British economy.
Read More: Five Things to Watch as UK’s Sunak Visits Biden in Washington
Against that backdrop, Sunak will call for the US and UK to raise their economic alliance to a par with their defensive one. In a statement before his trip, which also takes in a Washington Nationals baseball game, Sunak’s office put the value of existing trade ties at an annual £279 billion ($346 billion) and touted £14 billion of what it called new investments by US companies in Britain.
“We need to build an alliance that also protects our economies,” Sunak said in the statement. “Just as interoperability between our militaries has given us a battlefield advantage over our adversaries, greater economic interoperability will give us a crucial edge in the decades ahead.”
Even though successive Conservative administrations touted an FTA with the US as a key prize of Brexit, Sunak’s office said the premier will not push for negotiations to restart. Five rounds of talks were held under former President Donald Trump before Biden put a stop to them.
But people familiar with the matter told Bloomberg this year that Britain seeks a trade deal in “all but name,” and Sunak’s administration sees scope for joint efforts to shore up crucial supply chains and protect key industries, including energy and semiconductors.
En route to Washington, Sunak was asked about an earlier US assurance to take the “rough edges” off of its massive package of tax breaks and subsidies for clean technologies to ensure it doesn’t damage investment in the UK and other allies.
‘Competitive Advantage’
“It’s something that he and I have discussed in the past and you’d expect us to continue discussing it,” he said. He declined to be drawn on specific measures he’d like the Biden administration to take.
He also said the UK, US and other Group of Seven nations “don’t believe in protectionism as the answer to this challenge and also don’t believe in in subsidy races that are zero sum.”
The prime minister defended the UK record in decarbonizing faster than any major economy and pointed to British leadership in offshore wind power, floating wind turbines and carbon capture and storage technology. “There’s lots of different areas where we have a global competitive advantage that we can export around the world,” he said.
Sunak’s office was eager to point to £14 billion of new investment by US firms, made since October 2022 but “announced today,” that it said created 2,500 jobs. The bulk of that — £9 billion — comes from money manager BlackRock Inc., bringing its total investments in Britain to £500 billion, according to the statement. That figure comprises assets in exchange traded funds, index and mutual funds, as well as alternatives and direct investment in UK projects.
Fellow money managers Blackstone Inc. and KKR & Co. account for most of the rest, with investments of £2.4 billion and £2 billion.
Other investments in Britain outlined by Sunak’s office include:
- A £200 million investment by World Fuel Services Corp. through its stake in hydrogen developer Meld
- A £350 million investment by Mars Inc. in a new facility near London
- Expansions by Vanguard Group Inc. and Bank of New York Mellon Corp. in Manchester
- A £33 million Investment by HCA Healthcare Inc. in a hospital in Birmingham
--With assistance from Loukia Gyftopoulou.
(Updates to add Sunak comments in second, eighth-11th paragraphs)
©2023 Bloomberg L.P.
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