PRESS RELEASE : UK signs trade pact with second biggest US state – Texas [March 2024]

The press release issued by the Department for Business and Trade on 13 March 2024.

UK and Texas sign a trade pact to boost investment and trade cooperation.

• Texas is the largest and eighth US state to conclude a trade pact with the UK, bringing the combined GDP to £5.3 trillion – a quarter of US GDP
• Statement of Mutual Cooperation will strengthen trade between the UK and Texas
• Pact will benefit key sectors including energy, life sciences, and professional services

The UK will today [Wednesday 13 March] sign a trade pact with Texas to boost trade and investment ties between the UK and Texas, as Business and Trade Secretary Kemi Badenoch welcomes Texas Governor Greg Abbott to London.

Texas has the second largest US state economy, with a GDP of £1.9 trillion in 2022 – larger than Italy, making this the UK’s most economically significant trade pact with a US state to date.

The pact aims to help make it quicker, easier, and cheaper for UK and Texas firms to do business by tackling trade barriers, growing investment, and driving commerce between the UK and Texas.

The UK is Texas’ 8th largest international goods export market, with total trade in goods already worth £14.7 billion in 2023. The top products being exported to Texas include nuclear equipment, aircraft, and pharmaceutical products.

This arrangement is targeted at sectors where the UK and Texas have shared expertise such as new energy solutions – including hydrogen and carbon capture, utilisation, and storage, life sciences, and professional business services.

The signing comes just four months on from agreeing the UK-Florida Memorandum of Understanding (MoU), bringing the number of agreements with US states up to eight – worth a combined GDP of £5.3 trillion, which is greater than that of Japan and equivalent to a quarter of the US economy.

Business and Trade Secretary Kemi Badenoch said:

I’m delighted to welcome Governor Abbott to the UK for this landmark signing.

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 – equivalent to a quarter of the whole US economy. This shows our US state-level strategy is working and really delivering for British businesses.

Prioritising cooperation on innovative energy solutions such as hydrogen will help the UK to go further in achieving its aim to unlock more than 12,000 jobs and up to £11 billion of investment by 2030 in the hydrogen sector.

The UK Government’s landmark ‘BioBridge’ collaboration with the Texas Medical Center, the world’s largest medical complex, has already supported more than 30 innovative UK life sciences companies to grow their businesses in Texas – this SMC will help deepen economic ties in this critical sector even further.

The pact will also support recognition of professional qualifications. Texas is already signed up to the mutual recognition agreement for architects which UK and US bodies concluded last year, and there is ongoing work towards a similar agreement for engineering.

Texas Governor Greg Abbott said:

As our ninth largest trade partner, the United Kingdom plays a critical role in the Texas economic juggernaut.

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

By signing this Statement of Mutual Cooperation 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.

Paxman Coolers Chief Executive Officer Richard Paxman said:

We are thrilled to hear that the UK and Texas have signed a SMC to enhance trade and economic development ties. We have been working in Texas since 2013, setting up our US HQ in Houston in the heart of the Texas Medical Center. This dynamic state is one of our largest US markets, representing 20% of our $10m business.

Concrete Canvas Director William Crawford said:

As a UK business with our US Headquarters in Houston, we are delighted with the news that the UK-Texas SMC has been signed. This will help to strengthen ties with this key US state and help Concrete Canvas achieve our ambitions for further growth and investment across the US.

UK companies are already making use of close UK-US trading ties, thanks to MoUs already signed. For example, leading innovator in surgical training technologies Merseyside-based Inovus Medical launched their US HQ in Tampa Bay in December 2023 – just one month after signature of the UK-Florida MoU. By choosing Florida as its US base in light of its robust healthcare ecosystem and thriving innovation and technology status, Innovus Medical has seen significant growth in the US.

Read the text of the UK and Texas trade and economic statement of mutual cooperation.

Background

• The SMC will drive cooperation in a wide range of areas of opportunity and future growth, such as aerospace, advanced technologies, supply chains and critical minerals, infrastructure, transport services, and chemicals.
• The UK is in active discussions to conclude MoUs with further states, including California, Colorado, and Illinois.
• The US is the UK’s largest trading partner and the biggest investor in the UK. To increase trade with the US, the UK has a “twin-track” approach, working with individual states to boost trade, including through trade and economic arrangements, while also engaging with the federal government to unlock opportunities at a national level.
• On 8 June the Prime Minister and President Biden announced the Atlantic Declaration – a first-of-its-kind action plan covering our economic, technological, commercial and trade relations. As part of that we agreed to explore ways to grow trade between the UK and the US, already worth £315 billion, and to launch talks on a Critical Minerals Agreement, supporting a strategically important sector of the UK economy.