Member States gave the European Commission the green light to start trade and investment talks with the United States.

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Category: General
Published on Wednesday, 01 October 2014 12:19
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United States

 

On 14 June, Member States gave the European Commission the  green light to start trade and investment talks with the United States.

The launch builds on the  report of a High-Level Working Group on Jobs and Growth, published in  February 2013. In March 2013, the European Commission proposed negotiating  guidelines to the Member States and released an impact  assessment on the future of the EU-US trade relations and an in-depth independent  study on the potential effects of the EU-US TTIP.

When negotiations are completed, this EU-US agreement would  be the biggest bilateral trade deal ever negotiated – and it could add around  0.5% to the EU's annual economic output.

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

Transatlantic Trade and Investment Partnership

 

The EU and US have decided to take their economic relationship to a higher level by agreeing to launch negotiations for a comprehensive trade and investment agreement.

More information on TTIP

Trade picture

  • Total US investment in the EU is three times higher than in all of Asia.
  • EU investment in the US is around eight times the amount of EU investment in India and China together.
  • EU and US investments are the real driver of the transatlantic relationship, contributing to growth and jobs on both sides of  the Atlantic. It is estimated that a third of the trade across the Atlantic  actually consists of intra-company transfers.
  • The  transatlantic relationship also defines the shape of the global economy as a  whole. Either the EU or the US is the largest trade and investment partner for  almost all other countries in the global economy.
  • The EU  and the US economies account together for about half the entire world GDP and  for nearly a third of world trade flows.

EU-USA "trade in goods" statistics

Table
EU importsEU exportsBalance201120122013Years0200400BillionsEU exports: 264.1 €bn
Trade in goods 2011-2013, € billions
YearEU importsEU exportsBalance
2011 192.0 264.1 72.1
2012 206.5 293.2 86.7
2013 196.1 288.3 92.2

EU-USA "trade in services" statistics

Table
EU importsEU exportsBalance201120122013Years0100200BillionsEU exports: 148.1 €bn
Trade in services 2011-2013, € billions
YearEU importsEU exportsBalance
2011 141.1 148.1 6.9
2012 148.9 163.0 14.1
2013 146.1 158.8 12.7

Foreign direct investment

Table
Inward stocksOutward stocksBalance201202505007501,0001,2501,5001,750
Foreign direct investment 2012, € billions
YearInward stocksOutward stocksBalance
2012 1536.4 1655.0 118.6

More statistics on United States

EU and United States

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 and stimulate the work on transatlantic economic convergence. The TEC is currently the only EU-US high level forum in which economic issues can be  discussed in a coherent and coordinated manner. It brings together a wide range of ongoing economic cooperation activities in issues of mutual interest and provides for a platform to give political  guidance and direction to this work. At the same time, the TECprovides for a  political forum for discussing strategic global economic questions.         

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

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

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 EU Trade Commissioner Karel De Gucht and US Trade Representative  Ron Kirk.

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, as appropriate.

The Working Group has provided an interim report to Leaders on the status of its work in June 2012 and a final report on 13 February 2013. The HLWG reached the conclusion that a  comprehensive agreement that addresses a broad range of bilateral trade and  investment issues, including regulatory issues, and which contributes to the  development of global rules, would provide the most significant mutual benefit  of the various options considered.   Presidents Obama, Barroso and Van Rompuy  endorsed the recommendation and announced  that each side will initiate the internal procedures necessary to launch  negotiations on a Transatlantic Trade and Investment Partnership agreement.

Read the press statement

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.

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

Trading with the United States