CEO Update
Published: 4 April 2023
Is the Mood Around Trade in Washington Beginning to Shift?
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Duncan Edwards
CEO
BritishAmerican Business
In Washington DC last week for meetings with members of BAB and of Congress it was interesting to hear repeatedly that trade should be back on the agenda. There is certainly a sense that the disengagement from meaningful trade policy that has characterized the Biden administration will end up being unhelpful to the US in the long-term, leaving it with a reduced ability to shape the world outside its own borders. The UK’s announcement that it will be acceding to the CPTPP, the pacific trade group, reminded us all that this was once a project driven by the USA which was abandoned, in our view misguidedly, by the Trump administration.
From a UK perspective, the passing in parliament of the Windsor Framework must be seen as a major success in US-UK relations as well as those between the UK and the EU. The US has used post-Brexit problems in Northern Ireland as a reason for their lack of engagement in trade talks with the UK for the past two years and with these problems now solved by the new agreement, we will see if this leads to a change in approach. Certainly, the UK should feel it has earned the right to ask the question and as President Biden heads to the UK for Easter, I am sure that trade will be on Mr. Sunak’s list!
There was also recognition in Washington of a gradual change in the perception of the UK and its government. After six years of turmoil there has been a series of events which, whether you agree with the politics behind them or not, do feel like an organized and competent administration is at the wheel. The Windsor Framework, the confirmation of the first phase of AUKUS, the accession to CPTPP are all complex projects which require expertise and attention to detail and all have been achieved in the last few weeks. Problems still persist with public sector industrial action, the tortuous challenges of illegal migration and a creaking health and social care system – but a glance across the channel reminds us that everywhere has its issues to deal with.
Sustainability and the challenge of energy transition were also on the agenda in Washington and will continue to be a focus for BAB. We held a private briefing about the implementation of the Inflation Reduction Act as it pertains to green energy projects and will run a series of events on this issue for BAB members later this year. The UK government published a series of green energy initiatives on March 31st just as we released our own BAB White Paper on sustainability which you can read here. Business is ready for this huge project, but the journey is going to be bumpy and previously announced deadlines may need to be revisited. Government’s role is going to be crucial in setting the regulatory framework within which business will work and in providing the balance of incentives and penalties to drive behavior. In our view, more carrots and fewer sticks is the way to go.
Finally, it isn’t surprising to hear that the banking collapses of last month have caused some anxieties for BAB members both large and small and there is real concern in the air. Both the US and UK have so far avoided a recession and inflation is on the way down, albeit more slowly than anyone would like but the question of whether your money is safe is so fundamental that it must get the most direct and immediate attention. With big questions about the value of commercial real estate yet to be fully unpacked there is real reason for caution. As one senior financial exec put it to me last week, the lights have definitely moved to amber.
We have a packed program of in-person and virtual events throughout April and I hope to see you during the month.