EU-U.S. Economic Ties: Framework, Scope, and Magnitude
Abstract
The U.S.-European Union (EU) economic relationship is the largest in the world -- and it is growing. The modern U.S.-European economic relationship has evolved since World War II, broadening as the 6-member European Community expanded into the present 27-member European Union. The ties also have become more complex and interdependent, covering a growing number and type of trade and financial activities. In 2008, $1,571.2 billion flowed between the United States and the EU on the current account. The EU as a unit is the largest merchandise trading partner of the United States. In 2008, the EU accounted for $274.5 billion of total U.S. exports (or 21.1%) and for $367.9 billion of total U.S. imports (or 17.5%) for a U.S. trade deficit of $93.4 billion. The EU is also the largest U.S. trade partner when trade in services is added to trade in merchandise, accounting for $198.3 billion (or 36.4% of the total in U.S. services exports) and $152.1 billion (or 37.6% of total U.S. services imports) in 2008. In addition, in 2008, a net $148.2 billion flowed from U.S. residents to EU countries into direct investments, while a net $181.1 billion flowed from EU residents to direct investments in the United States. Policy disputes arise between the United States and the EU generating tensions that sometimes lead to bilateral trade disputes. Yet, in spite of these disputes, the U.S.-EU economic relationship remains dynamic. But increasing economic interdependence brings challenges as well as benefits. As the U.S. and EU economies continue to integrate, some sectors or firms will "lose out" to increased competition. Greater economic integration also challenges long-held notions of "sovereignty," as national or regional policies have extraterritorial impact. U.S. and EU policy makers are likely to face the task of how to manage the increasingly complex bilateral economic relationship in ways that maximize benefits and keep frictions to a minimum.
Document Details
- Document Type
- Technical Report
- Publication Date
- Mar 20, 2009
- Accession Number
- ADA497757
Entities
People
- William H. Cooper
Organizations
- Library of Congress