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Strong EU-U.S. Trade

According to the European Commission:
The EU and US are 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 some 2% of EU-US trade.
One of those trade disputes is that the EU and the US accuse each other of granting illegal subsidies to Boeing and Airbus. See "U.S. details complaint on Airbus subsidies" in International Herald Tribune and the latest statements on this dispute from the European Union. I have not found the latest statement from the US Trade representative, but only a US press release concerning that never ending dispute from May 2005, which indicates that this is a long dispute...
Related: Our reader ROA recommends "Jumbo Trouble: The Airbus A380 was supposed to be the future of aviation. Will it ever get off the ground?" in
Popular Mechanics.


What About Clients? on : EU: In 2005, nearly 30% of Euro-US trade was in services.

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Increasingly in global markets, goods (i.e., products and tangible things you can see and touch) are just part of the bundles of solutions our clients and we sell globally. As WAC? has ranted about previously, services are becoming the main...

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Don S on :

Yet another round in the airliner wars. The most interesting part is actually the Popular Mechanic's piece on what went wrong with the A380 as an engineering and business problem. The A380 will fly I have no doubt. Too many people have invested too much money in it to allow it to flop completely. But it may never earn a single euro for Airbus, or earn money very very late. It appears they made a number of critical errors. Mostly they began with the most demanding customers, the Emirates and Singapore Airlines - who wanted a luxury aircraft with extra amenities. This put too much of a load on the wiring system. They also changed from copper to aluminium to save weight. In short they overloaded their engineering team. The problem now is time. They have given Boeing two critical years to catch up. The *new* 747-800 seems like it's close to the A380 and will be flying near to the same time. Boeing has the Dreamliner coming out with 50% composite materials. If Boeing can deliver that with minimal delays then they will be coining money while Airbus is still bleeding from the A380 and waiting for the A350 to come out. Right smack in the middle of the 'middle-size' jet segment that Airbus had made their own. Boeing will probably start their own 'superliner' project at some point & the A380 delay can only help that project. (Onr analyst seemed to be saying that the A380 would be obsolote almost before it began flying. If I were a French or German I'd be very concerned about the potential politicisation of Airbus. Both the French and German governments have expressed their intention to buy larger shares in Airbus; production and business decisions could end up done for political reasons, giving work to one country or another. That would be very bad for Airbus. It may turn into one of those subsidised national champions rather than a world-beating engineering company.

alec on :

I'd love a post about the agricultural subsidies that seem to effect transatlantic trade! But this is a good start.

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