Lord Digby talks about UK/ US relationship

On 3 December, Lord Digby Jones, Minister for Trade & Investment, flew to the United States to meet with some of the UK’s major trade & investment partners.

To coincide with the visit, he spoke about the special trading relationship between the UK and the US...

When people talk of the special relationship between the UK and US they think of politics and also appreciate the sharing of information which keeps our countries safe. Yet the ties go way beyond and since the time of Sir Walter Raleigh we have enjoyed a trans-Atlantic trading relationship of substance and power.

In a globalised economy, high growth markets are obviously important. But our relationship with the US underlines that established markets and mature relationships must not be ignored. We are trading superpowers of the developed world and our cross-border relationship dominates international politics and global economics.

UK is streets ahead for US direct investment
The statistics speak for themselves: the US is the major trading partner for UK companies and we are the leading foreign investor in the US market. The latest figures show UK direct investment in the US was worth approx $303.3 billion – more than the rest of the EU put together. UK exports of goods to the US for 2006 were £32.1 billion; while UK exports of services were £27.1 billion. Meanwhile, the UK is the leading destination for American companies. In 2006/07, they invested in a staggering 540 new projects in the UK, accounting for some 31,000 jobs. To put that into context, France came next with 95 projects. Indeed, everyday an astounding one million British workers go to work as a result of US investment. Just pause to think how many families depend on the US for their livelihoods.

So my visit is to say thank you for that investment, to celebrate our special business relationship and to stimulate even more two-way trade and investment. I'm heading to the East Coast to see key contacts including MetLife, a Fortune 100 company that recently invested significantly in the UK, creating close to 100 new jobs in London. In Philadelphia, I'll be visiting Day & Zimmermann, a managed services company, which has had its Euro HQ based in Stockport, Cheshire since 1999, and employs over 250 staff; and also Shire Pharmaceuticals, a British company that incorporated in the US in 2004. In New York I shall be meeting businesses from the financial services sector who have made London their second home, cementing its position as the world’s financial capital.

“Cracking America” is a common goal of pop bands and UK companies alike. The US is the most competitive business environment in the world and we are, rightly, proud that so many UK companies, offering unique and innovative products and services, are able to succeed there. UK Trade & Investment, the Government’s international business development organisation which I chair, can advise and assist companies seeking to grow their business in the States, offering detailed market research and the right introductions.

How the US sees us
Similarly, US companies like investing in the UK. They see us as innovators, with a spirit and creative energy that is unique to this nation. We are their springboard into Europe and the core platform of their global strategies. With our business friendly environment, skilled workforce, world-class academia and strong R&D base we’re an attractive destination. It’s no surprise that 30% of all US investment in Europe lands in the UK.

The globalised economy is uncertain and, as the recent credit crunch shows, our fortunes are bound together. Fortunately, the UK has entered this period of turbulence with a stable economy and a strong banking sector.  And while some anticipate a bumpy ride over the next few months, I am confident we will absorb these challenges - on both sides of the pond. But we cannot afford to be complacent and we will need to work jointly with G7 and EU partners to improve, where necessary, domestic and international regulation, on issues such as liquidity management, solvency and transparency.

At times like these, good friends and established partners count for a lot. Our two countries have indelibly shaped and supported each other throughout our history; and must continue to do so as this current, powerful wave of globalisation effects the lives of us all. As we face up to the new challenges of climate change and international security, we must continue to look to our business partnerships for solutions.

Combating climate change in partnership
Combating the effects of climate change and developing energy efficient technology is presenting new opportunities for business. With the introduction of the Climate Change Bill, the UK is aiming to be the first country to have a legally binding, long term framework to cut CO2 emissions and adapt to climate change. Businesses are looking at how they can innovate and exploit the opportunities stemming from the new legislation.

I reckon the next Bill Gates will be the deliverer of a high-technological solution to some of our climate change challenges. Wouldn’t it be great if he or she was a Brit, and, if not, was at least making the UK their location of choice from which to launch a business of such global significance. And once again, the UK and US are forging ahead with new partnerships. Clipper Windpower, an Iowa-based designer and manufacturer of wind turbines and developer of wind farms, chose to invest $60 million to establish a Centre of Excellence for Offshore Wind in Blyth, to develop the world's largest offshore wind turbine at 7.5 MW.

In today’s world, the safety and security of our citizens is at the top of all our minds and the need for our nations to work collaboratively, to share technology and expertise, has never been greater. The UK’s long history of dealing with terrorism has led to the development of a world-class high-technology base which caters specifically to the needs of the security sector, both domestically and internationally. In addition, our universities and research agencies are world-leaders in security-based R&D. Recently, Science Applications International Corporation, a US science and technology provider which works with the US military and Department for Homeland Security, signed an agreement with the University of Kent, on behalf of the UK Biometrics Institute, to collaborate on biometric and identity projects. The agreement is a great example of academia, business and Government trans-Atlantic collaboration on this increasingly important area.