Post-Brexit Trade and the USA
As the next US Presidential Election approaches on 5th November 2024, thoughts in the UK may be turning to the implications of that election for the UK-US trade and investment relationship.
The US remains very much the UK’s largest trade and investment partner, though there are also rivalries that have grown in that relationship ( such as the drift of listed companies from the UK seeking a listing in the US, though that has been criticised in some quarters where the company concerned has little genuine connection with the US).
It is worth examining some recent UK-US trade and investment statistics which have been published by the UK Department for Business & Trade (DBT), to put matters in context. According to the relevant DBT factsheet released on 18th July 2024, total trade in goods and services ( exports plus imports) between the UK and the US was £310.8 billion in the four quarters to the end of Q4 ( Quarter 4) 2023, an increase of 7.6% or £21.9 billion in current prices from the four quarters to the end of Q4 2022. Of this £310.8 billion:
- Total UK exports to the US amounted to £191.5 billion in the four quarters to the end of Q4 2023 ( an increase of 9.3% or £16.3 billion in current prices, compared to the four quarters to the end of Q4 2022); and
- Total UK imports from the US amounted to £119.4 billion in the four quarters to the end of Q4 2023 ( an increase of 4.9% or £5.6 billion in current prices, compared to the four quarters to the end of Q4 2022).
The DBT factsheet showed that the US was the UK’s largest trading partner in the four quarters to the end of Q4 2023 , accounting for a massive 17.6% 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 from the US was £675.7 billion accounting for 33.7% of the total UK inward FDI stock.
The importance of the UK- US trade and investment relationship is all the more apparent post-Brexit!
Brexit and Brexitism
Why is “Brexit” not an “-ism” like many other recognised political or politico-cultural or politico-religious belief systems such as “populism”, “nationalism, “communism” , “socialism”, “Conservatism” or “Liberalism” ? Probably because “Brexit” in itself is a political act or at the most the management of a political relationship rather than a set of beliefs, whereas “Brexitism” a much less commonly – used expression) is a belief – system that is intended to release the UK from close entanglement with supra- national organisations such as the EU.
According to an opinion article by columnist, Rafael Behr, in “The Guardian “ published as far back as 1st March 2023, “Brexitism” as a doctrine of national renaissance through conflict with the EU is dying , although “Brexit” in a sense is never done because there are always perceived things to do to maintain the UK’s freedom of action which Brexit was intended to bring.
All this confusion of words may mean that the effects of Brexit will be strictly limited and will not have the world – affecting consequences that an “-ism” would bring.
We shall see!
Brexit and the UK Companies House Business Plan 2024 to 2025 in relation to ECCTA
On 12th August 2024, the UK’s Companies House reportedly published its business plan which includes an outline of what it plans to deliver in relation to the Economic Crime and Corporate Transparency Act 2023 (ECCTA) from April 2024 to March 2025. In this context, the business plan includes the following provisions:-
- Information – Prioritising cleaning up existing information on registers by identifying and removing information known to be inaccurate;
- Addresses – Requiring companies to provide a registered email address and an appropriate registered office address;
- ACSPs – Introducing a registration process for third party agents to become authorised corporate service providers;
- IDV – Developing the significant changes to Companies House systems and service integrations necessary for identity verification;
- Corporate directors – Beginning to develop process changes to impose limits on the use of corporate directors, as set out under the UK’s Small Business Enterprise and Employment Act 2015;
- Personal information – Investigating where personal information has been used without consent; and
- Intelligence assessment – Developing a strategic intelligence assessment, alongside partners, to identify and assess strategic threats posed to the UK though misuse of corporate structures.
An ambitious programme in the post-Brexit era!
Brexit and the UK-EU Trade and Cooperation Agreement 2020 (TCA)
On 10th July 2024, the UK House of Commons Library reportedly published a research briefing on the review dates and transitional periods in the TCA.
These include the following provisions of the TCA:-
- Article 331, which provides that the energy title ceases to apply on 30th June 2026 unless decided otherwise by the Partnership Council;
- Article 411, which enables the UK or the EU, from 1st January 2025, to request a review of the operation of Part Two, Heading One ( Trade); and
- Article 776, which obliges the UK and the EU to undertake a general review ( though not a renegotiation) of the implementation of the TCA and supplementing agreements ( and any related matters) every five years.( The first review will start on 1st January 2026.)
A useful document!
