Rishi Sunak will push to boost trade relations with the US and other Pacific powers despite admitting that formal trade deals are still some way off.
The Prime Minister is meeting US President Joe Biden on Monday where he is set to raise the UK’s concerns about the Inflation Reduction Act (IRA), which offers billions of dollars of subsidies to firms which do business in America.
Speaking before the meeting in San Diego, Mr Sunak said: “We have raised concerns with the US about the IRA and we will work through with them as they think about how best to implement it, and those are conversations that the Government has been having with them for a while and will continue to have.”
Business and Trade Secretary Kemi Badenoch has denounced the legislation as “protectionist” because it effectively encourages companies investing in green technology to move their operations to the US from Britain, the EU and other countries.
The Prime Minister said: “It is welcome that the US is committed to combatting climate change and focussing on green industries. It’s something that we’ve been doing for a while actually, and we should feel very good about the leadership we have shown on this issue and in fact our track record, we have decarbonised faster than any other G7 country and grown our economy rapidly at the same time.”
He is not expected to press Mr Biden on a bilateral free-trade deal, which was discussed between Boris Johnson and Donald Trump but now appears to have dropped off the agenda.
And Mr Sunak also admitted it would take some time for the UK to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trade bloc including countries such as Japan, Canada and Australia, despite years of negotiations having already taken place.
He said: “We shouldn’t sacrifice quality for speed. I’ve always said that about all trade negotiations. But we’ve been having good and constructive conversations and it’s right that we continue to do so and I’m hopeful that we’ll be able to proceed, that’s been something that we’ve been keen to do.”
The Prime Minister has effectively abolished the Department for International Trade, combining it with responsibility for business regulation as he moves away from a focus on securing free-trade agreements with individual countries.