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I’ll be there for MoU?

The UK and the United States have always been friends - how will these state-level agreements help?

In May 2022, the UK signed its first state-level Memorandum of Understanding (MoU) with the US state of Indiana, followed by agreements with North Carolina, South Carolina, Oklahoma and Utah. The UK began negotiating these agreements once the prospects of a UK-US free trade agreement (FTA) receded in 2021. In this article we explore what the MoUs contain and how significant they could be for business.

Trade with the United States

In our 2023 Attitudes to Trade Survey, a potential trade agreement with the United States received the greatest favourability among respondents, scoring around 10% ahead of other potential FTA partner countries. The relationship with the US under Joe Biden has been improving since the agreement of the Windsor Framework back in February and culminated in the signing of the Atlantic Declaration at the beginning of June.

The declaration commits both governments to cooperation in several key areas, including on critical technologies such as semiconductors, telecoms, synthetic biology, quantum technologies and AI - with an AI safety summit to be held in the UK later this year. It also included a range of other measures: on economic security tools, investment screening, data flows, nuclear, defence and critical minerals.

The UK-US trade corridor is strong, with over £279 billion of goods and services traded bilaterally last year. The UK exported £168.3 billion to the US whilst importing £110.8 billion, making for a trade surplus of just under £50 billion. The US market continues to be a promising export destination for British businesses, despite the range of barriers to trade currently in existence. Tariffs, customs and regulatory requirements commonly affect traded goods, while US states generally control which services can be supplied – creating a mixed landscape of market access across the country. Given these conditions, the UK government has sought to build support for deepening the bilateral relationship through the development of a state-level trade program.

What’s in the MoUs?

The MoUs are not trade agreements and as such do not offer traditional trade liberalisations such as tariff reductions. Instead, the MoUs operate in the boundaries of what is possible between the UK and state legislatures, mainly focusing on alignment of policy, cooperation in priority industrial sectors and facilitating dialogue between businesses, regulators and institutions. For instance, provisions in the agreements include:

  • Aspirations to use policy and consultations to identify and remove trade barriers.
  • Commitments to promoting trade between the parties, using trade missions, roundtables and targeted events, business delegations and information sharing.
  • Cooperation on government procurement, including aspirations for equal treatment, alongside support for regulators that may wish to mutually recognise qualifications.
  • Co-operation between academic institutions.
  • Aspirations to work more closely together to further trade in priority sectors including life sciences, automotive and the clean energy transition.
  • The establishment of working groups to discuss matters relevant to the MoUs.

Notably, these provisions are principally based around the good intentions of the parties and depend on the co-operation of the institutions within them. Take for example the wording of the Indiana MoU: “identify, and where they exist, seek to explore solutions to barriers to free and open trade, leveraging policy and consultation mechanisms available”[1]. These are not legally binding commitments - relying on goodwill to translate aspiration into tangible outcomes.

Not all of the agreements are equal, the MoU with Indiana generally being more comprehensive than the others agreed so far, identifying greater areas of co-operation and offering more detail about what joint working in each area should entail. For example, it includes clear provisions on government procurement:

  • “Indiana will actively work towards offering the United Kingdom’s suppliers treatment no less favourable than that afforded to suppliers from a state not bordering Indiana, including state level preferences”[2].
  • “Indiana and the United Kingdom decide to maintain an open dialogue regarding current and future trade related initiatives and developments”[3].
  • “The Participants will prioritise and advance opportunities in their government procurement processes within the Working Group framework”[4].

These provisions appear to be more comprehensive in comparison to the terms of the MoU with North Carolina, for example:


  • “[the parties will begin] Prioritising and advancing opportunities in their government procurement processes”[5].


However, while the detail may vary, the broad themes of what is on offer are consistent throughout the MoUs concluded so far.

How are they working?

The MoUs are already starting to prove useful for UK industry, such as the motorsports sector, which has extensive links to North Carolina (the home of Nascar) and Indiana (home of the Indy 500). The UK Motorsports Industry Association visited North Carolina in late May 2023 to meet with leading US companies to discuss opportunities to boost market access for UK firms into the US market[6].

On the UK side, the Department for Business and Trade has hosted a delegation from North Carolina, who met with UK companies in Liverpool, Wrexham, and Manchester. The delegation focused on exchanging expertise on workforce development and clean energy, before their visit culminated in the second Working Group meeting for the North Carolina MoU on 22 June 2023.

The MoUs may also be useful to help UK firms access large government procurement opportunities. For example, the MoU with North Carolina singles out electric cars as an area of close co-operation, which over time could help UK companies to tap into the almost $109 million of funding that North Carolina expects to receive from the National Electric Vehicle Infrastructure, or NEVI​ program[7]. Government procurement is potentially one of the most lucrative areas of the MoUs, with 450,000 US tenders issued annually, in a market worth hundreds of billions of dollars[8].

Is there a wider purpose?

The UK government considers the MoU programme a starting point for deeper trade cooperation rather than an end in itself. On a long-term horizon, the agreements could potentially help to build a positive environment which could pave the way for restarting negotiations on a federal-level free trade agreement at some point in the future.

At the time of writing, the programme is also still in its infancy, with a small number of MoUs concluded with some of the smaller US states. But these agreements are already acting as a vehicle to showcase British goods and services to US consumers. Further agreements could well prove more economically valuable, particularly with larger states such as California and Texas, where the UK government is already engaging state officials.

To enhance the direct applicability of the MoUs to current trading patterns, the government could consider deepening and broadening their scope, for instance to include or initiate a process whereby professional qualifications can be mutually recognised in specific areas, such as legal services. The recent success that has been achieved with mutual recognition of architects’ qualifications gives cause for optimism that more can be accomplished in this area[9].

What can businesses do now?

Given that the MoUs establish a platform for deeper cooperation, there is a role for business to help to drive their effectiveness. Traders should be identifying trade barriers in their commercial operations and reporting them on the government’s “Report a Trade Barrier” tool in the first instance.

In the near term, if you are trading with Indiana, North Carolina, South Carolina, Oklahoma or Utah your business may soon benefit from additional processes to raise and resolve trade issues. Businesses in priority sectors could also stand to benefit from direct trade initiatives emanating from the UK government or state governments, such as trade missions and dedicated events. If your business operates in one of these priority sectors or trades with the US more broadly, you may wish to consider how your organisation is tracking developments like the MoU programme and whether you are engaging with emerging policy at the earliest opportunity.

Contacting the government’s regional trade teams can be a helpful first step, and for a deeper understanding of the UK-US trade corridor, Deloitte’s specialists are on hand.


[1] Department for Business and Trade, Memorandum of Understanding on economic cooperation and trade relations between Indiana and the United Kingdom. 27 May 2022.

[2] Ibid

[3] Ibid

[4] Ibid

[5] Department for Business and Trade, Memorandum of understanding (MOU) on cooperation and trade relations between the US state of North Carolina and the United Kingdom. 20 July 2022.

[6] Motorsport Industry Association, “Accelerating high-performance engineering exports to the USA”, 16 May 2023.

[7] North Carolina Department of Transportation, “National Electric Vehicle Infrastructure (NEVI) Program”, 26 May 2023.

[8] National Association of State Procurement Officials, “NASPO Supplier Toolbox”, May 2023.

[9] Architects Registration Board, “Landmark UK-USA agreement to open up the architects’ profession”, 16 February 2023. 

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