U.S.–EU Free Trade Agreement

U.S.–EU Free Trade Agreement

Huge Market Represents Many Opportunities

  • Trade with the European Union supports an estimate 2.6 million jobs in the United States.
  • The U.S. had a services trade surplus of $55 billion with EU in 2016.
  • EU countries purchase about 18% of California exports.


U.S. Goods ExportsThe 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.

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.


Total bilateral trade between the European Union and United States was more than $1 trillion in 2017, with goods trade accounting for $718 billion. The United States exported $283 billion worth of goods to EU member nations. California exports to the EU were $31.29 billion in 2017. California is the top exporting state to the EU, with computers, electronic products, chemical manufactures, and transportation equipment as the state’s leading export sectors to the region. EU countries purchase roughly 18% of all California exports. For California companies, the single market presents a stable market with huge opportunity.

Forty-four of 50 U.S. states export more to the EU than to China. The U.S. and EU transatlantic economy supports 15 million jobs, accounts for 50% of world GDP, and 30% of world trade. In 2015, 14.8 million EU tourists traveled to the U.S. The top five service exports from the U.S. 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 U.S. agricultural exports 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). In 2017, the U.S. invested $3.2 trillion in the EU and the EU invested $2.3 trillion in the U.S.

Previous Activity

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.

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.

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Policy Contact

Susanne-Stirling-2012-300x300Susanne Stirling
Vice President, International Affairs