U.S. – E.U. 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 447.5 million people, and has a total GDP of $15.29 trillion, as of 2020. The United States has 331 million people and a Gross Domestic Product of $20.95 trillion according to the World Bank, as of 2020. The European Union (EU) consists of 27 countries: Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden. The EU currently has 46 trade agreements with 78 countries.
The EU presidency rotates with each member country taking turns for six months at a time as chair of EU meetings and representing the EU at international events.
Trump Administration Announces Intent to Negotiate Trade Agreements with Japan, the European Union and the United Kingdom
USTR, October 16, 2018
U.S.-EU Trade Agreement Negotiations
USTR, July 25, 2018
Total bilateral trade between the European Union and United States was over $1 trillion in 2021, with goods trade accounting for $762.14 billion, the United States exported $271.7 billion worth of goods to EU member nations. In 2018, 48 out of 50 U.S. States exporter more to Europe than to China. Top U.S. exports to the EU were chemicals, transportation equipment, computer/electronic products, and oil and gas. Imports into the US from the EU totaled $490.44 billion in 2021. Top imports from the EU to the U.S. were chemicals, transportation equipment, non-electrical machinery, reimports, and computer and electronic products.
The U.S. and EU transatlantic economy support 16 million jobs, accounts for one third of world GDP, and 30% of world trade. 4.7 million jobs in the U.S. are directly supported by European companies in the U.S. (AmCham Europe Report). 14.8 million EU tourists traveled to the U.S. in 2015. The top five service exports from the US to the EU are: business services including Telecom, travel including passenger fares, royalties and licensing fees, financial services including insurance, and transport. The top five agricultural exports from the US to the EU are: tree nuts, soy beans, wine and beer, prepared food, and oils. The U.S. and EU are each other’s primary source and destination for foreign direct investment (FDI). The U.S. invested $3.6 trillion in the EU in 2018, representing 61% of total U.S. investment abroad, and the EU invested $3 trillion in the U.S., representing 68% of total FDI in the U.S.(AmCham Europe Report).
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 prior to President Trump taking office. However, President Trump put the TTIP negotiations into a ‘deep freeze’.
In October of 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.
The CalChamber is hopeful that the U.S. and EU will begin FTA 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.
The California Chamber of Commerce, 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.
Trading Partner Portal
- U.S.-EU Trade and Investment Ties: Magnitude and Scope
Congressional Research Services, July 30, 2018