UK and US state of Texas approve trade co-operation agreement

The government's new deal with Texas marks the UK’s eighth US state-level agreement

Kemi Badenoch, Britain's Secretary of State for Business and Trade, speaks at Chatham House on March 7, 2024 in London, England. Getty Images

The UK and the US state of Texas will sign an agreement on Tuesday for closer trade co-operation as the government pursues state-level deals in the absence of a wider free trade agreement with the America.

The agreement will be formally signed in Westminster on Wednesday by Trade Secretary Kemi Badenoch and Texas Governor Greg Abbott.

Although not a trade deal, because US states do not have the power to sign them, it is similar to a preliminary agreement designed to improve co-operation between businesses in Britain and Texas and tackle regulatory barriers to trade.

“I’m delighted to welcome Governor Abbott to the UK for this landmark signing," Ms Badenoch said.

“Today’s signature with Texas marks the UK’s eighth US state-level pact, meaning UK firms now have access to states with a combined GDP of £5.3 trillion [$6.8 trillion] – equivalent to a quarter of the whole US economy.

"This shows our US state-level strategy is working and really delivering for British businesses.”

The agreement is aimed particularly at the energy sector, as well as life sciences and business services.

Even before the signing of the agreement, British businesses had already enjoyed success in Texas.

The government’s BioBridge collaboration with the Texas Medical Centre has helped 30 UK life sciences companies to grow their business in the state.

“As our ninth-largest trade partner, the United Kingdom plays a critical role in the Texas economic juggernaut," Mr Abbott said.

“Strengthening the bond between Texas and the United Kingdom is crucial for our shared economies to prosper.

“By signing this Statement of Mutual Co-operation today, we will further promote economic growth on both sides of the Atlantic.

“Texas is the economic engine of America, where entrepreneurs from around the globe can cast a vision and know they can achieve it.

"Working with our British partners, we will chart a greater path towards success and opportunity, and create an even more robust economic partnership.”

Achieving a free trade agreement with America had been part of the Conservatives’ 2019 manifesto.

But progress towards a deal has stalled, with Ms Badenoch blaming a lack of interest on the part of the current US administration.

Instead, the UK has pursued state-level deals, including with Indiana in May 2022 and most recently with Florida in November last year.

Although these agreements do not lower tariffs as a free-trade deal would, they can provide some help for businesses through recognising UK qualifications or addressing state-level regulatory issues.