A just-launched nonstop route between Phoenix Sky Harbor and London Heathrow is bolstering Arizona’s reputation as a big-league state.
I was fortunate to have been on the inaugural American Airlines flight on a gleaming Boeing 777 that carried our all-star delegation featuring business and tourism leaders and city officials. We had a jam-packed itinerary of meetings with our counterparts from across the pond who are as excited as we are about the new connectivity between Arizona, the U.K. and the rest of Europe. Connectivity is king in the world of international economic development. International flights to and from Phoenix generate about $3 billion per year, so opening this new route is a big win.
We met with several members of Parliament, key trade officials at the U.S. embassy and business advocates like the British-American Business Council. Britain has taken notice of the best-in-class business environment Gov. Doug Ducey and policymakers have cultivated in Arizona. We discussed everything from Arizona’s growing wine industry, to sports tourism, to our FinTech Sandbox, which has a reciprocity clause with a U.K. sandbox.
The new nonstop service creates even more possibilities for cooperation.
Here are some takeaways from the trip:
Red carpet treatment
The quick but incredibly substantive trip was made possible by the great team at American Airlines and the City of Phoenix.Phoenix is lucky to have American Airlines with such a large presence here and at a great airport hub at Sky Harbor Airport. American’s Joe Hughes is a longtime board member of the Arizona Chamber and we benefit greatly from his insight into tourism and the airline industry. Joe and his team saw to it that our home base in London, the Mayfair Hotel, rolled out the red carpet for our group.
Brexit affecting everything
As you might expect, the topic of Brexit was brought up in every meeting. Whether we were talking trade, tourism, or foreign investment, Britain’s withdrawal from the European Union has injected a level of uncertainty into the nation’s business environment that has left the country frustrated, exhausted and mystified.
The British people, regardless of whether they voted leave or remain, now just want a plan for how the withdrawal will proceed and what its implications will be for travel, imports and exports, and everyday life.
Manufacturers are attempting to prepare for the exit from the E.U. with little information. Some companies are building up big inventories of key elements of their manufacturing process since, after all, free trade between the U.K and the rest of Europe could be dismantled. The Wall Street Journal said British companies are “hoarding at rates rarely seen outside of wartime.”
Research-heavy industries like pharmaceuticals are dramatically slowing investments in the U.K. or stopping them altogether. Uncertainty over supply chain disruptions and the loss of joint U.K-E.U. research collaborations has made the industry a risky bet. Meanwhile, patients who depend on lifesaving medicine typically imported from the continent are fearing the worst.
The Beatles of Trade
A refrain we heard more than once from British trade watchers was the desire to pursue trade policy that reduces friction in the import/export process. That means tearing down tariffs and non-tariff barriers to free trade. A driving concern over Brexit, of course, is that trade becomes less efficient, slower, and more expensive, creating a drag on the entire British economy.
Meanwhile, back here in the colonies, the U.S. Congress and our friends in Canada and Mexico have to ratify the United States-Mexico-Canada Agreement, or USMCA, the modernized successor to NAFTA.
Although its formation was—and is—nerve-wracking at times, the USMCA does provide some needed updates to the aging NAFTA in critical areas ranging from e-commerce, to intellectual property, to agricultural access. It presents a stark contrast on how and how not to reopen a multilateral trade deal that has defined a country’s position in international commerce for decades.
Conversations are underway in very early stages to establish a U.S.-U.K. free trade agreement. It makes perfect sense and would be the economic underpinning of our nations’ special relationship. (Some think tanks in both the U.S. and U.K., in fact, have even sketched out what an ideal agreement would look like, including the free movement of labor between both countries.)
I’ll go a step farther. While there’s been some talk of a free trade deal uniting the Commonwealth countries, why not invite the U.K. into the USMCA? I’m serious. We’d be the Trans-Atlantic Fab Four. The Beatles of Trade!
The U.K. is looking for trade partners that are committed to increased market access and who share a common set of values that aren’t going to be undermined by a Brussels-based bureaucracy.
I proposed the idea to a few former members of Parliament on the trip. A few more visits to London and I think I’ll persuade them that USMCA offers the type of agreement they’re looking for.
New opportunities by air, new opportunities by sea
The U.K. is Arizona’s number two source of foreign investment.From top retailers to major hotel chains, there are numerous examples of the British influence in the state’s business community. This new flight allows these ties, which are responsible for nearly 17,000 jobs, to grow even stronger.
The U.S. is a regular destination for British travelers, including elected officials. But their destinations tend to be limited to Washington, D.C. and just a few states. I am excited for the opportunity to showcase our state to more Brits, including members of Parliament. Don’t you think Arizona would be a great location to hold a round of talks on a U.S-U.K. free trade deal?
And Arizona’s geographic location makes our state a perfect jumping-off point for a two-nation vacation. Travelers from around the world can fly nonstop into Phoenix, enjoy all that Arizona has to offer, and then head south into Mexico. And soon a trip to Mexico can include a cruise on the Sea of Cortez on a cruise line operated by British-owned Cruise & Maritime Voyages. The company envisions Phoenix as a hub where cruisers can start their trips and then be transported south to Rocky Point to enjoy Sonora.
As we all know, when people visit Arizona, they like what they see, the British included. The number of Maricopa County residents born in the U.K grew by 20% from 2010-2017, bringing the total number to nearly 12,000.
Arizona’s best in class tourism team
Credit to the Arizona Office of Tourism and Director Debbie Johnson, who have made sure travelers through Heathrow know all about the new flight. The airport, Europe’s busiest, has lots of Arizona marketing material throughout, and the American Airlines Admirals Club there even was serving up Arizona-themed drinks.
AOT and its colleagues at Visit Phoenix, led by Steve Moore, and the Arizona Lodging and Tourism Association, led by Kim Sabow, are the nation’s best tourism promoters. Our state is well served. Their work combined with American’s great service is sure to make the new PHX-LHR route a success.
For a video feature on the launch of the new service, check out this video.
Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry