The details of the economic agreement announced by Biden and Sunak – 06/08/2023 – Market

UK companies can gain access to billions of dollars in green finance following deals announced on Thursday by British Prime Minister Rishi Sunak and US President Joe Biden.

The Atlantic Declaration is expected to allow British electric car companies access to new US green credits and tax subsidies, step up cooperation on artificial intelligence, and include a data protection agreement.

Measures may be subject to congressional approval and US state agreements for some areas.

The partnership comes after hopes of a full free trade agreement were abandoned.

Sunak said the agreement “sets a new standard for economic cooperation”.

“For a while, this was not a priority, either for the US or the UK,” said the British prime minister, during a plane trip to Washington.

Tens of thousands of small British businesses could benefit from the deal, which removes trade restrictions.

“Have no doubt, the economic relationship between our two countries has never been stronger,” said Sunak, during a press conference alongside Biden.

The deal would mitigate some of the impact of the US Inflation Reduction Act (IRA) on the UK economy.

The main policy of the Biden administration is focused on strengthening the domestic energy market in the United States and includes US$ 370 billion (R$ 1.8 trillion) to boost the production of green technology.

Under current policy, the IRA provides a tax credit of $3,750 (R$18,500) for each electric vehicle manufactured in the US or that uses components that are mined, processed or manufactured in the US.

The UK is already a net exporter of EV battery raw materials to the US. But countries without a trade agreement with the US are barred from accessing IRA subsidies.

The Atlantic Declaration calls for the UK and US to work on a new Critical Minerals Agreement – which would give buyers of vehicles made with critical minerals processed, recycled or mined by UK companies access to tax credits.

The statement says the deal would be released after consultation with the US Congress.

Japan already has a similar agreement, which allows Japanese companies to also avoid export tariffs on minerals used in the production of electric vehicle batteries.

The statement also includes a commitment to a “new UK-US data bridge” that would allow UK companies to freely transfer data to certified US organizations without paying a fee.

The British government estimates that the change will affect around 55,000 UK businesses – translating into £92.4 million in direct savings per year.

Biden also supported Sunak’s plans to establish an international summit on artificial intelligence security, which will be held in the UK later this year.

“The UK and US have always pushed the boundaries of what two countries can achieve together,” said the British prime minister.

“So it’s only natural that, in the face of the greatest transformation in our economies since the industrial revolution, we look to each other to build a stronger economic future together,” added Sunak.

“The Atlantic Declaration sets a new standard for economic cooperation, propelling our economies into the future so we can protect our people, create jobs and grow our economies together.”

Both Biden and Sunak agreed to work to improve the resilience of supply chains and step up efforts to keep Vladimir Putin’s Russia out of the global civilian nuclear market.

This text was originally published here.