Economic Benefits of a Transatlantic Trade and Investment Partnership
The United States and European Union (EU) have by far the largest economic relationship in the world. The EU economy is slightly larger than that of the U.S., with both generating over $15.6 trillion in GDP; together, we generate half the world’s output. And because our ties are based on investment (over $3.6 trillion both ways) rather than trade, we have a total commercial relationship worth over $5 trillion – over $1 trillion in trade, some $300 billion in investment flows, and over $4 trillion in sales by our foreign investments.
Indeed, right now, every state – and every Congressional district – has some trade with the EU, whether a soy farmer in Iowa, an almond grower in California, or an auto-parts manufacturer selling to BMW’s factory in South Carolina.
Yet in today’s economic climate, we can and must do better.
This is why the Business Coalition for Transatlantic Trade is dedicated to concluding and implementing an ambitious comprehensive trade and investment agreement between the United States and the European Union: to promote competitiveness, spur growth and create good-paying jobs in our two economies.
Such an agreement would have important geo-strategic as well as immense economic benefits. The United States and the European Union (and its 28 member countries) are and will remain one another’s key allies and partners in addressing virtually every global challenge we face. The importance of our shared values – respect for the individual, the rule of law, democratic political systems, well-regulated open markets – cannot be over-stated. The vast majority of NATO members are members of the European Union; the EU spurs development as the world’s largest economy, trader, investor and aid donor. As the American military presence in Europe declines and as other countries gain in wealth and power, a more integrated transatlantic economy will maintain the strength of this partnership for years to come.
Given the immense size of our ties, even small improvements will bring large gains to our economies. With an ambitious trade and investment agreement, in five years U.S. and EU exports to each other would be over $150 billion higher, our economies some $250 billion bigger, and we would generate an additional 500,000 high-paying jobs. We would also boost the global competitiveness of our firms, with their highly-integrated transatlantic operations. Just launching the negotiations will boost market confidence; additional gains will come as businesses invest during the negotiations to meet to the new context an agreement brings; and further growth will come as the concluded agreement eliminates tariffs and opens other opportunities.
Integrating the transatlantic market-place is not a new idea; then EU Trade Commissioner Leon Brittan called for a Transatlantic Free Trade Agreement in 1995. But with the creation of the new WTO and the launch of the Doha negotiations, the time has not be propitious for a bilateral agreement, until now. Our economies need the boost; multilateral liberalization has faltered; and bilateral trade deals have proliferated so that the United States is now one of a few countries that still faces full tariffs in the EU market.
This must change. A comprehensive and ambitious transatlantic trade agreement should open markets for trade in goods and services, investment, procurement, capital and people, while creating a framework that will help us bridge regulatory differences. The Business Coalition for Transatlantic Trade believes such a simple, realistic and creative approach can allow negotiations for a transatlantic trade and investment agreement to conclude quickly, while the regulatory work goes on. The approach and the issues we will face in reaching this objective are addressed in more detail across this website.