Rishi Sunak unveils new post-Brexit economic deal with the US but denies it is a failure

Rishi Sunak proclaimed a new post-Brexit approach to world affairs as he unveiled what he said was a one-of-a-kind economic partnership with the US.

But there was still no sign of the free trade deal with America that former Tory prime ministers have sought and which No 10 admits is currently off the table.

Asked if the new agreement represented failure, Mr Sunak insisted it would bring the “most benefit to our citizens as quickly as possible”.

At a joint press conference with President Biden to mark the end of his trip to Washington, Mr Sunak also suggested that Brexit would allow the UK to respond differently to the threat posed by Artificial Intelligence (AI).

Acknowledging the problems the UK’s departure from the European Union has caused on the world stage, he said: “I know some people have wondered what kind of partner Britain would be after we left the EU. I’d say: judge us by our actions. We’re as committed to our values as ever, as reliable an ally as ever, as attractive an investment destination as ever.’’

But he said the UK was also “changing”, “strengthening” relationships with old friends like America and with new friends in the Indo-Pacific too.

“And we now have the freedom to regulate the new technologies that will shape our economic future – like AI –more quickly and flexibly. That is the future we are creating in Britain – confident, proud, and free.’’

In a win for the prime minister, Mr Biden also said the US was looking to the UK to lead on AI.

The press conference itself was delayed because discussions between the two leaders started late and continued longer than planned.

The Atlantic Declaration is designed to bolster economic security in response to the growing influence of China.

It includes commitments to ease trade barriers, closer defence industry ties and a data protection deal.

But hopes of a full-blown free trade deal have been abandoned by Downing Street.

The deal mitigates some of the issues created for the UK economy by Mr Biden’s multi-billion dollar green energy deal known as the Inflation Reduction Act (IRA).

The act provides a $3,750 (£2,986) incentive for each electric vehicle, as long as the critical minerals used in its production – principally in the battery – are sourced from the US or a country with whom the US has a critical minerals agreement.

The new deal includes proposals for a critical minerals agreement with the UK.

This could help companies all over Britain, including firms carrying out nickel production in Wales and lithium processing in Teesside.

Under the agreement, efforts will also be increased to shut Russia out of the global nuclear market.

There will also be a push for mutual recognition of qualifications for engineers, although this could require state-by-state approval in the US.

A deal on data protection will ease burdens for small firms doing transatlantic trade, potentially saving £92million.

There will also be collaboration on key industries including AI, 5G and 6G telecoms, quantum computing, semiconductors and engineering biology.

Meeting Mr Sunak in the Oval Office, Mr Biden – who inadvertently referred to the Prime Minister as “Mr President’’ – said the special relationship was in “real good shape’’. He later praised the defence secretary Ben Wallace as “very qualified’’ for the post of NATO Secretary General, though he added “maybe’’ when asked if he should get the job.

Before their meeting, Mr Sunak announced that the UK will host the first global summit on AI safety this autumn.

The meeting will consider the need for international co-ordinated action to mitigate the risks of the emerging technology.