Do non-binding trade promotion partnerships create trade? Evidence from UK–US state memoranda of understanding

Governments increasingly use soft, non-binding trade promotion partnerships alongside, or instead of, binding agreements, but their effects remain unclear. This paper studies the UK’s post-Brexit memoranda of understanding with individual US states. These partnerships promote trade and investment but cannot alter tariffs or establish enforceable market-access commitments. Using a structural gravity model and monthly state level goods trade data, we find no evidence of broad goods trade creation. Aggregate effects are insignificant, and product- and state-level estimates are heterogeneous rather than systematically positive, suggesting MoUs support economic cooperation rather than producing the broad trade effects associated with traditional binding agreements.