UK signs Indiana Pact as Brexit tensions hinder broader US deal

The UK signed its first trade agreement with a US state, amid warnings that Prime Minister Boris Johnson’s stance on Brexit is hindering progress on a broader deal with Joe Biden’s administration.

The British government said Friday its agreement with Indiana will help remove barriers to trade and investment, improve procurement processes and pave the way for professional qualifications to be recognized in both countries. The UK expects to secure about six trade deals with US states by the end of the year, Trade Secretary Anne-Marie Trevelyan told Bloomberg last week.

The approach is far from the one Johnson promised as he campaigned for the UK to leave the European Union, when he called a US-UK free trade agreement one of the major prizes of Brexit. Talks have been largely frozen since Biden took office, with Johnson’s threat to effectively rip up parts of the divorce deal with the EU—which he negotiated and signed—a major sticking point.

Days after Trevelyan expressed hopes for progress, US House Speaker Nancy Pelosi warned that if the UK follows through with its plan, Congress will not support a bilateral trade agreement.

Johnson’s government has said it will legislate to unilaterally override parts of the Brexit deal relating to Northern Ireland, which it says is harming trade and the region’s fragile politics. For his part, Biden, who is of Irish descent, has warned that tensions must not jeopardize peace in the region.

A US political delegation has been meeting senior government ministers this week, as well as officials in Ireland and Brussels, to express concerns about the UK’s plan.

In absence of talks on a US-UK trade deal, Johnson’s government is turning its attempts to liberalize trade on a state level. It’s been in talks with states including California, Georgia, Tennessee, Oklahoma and South Carolina. 

The deal with Indiana “is a major milestone for UK-US trade relations,” British trade minister Penny Mordaunt said in an emailed statement.