The EU and the United States of America

26 August 2006
by eub2 -- last modified 12 April 2018

The European Union and the United States have the largest bilateral trade and investment relationship and enjoy the most integrated economic relationship in the world.

Given the low average tariffs (under 3%), the key to unlocking this potential lies in the tackling of non-tariff barriers. These consist mainly of customs procedures and behind the border regulatory restrictions.

The non-tariff barriers come from diverging regulatory systems (standards definitions notably), but also other non-tariff measures, such as those related to certain aspects of security or consumer protection.

The Transatlantic Economic Council was set up in 2007 to guide the work on transatlantic economic convergence. The TEC is the only EU-US high level forum in which economic issues can be discussed in a coherent and coordinated manner. It brings together a range of ongoing economic cooperation activities in issues of mutual interest and provides a platform to give political guidance to this work. It also provides a political forum for discussing strategic global economic questions.

The TEC brings together members of the European Commission and the US Cabinet who have political responsibility for closer economic ties. Three "advisory" groups have been set up to help guide the work of the TEC:

the Transatlantic Legislators' Dialogue

the Transatlantic Consumer Dialogue

the Transatlantic Business Dialogue

In addition, civil society is consulted on the TEC's objectives and debriefed after its annual meetings.

More information on TEC

At the 28 November 2011 EU-US Summit meeting, leaders directed the Transatlantic Economic Council to establish a High-Level Working Group on Jobs and Growth, led by the EU Trade Commissioner and the US Trade Representative.

The High Level Working Group was tasked to identify policies and measures to increase EU-US trade and investment to support mutually beneficial job creation, economic growth, and international competitiveness. Leaders asked the HLWG to work closely with all public and private sector stakeholder groups, and to draw on existing dialogues and mechanisms.

The Working Group has provided an interim report to leaders its work in June 2012 and a final report on 13 February 2013. The group reached the conclusion that a comprehensive agreement that addresses a broad range of bilateral trade and investment issues would provide the most significant mutual benefit of the options considered.

The EU and the US formally launched negotiations on the Transatlantic Trade and Investment Partnership (TTIP) at the beginning of 2013.

Following 15 rounds of talks negotiations were stopped without conclusion at the end of 2016, following the change of Administration in Washington. The logic for a further deepening of the transatlantic trade and investment relationship remains compelling but it is premature to anticipate whether or when negotiations could resume.

More information on TTIP

Inevitably for two economies of such size with such a high volume of trade, the EU and the US encounter a number of trade disputes which are handled through the dispute settlement mechanism of the WTO.

More information on the current EU-US trade disputes

Although they tend to grab headlines, these disputes currently only affect some 2% of EU-US trade.