UK and Texas Forge Major Trade Agreement to Enhance Innovation, Energy Security and Economic Growth

In a landmark move last month, the United Kingdom has inked its most substantial state-level trade agreement yet with Texas, setting the stage for enhanced economic collaboration, particularly in renewable energy, technology, bioscience and professional services such as architecture. This strategic pact aims to strengthen trade and investment ties between Britain and the Lone Star State, leveraging their respective strengths in technology, energy, services and manufacturing.

The deal was announced by UK trade officials and Texas Governor Greg Abbott on March 13, marking a significant step in bilateral relations between the two economies. Under the agreement, both regions will focus on promoting investments in green energy projects and technologies, with a particular emphasis on advancing renewable energy sources. This aligns with the UK's broader environmental goals and its commitment to achieving net-zero emissions by 2050.

Texas, known for its robust energy and technology sectors, offers a fertile ground for the development of sustainable technologies. The state is already a leader in wind energy production in the United States and has been rapidly expanding its solar energy capacity. The agreement includes provisions to facilitate the transfer of technology and expertise in renewable energy and reciprocity in professional services, aiming to create jobs and spur economic growth in both regions.

"As second-generation Oil and Gas from Aberdeen, I knew I would eventually end up in Houston. The energy relationship between Houston, TX and Aberdeen, Scotland goes back to the early 70’s when expertise from Texas helped Scotland open up The North Sea. Scottish companies further developed those products, technologies and services in extremely harsh environments which has allowed them to cross-pollinate that expertise back into Texas. Today, we see similar cross-pollination in offshore (and onshore) wind (and across other renewables) whereby, you have established capabilities and expertise in the UK and Europe which are needed in Texas and the rest of the US. With desire, drive, and great potential, we continue to see this cross-pollination in the energy sector through requests going back and forth between the two regions to build infrastructure, services, and OEMs, presenting nearshoring opportunities to address or eliminate supply chain bottlenecks."-Justin Hoffman, Founder and CEO of cSolutions.

Additionally, the pact opens up new avenues for companies to expand their reach into new markets. Texas companies expanding into the UK benefit from having greater access to markets in Europe and regions with post-colonial ties with the UK; and UK companies expanding into Texas benefit from Texas' expansive infrastructure and economic ties with North America and Latin America. One recent example is Lone Star Analysis, a prominent analytics and AI firm based in North Texas, who recently established a new headquarters in Lincoln, England to further expand services into new sectors and regions and continue to innovate technology through strategic partners. Such a move is indicative of the growing business synergies fostered by the positive business relationship between the two regions.

Economists predict that this UK-Texas partnership will not only boost direct trade between the two regions but also encourage a flow of investments. According to historical data from the Texas Comptroller's office from the last decade, more than one fifth of FDI in Texas came from the UK, fueling an estimated 119,900 jobs in Texas based on 2019 estimates. Notwithstanding, this strategic trade agreement will likely continue to attract bidirectional foreign direct investment, creating new high-value jobs for both regions.

Finding startup capital for a burgeoning company in water quality instrumentation like Eureka Water Probes, especially outside the favored realms of high-tech, such as software and semiconductors, was challenging. We were fortunate to secure capital through a partnership with a UK company based on our common interest-they were in the market to sell instrumentation and we were poised to manufacture it. This collaboration was pivotal, not only infusing the essential capital we needed to realize our vision but also paving our entry into global markets through the UK's historical ties with nations like India. Moreover, conducting business in the UK is akin to our experiences in the US due to common language and culture. With the advantage of only being a 10-hour flight away, our partnership with our UK partner smoothed the path for our business expansion.
-Stuart Garner, Managing Partner, Eureka Water Probes, Austin, TX

The trade agreement also comes at a crucial time as both the UK and Texas aim to diversify their economies in the face of global economic challenges and shifting industry demands. The collaboration on energy security, biosciences and professional services is seen as a pathway to more resilient, sustainable and diverse economic structures.

Governor Abbott hailed the agreement as a transformative opportunity for Texas, promising that it will bring long-term economic benefits and reinforce Texas's position in global trade networks. On the other side of the Atlantic, UK officials expressed optimism for such state-level agreements as Texas is the 8th state, howbeit, the largest trading partner of of the 50 states, to have signed such an agreement with the UK.

The deal not only underscores the strategic economic interests shared by the UK and Texas but also highlights the importance of international cooperation in tackling global challenges like energy security, supply chain infrastructure and sustainable development. Both parties look forward to a fruitful partnership that delivers on the promise of economic cooperation in innovation, security, sustainability and economic prosperity.