The EU and the United States of America

The EU and the US are each other's main trading partners and account for the largest bilateral trade relationship in the world. They are also the largest players in global trade.

BILATERAL TRADE RELATIONS

Introduction

The EU and the US are each other's main trading partners. When the world’s two largest economies account for a combined total of 57% of world GDP, there is much to gain from more trade and investment and less barriers between them.

The EU and US a re responsible together for about two fifths of world trade. Trade flows across the Atlantic are running at around €1.7 billion a day. In the year 2003, the total amount of two-way investment was over €1.5 trillion, composed of €731 billion of EU Foreign Direct Investment (FDI) in the US and around €772 billion of US FDI in Europe. The overall "transatlantic workforce" is estimated at 12 to 14 million, of which roughly half are Americans who owe their jobs directly or indirectly to EU companies. In the year 2005, exports of EU goods to the US amounted to €250 billion, while imports from the US amounted to €234 billion. Concerning trade in services, EU exports to the US amounted to €108.6 billion in 2004 while EU imports from the US amounted to €93.0 billion.

The two economies are interdependent to a high degree. Close to a quarter of all EU-US trade consists of transactions within firms based on their investments on either side of the Atlantic. The transatlantic relationship defines the shape of the global economy as a whole as either the EU or the US is also the largest trade and investment partner for almost all other countries.

Being the largest players in global trade, the EU and the US are committed to cooperate both politically and economically, be it on bilateral issues or in the multilateral framework of the World Trade Organisation (WTO). Several trade-related disputes which regularly hit the headlines in reality only impact of some 2% of EU-US trade.

The New Transatlantic Agenda

The New Transatlantic Agenda (NTA) with its accompanying EU-US Joint Action Plan of December 1995 as well as the Transatlantic Economic Partnership created in May 1998 forms the main structure of our bilateral relations. They are the foundations of EU-US cooperation in its efforts to reduce or eliminate barriers to trade and investment between them.

The last EU-US Summit of June 2005 adopted a joint declaration on strengthening the EU-US bilateral economic partnership. By doing this, the European Union and the United States resolved to give a renewed impetus to their transatlantic trade and investment relations.

The 2005 Economic Summit Declaration duly launched a new EU-US Economic Integration and Growth Initiative that sets up a high-level Regulatory Co-operation Forum through which EU and US regulators would be encouraged to exchange views, share experiences and learn from each other.

Furthermore leaders agreed to move forward in the fields of investment (considering how to address and reduce remaining obstacles), public procurement (moving beyond existing and future GPA commitments at the EU-US bilateral level) and services (determination to achieve a comprehensive first-step EU-US air services agreement, encouraging competent authorities on both sides to look into the mutual recognition of professional qualifications).

Given the importance both sides attach to Intellectual Property Rights enforcement in third countries, a separate IPR Declaration was adopted. In this Declaration, the EU and the US pledge to promote strong and effective enforcement at our borders, to strengthen co-operation to reduce global piracy and counterfeiting and to foster public-private partnerships to protect intellectual property.

At the first ever informal EU-US Economic Ministerial held in Brussels on 30 November 2005, both sides adopted the work programme for the Economic Initiative which focuses - inter alia - on IPR enforcement, regulatory cooperation, trade & security and improving innovation. On IPR enforcement, both sides agreed to set up a working group to present an IPR enforcement cooperation strategy for third countries at the 2006 EU-US Summit. On regulatory cooperation, Ministers and Commissioners welcomed plans to hold the first two meetings of the newly-established high-level Regulatory Cooperation Forum in the first half of 2006. The first event took place in Brussels in January 2006, focussing on good regulatory practices and involving key US and European regulators and stakeholders. The second forum event will address best cooperative practices and identify new prospective areas for cooperation from regulatory work plans. On investment, both sides are expected to meet in the first quarter of 2006 to conduct a review of major investment barriers.

Trade Disputes

Trade disputes also belong to the EU-US bilateral agenda. The EU endeavours to defend its interests in the framework of WTO rules. In March 2006, telecoms sanctions were withdrawn by the US and then by the EU, healing a dispute that has dogged both sides of the Atlantic for over a decade. Earlier in 2006, the repeal of the Byrd amendment by the US Congress was welcomed by the Commission, with EU sanctions now being reduced in tandem with remaining Byrd payments. Nevertheless, US failure to comply with a number of WTO dispute settlement findings still continues to be a major EU concern. For instance, the repeal of the US FSC/ETI export-contingent tax scheme includes transitional and grandfathering provisions which have been repeatedly ruled WTO-incompatible. The EU will continue to raise compliance concerns with the US authorities. In addition, unfair anti-dumping measures taken by the United States against the EU continue to be a major trade irritant. In over 50 anti-dumping cases and reviews since 1995, US duties have been inflated using the zeroing methodology which has already been found WTO-incompatible and is currently subject to further litigation.

EU External Trade with the United States web links