The European Union, currently a 28-nation bloc, is the single largest foreign investor in the United States, with $2.37 trillion in foreign direct investment, according to a recent study by the EU Delegation to the U.S.
The U.S. and the EU enjoy a balanced trade relationship to the benefit of both: $528 billion in U.S. exports of goods and services to the EU in 2017 and a commensurate $629 billion in EU exports of goods and services to the U.S., the study found. This trade and investment relationship generates nearly 7 million jobs for U.S. workers.
An online interactive data tool lets users explore the depth and breadth of the EU’s economic footprint in the United States further, and showcases how vitally important EU trade and investment is for the economy of each and every U.S. state.
Users can download infographics for each U.S. state, with data on the level of goods and services exports to the EU, the level of EU investments, the number of jobs created thanks to EU trade and investment, and the revenues from EU visitors in the state. The website also provides information on a sample of European companies with foreign direct investments in each state.
california2For more information on the EU’s Economic Footprint Study, visit www.euintheustrade.org
U.S.–EU Free Trade Agreement
The trans-Atlantic economic partnership is a key driver of global economic growth, trade and prosperity, and represents the largest, most integrated and longest-standing regional economic relationship in the world. The many reasons to support this relationship come from an economic perspective, a geopolitical perspective, a company benefit perspective, as well as regulatory cooperation, and technological innovation perspectives.
The EU market represents more than 511 million people, and has a total gross domestic product (GDP) of $17.28 trillion, as of 2017. The United States has 325.7 million people and a GDP of $19.39 trillion as of 2017 (World Bank).
With the United Kingdom expected to exit the European Union in March 2019, the EU will consist of 27 countries: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Mediterranean Island of Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.
Europe and the United States had been negotiating trade talks for a potential Transatlantic Trade and Investment Partnership (TTIP) to further the largest regional trading and investment relationship in the world before President Donald J. Trump took office. Upon his inauguration, however, President Trump put the TTIP negotiations into a “deep freeze.”
In October 2018, President Trump announced his intent to enter into trade negotiations with three new markets, one of which is the EU. President Trump’s goal by doing so is to open new markets for U.S. farmers and companies where they currently face significant barriers. The Trump administration hopes that a new high-standard trade agreement with each of these markets will expand the United States’ ability to sell “made in America” products around the globe and deepen partnerships with vital allies.
Anticipated Action
The California Chamber of Commerce is hopeful that the U.S. and EU will begin free trade agreement negotiations in 2019 to deepen the world’s largest trading and investment relationship, with a focus on trade and investment initiatives. The CalChamber supports the following issues being discussed during negotiations:
- eliminating tariffs on trans-Atlantic trade in goods;
- establishing compatible regulatory regimes in key sectors to address regulatory divergences that unnecessarily restrict trade;
- a bilateral investment agreement;
- liberalizing cross-border trade in services; and
- bilateral expansion of government procurement commitments.
Progress has been slow as to whether to include agriculture and tariffs in the negotiations.
Separately, the California Chamber of Commerce is hopeful that the U.S. and U.K. will begin FTA negotiations as soon as the U.K. formally exits the European Union. A U.S.-U.K. Trade and Investment Working Group, which is focused on providing commercial continuity for U.S. and U.K. businesses, workers, and consumers as the U.K. leaves the European Union has been formed. The working group has laid the groundwork for future FTA negotiations as it has explored ways the two countries can collaborate to promote open markets and freer and fairer trade around the world.
CalChamber Position
The CalChamber, in keeping with long-standing policy, enthusiastically supports free trade worldwide, expansion of international trade and investment, fair and equitable market access for California products abroad and elimination of disincentives that impede the international competitiveness of California business.
Strengthening economic ties and enhancing regulatory cooperation through agreements with our top trading partners that include both goods and services, including financial services, is essential to eliminating unnecessary regulatory divergences that may act as a drag on economic growth and job creation.
Agreements like this have the capability of ensuring that the United States may continue to gain access to world markets, which will result in an improved economy and additional employment of Americans.
Staff Contact: Susanne T. Stirling
