Time for a new chapter in the City’s special relationship with America
Over the years, we in the UK have often stressed the “special” nature of our relationship with the US.
While this is usually considered in the context of foreign policy, with regards to bilateral financial service trade, it has certainly developed into something truly special — and something we should be grateful for as Thanksgiving approaches this week.
The scale is astonishing and worth reflecting upon. Financial services trade is worth a huge £22bn between us, with UK financial services exports to the US counting as the biggest single contributing factor to Britain’s trade surplus in services overall.
The US is both the leading financial services trading partner and biggest source of investment in the sector for all regions of the UK. In London, more than £2.7bn of fintech venture capital investment so far this year has originated in the US.
There is no doubt that, as we look ahead to working with a new administration in the US, we should continue to celebrate the success story of UK-US financial services trade. This has been a major driver of prosperity and jobs not just within our two countries, but also a vital motor for the global economy at large.
But our relationship won’t stay “special” all by itself. That’s why my virtual visit to Washington DC next week will be so important, as we look to better understand how the Square Mile can work with a Joe Biden presidency towards common objectives, particularly around digital trade and fighting climate change — key opportunities for post-pandemic growth as we work on building a resilient and environmentally responsible global economy.
It is by working together in these areas that the UK and US can be pioneers in terms of developing the global financial services industry of tomorrow. The British American Finance Alliance — which I co-chair — recently published a paper setting out a united vision for future UK-US regulatory cooperation and dialogue.
We should look to lead the way in regulatory innovation for cross-border data flows, developing new standards and benchmarks for sustainable finance, and building a coalition of like-minded partners to further establish the global multilateral trading framework. Achieving such objectives will be essential if we are to both cement our place as fintech capitals of the world and to make meaningful progress at COP26 next year.
As we consider our post-Brexit trading future, the scope of our success means that the UK and US have a unique opportunity to set a new standard in terms of what is possible in a bilateral trading agreement.
But we must not put the cart in front of the horse.
Instead we must keep sight of our top priorities if we are to realise our vision of a smarter and greener global economy. That’s why any free trade agreement between our two countries must have financial services at its heart, and should be seen as just one of the ways in which we can deepen our ties within the industry.
The special relationship is only as special as it is at any given moment. We cannot rest on our laurels. As we turn to this exciting new chapter in our trading history, it is vital that we strengthen our ever-evolving relationship to meet the global challenges we face today.
Main image credit: Getty