The United States boasts the world’s largest and most intricate bilateral trade and investment relationship with the European Union. This transatlantic bond represents the most integrated economic partnership globally. When considering the flow of goods, services, and investments, the EU and the US stand out as each other’s paramount trading partners, by a significant margin.
This robust trade alliance is not just about numbers; it’s the bedrock of millions of jobs in the United States and the EU. The European Union serves as a dependable supplier of essential resources to the US, encompassing critical medicinal ingredients, advanced machinery, and vital aerospace components. Conversely, the EU is the largest consumer of US natural gas and oil, a crucial factor in ensuring transatlantic energy security and enabling a united front against geopolitical challenges, such as Russia’s aggression against Ukraine.
The Expansive Trade Landscape
The trade relationship across the Atlantic is unequivocally the most commercially significant worldwide. In 2023, the exchange of goods and services between the EU and the US soared to an impressive €1.6 trillion. This staggering figure translates to approximately €4.4 billion worth of goods and services traversing the Atlantic daily.
A noteworthy aspect of this trade is its balanced nature. The difference between EU exports to the US and US exports to the EU in 2023 was a mere €48 billion, only around 3% of the total trade volume.
Breaking down the specifics, the total bilateral trade in goods reached €851 billion in 2023. The EU’s goods exports to the US amounted to €503 billion, while imports from the US were €347 billion, resulting in a substantial goods trade surplus of €157 billion for the EU.
In the realm of services, the bilateral trade between the EU and the US totaled €746 billion in 2023. The EU exported services worth €319 billion to the US and imported €427 billion, leading to a services trade deficit of €109 billion for the EU.
Beyond trade in goods and services, investment flows are equally significant. EU and US companies hold a massive €5.3 trillion in investments within each other’s markets (data from 2022). Significantly, US exports of goods and services to the EU support an estimated 2.3 million jobs in the US, while investments from EU firms in the US provide employment for 3.4 million individuals. Further details can be found on the EU’s Business Footprint in the United States Project.
Strategic Cooperation and Future Directions
While the EU stands as one of America’s biggest trade partners, the relationship extends beyond mere commerce. The EU and US actively collaborate on strategic initiatives, most notably through the EU-US Trade and Technology Council (TTC). Launched in 2021, the TTC serves as a vital platform for coordinating approaches to critical global trade, economic, and technology issues. It aims to strengthen transatlantic trade and economic ties based on shared democratic values, ensuring that this crucial partnership remains robust and adaptable in a rapidly changing global landscape.
Despite the depth and breadth of the EU-US trade relationship, a dedicated free trade agreement is still absent. Negotiations for the Transatlantic Trade and Investment Partnership (TTIP) were initiated in 2013 but were ultimately halted in 2016. Formally closed in 2019, the TTIP discussions highlight both the potential and the complexities of further integrating these two massive economies.
In conclusion, the economic partnership between the United States and the European Union is a cornerstone of the global economy. As America’s biggest trade partners, the EU and US not only engage in colossal volumes of trade and investment but also foster millions of jobs and collaborate on critical strategic issues. This transatlantic relationship remains indispensable for both economies and the wider global order.
