Finance

UK and US mull new economic models ahead of possible trade deal

The UK and US governments will form a research group to look at whether new economic models are possible, as the pair talk up the prospects for a free trade agreement.

At a meeting in Cornwall on 10 June, Prime Minister Boris Johnson and US President Joe Biden signed a new Atlantic Charter, as the pair sought greater cooperation on everything from democracy and human rights to defence, security, and economic ties.

In a joint statement, the leaders acknowledged that “current economic models do not serve all equally in society or adequately tackle issues such as the climate crisis,” and that they were “mindful” of how economic policy was impacting the distribution of wealth across societies.

Recognising the need to ensure equality of opportunity, the statement said the countries planned to set up a new group of experts, practitioners and officials “to advance a new ‘common sense’ about how the economy works and the goals it should promote.”

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The charter included a pledge to crack down on what the document called “illicit finance”.

A Downing Street spokesperson added that Johnson and Biden had agreed to take further steps towards a future UK-US free trade agreement to create new jobs in both countries.

The countries have committed to “deepening and strengthening our vital economic and trading partnership”, according to the leaders’ statement.

“Both countries recognise that trade, when done right, can support our mutual interest in sustainable and green growth, good jobs for our workers, new opportunities for our innovators and businesses, and high labour and environmental standards,” it added. “We will therefore work closely to identify and pursue opportunities to deepen our already extensive trade relationship.”

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The statement also said both countries will back a global 15% minimum tax rate, with a view to simultaneously axe digital services taxes to provide “appropriate coordination” between the rules.

The UK and US leaders said they still hoped to reach a stage where the largest and most profitable global companies can be taxed on at least 20% of profit exceeding a 10% margin.

To contact the author of this story with feedback or news, email Justin Cash

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