Sunak to raise trade issues in US talks with Biden

June 07, 2023
British Premier Rishi Sunak speaking to reporters on the plane to Washington DC. — courtesy Rishi Sunak
British Premier Rishi Sunak speaking to reporters on the plane to Washington DC. — courtesy Rishi Sunak

WASHINGTON — British Prime Minister Rishi Sunak has said he expects to discuss Joe Biden's flagship package of investment in green industries when he meets the president during his trip to the United States.

On the plane to Washington DC, Sunak said "subsidy races" were not a solution to hitting climate goals.Some British ministers have criticized Biden's Inflation Reduction Act (IRA) as harmful to world trade.

The law includes $370 billion (£297 billion) to boost green technology in the US.

In a drive to cut carbon emissions, billions in tax credits and subsidies has been allocated to speed up the production of solar panels and wind turbines, and encourage the up-take of electric cars.

The European Union has described the law as anti-competitive, while earlier this year, Energy Secretary Grant Shapps said the package was "dangerous because it could slip into protectionism".

It is expected to be one subject of discussion when Sunak meets Biden for the fourth time this year, for talks at the White House on Thursday, following meetings with business leaders and senior politicians.

The prime minister's spokesman suggested Sunak would also talk about boosting green tech, the war in Ukraine, and the regulation of artificial intelligence.

Downing Street said the prime minister would seek to boost economic security, bringing it into line with the level of UK-US co-operation on defense.

Tensions over the global implications of Biden's economic package have been building ahead of the visit, Sunak's first official trip to Washington DC as prime minister.

The UK government has said it had no plans to emulate the scale of the US plans, prompting accusations from Labour that the UK could fall behind in a global race to attract future industries.

During his flight to Washington, reporters asked Sunak if there was anything Biden could do to ease the economic impacts of his package on the UK.

"It's something that he [President Biden] and I have discussed in the past and you'd expect us to continue discussing it," Sunak said.

When asked whether Sunak accepted President Biden's argument that a resilient economy sometimes required a protectionist approach to key sectors, the prime minister referenced a joint statement issued by the G7 at the end of its latest summit in Japan.

The statement, he said, "makes it very clear that G7 countries don't believe in protectionism as the answer to this challenge and also don't believe in in subsidy races that are zero sum".

There have been reports his trip could see the two sides unveil a critical minerals pact that would allow British carmakers that export electric vehicles to the US to benefit from some of the tax credits offered to American firms.

The US signed such a deal with Japan earlier this year, and has entered into talks with the EU.

However, one area where progress has stalled is over a wider UK-US free trade deal, where President Biden has put talks on ice, leaving the UK to deepen trade ties through less comprehensive mini-deals with around 20 states.

Another area where Sunak hopes to hold discussions is the regulation of artificial intelligence (AI), where Sunak is seeking to carve out a role for the UK as a global player.

The prime minister is hosting a global summit on AI regulation in the autumn, and has reportedly expressed an interest in the UK hosting any new international regulator for the emerging technology.

However, the extent to which the UK will be able to shape new global rules outside the EU is unclear, with the UK now shut out of key gatherings between European and American regulators such as the Tech and Trade Council (TTC).

The two leaders will also discuss the war in Ukraine, which is expected to enter a decisive period soon, with signs a long-awaited counter-offensive from Ukrainian forces may have begun.

It comes after Ukraine blamed Russia for the collapse of the Kakhovka dam in Russian-held Ukraine, prompting the evacuation of thousands of people. Moscow has denied destroying the dam, instead blaming Ukrainian shelling.

Sunak flew in to Washington late Tuesday lobbying for Britain to take a lead role in regulating artificial intelligence, after a dire warning of the technology's existential dangers.

But while the United States and Britain are inching closer on giving Ukraine air support, and on a robust approach to China, Sunak faces a harder sell with Biden about the UK's post-Brexit relevance elsewhere.

En route to Washington, the prime minister announced cumulative US investment of more than £14 billion ($17 billion) into Britain -- although some of that has already been deployed.

Underlining the US-UK military alliance at the heart of NATO, Sunak said their economic relationship should also be deployed to defend Western democracy.

On the NATO front, Sunak has been talking up Defense Secretary Ben Wallace as the Western alliance seeks a new secretary-general at a summit in Lithuania next month.

"I have absolutely zero doubt that the war in Ukraine will be a prime issue of discussion" in Thursday's summit, US National Security Council spokesman John Kirby said.

"And the Brits have been right there — literally at the fore in terms of helping Ukraine," he added.

On Wednesday, Sunak will lay a wreath at Arlington National Cemetery outside Washington before heading to Capitol Hill for talks with leaders in Congress.

He will then watch the Washington Nationals play the Arizona Diamondbacks for the second annual "UK-US Friendship Day", marking 238 years of diplomatic relations.

On Monday, President Biden met with Prime Minister Frederiksen of Denmark at the White House to underscore the deep and enduring ties between the governments and people of the United States and Denmark.

The leaders discussed unwavering support for Ukraine as it defends itself against Russia’s brutal war of aggression. President Biden welcomed Denmark’s provision of significant security assistance to Ukraine and its leadership in training Ukrainian pilots.

They discussed their efforts as NATO Allies and close partners to strengthen transatlantic security, which will be further enhanced by the conclusion of a bilateral Defense Cooperation Agreement.

They also talked about their shared work to bolster economic prosperity, increase energy security, and address the impacts of climate change. — Agencies

June 07, 2023
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