The UK has signed an agreement on closer trade co-operation with Texas as the Government continues to pursue state-level deals in the absence of a wider free trade agreement with the US.

Trade Secretary Kemi Badenoch and Texas Governor Greg Abbott formally signed the agreement in Westminster on Wednesday.

Prime Minister Rishi Sunak called it an “exciting moment”.

Mr Sunak told the Texas governor it was “fantastic” to welcome him to Downing Street to sign the agreement.

The Prime Minister also remarked on the size of Texas’s economy – bigger than Brazil and Canada – before adding: “As they say, everything is bigger in Texas and that now includes our trading relationship, which hopefully we can take to the next level.”

Ms Badenoch, who said she has family in Texas, complimented the governor on how his signature was better than her own before the pair shook hands and posed for photographs with the signed agreement.

In some short remarks, she said: “I wanted to start off by thanking Governor Abbott and the delegation from the great state of Texas.

“I know I speak not just for myself but also the Prime Minister in saying it is our pleasure to welcome you to 10 Downing Street.”

She insisted the agreement will “deliver” for the UK and for the US state.

Mr Abbott, who gave a thumbs-up when he arrived in Downing Street, said he was “proud” to join the UK in signing the agreement.

“Understand that this is far more than a document,” he said.

“What we signed our names to today is a pathway to increased prosperity.”

The agreement marked the UK’s eighth US state-level pact, meaning UK firms now have access to states with a combined GDP of £5.3 trillion, which is equivalent to a quarter of the whole US economy.

It is targeted particularly at the energy sector, as well as life sciences and business services.

Even before the signing of the agreement, British businesses had already enjoyed success in Texas, with the Government’s BioBridge collaboration with the Texas Medical Centre helping 30 UK life sciences companies grow their business in the state.

The agreement is not a trade deal, because individual US states do not have the power to sign these, but is similar to a memorandum of understanding designed to improve co-operation between businesses in Britain and Texas and tackle regulatory barriers to trade.

Achieving a free trade agreement with America had been part of the Conservatives’ 2019 manifesto, but progress towards a deal has stalled, with Ms Badenoch blaming a lack of interest on the part of the current US administration.

Instead, the UK has pursued a series of state-level deals, including Indiana in May 2022 and most recently Florida in November last year.

Although these agreements do not lower tariffs as a free trade deal would, they can provide some help for businesses through recognising UK qualifications or addressing state-level regulatory issues.