Brexit and the US
On 6th March 2023, Chris Hayward, policy chair of the City of London Corporation, had an article published in “City AM” headed “We must strengthen our ties with the US, so London and New York can grow together”.
In the article, Mr Hayward wrote that “areas such as climate finance regulation, innovation in digital assets and operational resilience are all ripe for closer regulatory alignment. Critical to achieving it will be the Financial Regulatory Working Group, a group of high-level UK and US financial actors. Formed over five years to further co-operation after the Brexit referendum, the group focuses on issues integral to the City including financial stability, market efficiency and investor protections”.
On an arguably less positive side, there is increasing competition between the UK and the US in the listings market as UK–based or listed companies are increasingly attracted by the higher market values that such companies may attract through a listing in the US. This has affected businesses such as the UK-based technology business, Arm, owned by the Japanese company, Softbank, which has been reported to be seeking a US listing, but also other businesses too (such as WANdisco, CRH and Flutter Entertainment). The battle lines have been drawn!
The UK (together with the EU) is also reported to be considering how to address the competitive challenges posed by the US’s Inflation Reduction Act and the so-called “green subsidy” revolution set in motion by that Act.
Given these somewhat contradictory factors, it is perhaps worth delving into the statistics for the current UK-US trade and investment relationship. In that context, on 17th February 2023 the UK Department for International Trade (DIT) published one of its regular factsheets on trade and investment between the two countries, which showed that total trade in goods and services (exports plus imports) between the UK and the US was £262.7 billion, in current prices, in the four quarters to the end of Quarter 3 (Q3) 2022, an increase of 21.9% or £47.1 billion from the four quarters to the end of Q3 2021. Of this £262.7 billion:
- Total UK exports to the US amounted to £161.5 billion, in current prices, in the four quarters to the end of Q3 2022 (an increase of 20.6% or £27.6 billion compared to the four quarters to the end of Q3 2021); and
- Total UK imports from the US amounted to £101.2 billion, in current prices, in the four quarters to the end of Q3 2022 (an increase of 23.9% or £19.5 billion compared to the four quarters to the end of Q3 2021).
According to the DIT factsheet, the US was the UK’s largest trading partner in the four quarters to the end of Q3 2022 accounting for 16.0% of total UK trade.
The factsheet also showed that, in 2021, the outward stock of foreign direct investment (FDI) from the UK in the US was £461.4 billion accounting for 26.1% of the total UK outward FDI stock and that, in the same year, the inward stock of FDI in the UK from the US was £675.7 billion accounting for 33.7% of the total UK inward FDI stock.
The UK-US trade and investment relationship appears to be in good health and interested stakeholders will no doubt focus on how it can be developed further (whilst also addressing the competitive challenges inherent more generally in the UK-US relationship).
Brexit and the UK’s Data Protection and Digital Information (No 2) Bill 2022-23
On 8th March 2023, the UK’s Secretary of State for Science, Innovation and Technology, Michelle Donelan MP, introduced into Parliament for consideration the updated Data Protection and Digital Information (No 2) Bill 2022-23 (“the Bill”), one of the avowed purposes of which (according to the UK Government’s accompanying press release) is to “introduce a simple, clear and business friendly framework that will not be difficult or costly to implement – taking the best elements of GDPR (the EU’s General Data Protection Regulation) and providing businesses with more flexibility about how they comply with the new data laws”.
Other objectives of the Bill (as stated in the press release) are to :
- Ensure our new regime maintains data adequacy with the EU, and wider international confidence in the UK’s comprehensive data protection standards
- Further reduce the amount of paperwork organisations need to complete to demonstrate compliance
- Support even more international trade without creating extra costs for businesses if they’re already compliant with current data regulation
- Provide organisations with greater confidence about when they can process personal data without consent and
- Increase public and business confidence in AI [Artificial Intelligence] technologies by clarifying the circumstances when robust safeguards apply to automated decision-making
The Bill runs to more than 200 pages and seeks to tread a fine line between liberating UK businesses from some of the more bureaucratic requirements of the EU’s GDPR and yet still seeking to remain in alignment with the GDPR’s objectives, at least to the extent necessary to preserve the UK’s “data adequacy” status for the purposes of maintaining the free flow of personal data between the UK and the EU.
As the Bill’s headnote makes clear, the Bill covers a variety of different topics and will probably be closely scrutinised as it makes its way through the UK Parliament. The headnote states that the Bill is “A Bill to make provision for the regulation of the processing of information relating to identified or identifiable living individuals; to make provision about services consisting of the use of information to ascertain and verify facts about individuals; to make provision about access to customer data and business data; to make provision about privacy and electronic communications; to make provision about services for the provision of electronic signatures, electronic seals and other trust services; to make provision about the disclosure of information to improve public service delivery; to make provision for the implementation of agreements on sharing information for law enforcement purposes; to make provision about the keeping and maintenance of registers of births and deaths; to make provision about information standards for health and social care; to establish the Information Commission; to make provision about oversight of biometric data; and for connected purposes”.
There is quite a lot there as the UK navigates its own independent path on data protection (where it can) in the post-Brexit era.
Brexit and the UK’s Trade Remedies Authority (TRA)
On 9th March 2023, the UK Government announced that it will introduce new legislative measures to improve the way that it protects UK businesses from unfair international competition and unforeseen surges in imports.
The announcement confirmed that the UK Government sees the independent TRA as a key part of the new post-Brexit framework to defend UK industry and that it was set up with the power to investigate unfair trading practices and provide objective, independent, expert advice to Ministers.
According to the announcement, the legislative measures to be introduced will “maintain the TRA’s expert independent analytical and investigative role, while also giving Ministers greater power to look at wider public interest considerations and flexibility to make decisions that balance the interests of UK producers, importers and consumers”.
In an accompanying news story published by the TRA itself, the TRA said that the new measures include:
- TRA taking on responsibility for investigating bilateral safeguard cases as part of free trade agreements
- Ministerial powers to request the TRA provides alternative options to its main recommendations, as required
- Ministerial powers to override the TRA’s Economic Interest Test on public interest grounds
- Powers for the Government to ask the TRA to re-evaluate a recommendation
- Powers for the Government to take a different decision to that recommended by the TRA
The new measures will reportedly require both primary and secondary legislation which is expected to be completed by the end of 2023.
An interesting development!
Brexit and the Windsor Framework
On 24th March 2023, the Joint Committee established by the UK-EU Withdrawal Agreement 2019 formally adopted the Windsor Framework and the consequential amendments to the Northern Ireland Protocol – the decision being signed off by UK Foreign Secretary, James Cleverly, on behalf of the UK Government and EU Vice-President, Mario Sefcovic, on behalf of the EU Commission.
On the same day, those two individuals represented the same parties at a meeting of the Partnership Council established by the UK-EU Trade and Cooperation Agreement 2020 (TCA) where reportedly (according to the accompanying UK Government press release which contained a joint statement by those individuals) they discussed implementation of the TCA and cooperation in a range of crucial areas including energy, trade and security and agreed on the next steps. These “next steps” were expressed to include hopefully “the signing of Memoranda of Understanding on financial services and on intellectual property soon” and taking forward discussions on UK “association” to EU programmes (including presumably the Horizon Europe research programme) “in the coming weeks”.
Photo credit: Luciano Mortula – LGM / Shutterstock.com
