The European Union and the United States stand as the giants of global commerce, bound by the largest and most deeply integrated bilateral trade and investment relationship in the world. When considering goods, services, and investments, the EU and the US are unequivocally each other’s premier trading partners, a testament to a robust and dynamic economic alliance.
This intricate web of trade and investment is not merely figures on a spreadsheet; it represents millions of jobs in the United States that are directly linked to the EU-US economic partnership. The European Union plays a vital role as a dependable supplier of critical resources to the United States, including essential medicinal ingredients and pharmaceutical products, cutting-edge machinery and equipment, and crucial aerospace parts and components. Conversely, the European Union is the largest global purchaser of United States natural gas and oil, a factor of paramount importance for ensuring transatlantic energy security and fostering a united and powerful response to geopolitical challenges such as Russia’s military aggression against Ukraine.
The Trade Landscape: A Closer Look
- The transatlantic trade relationship is undeniably the cornerstone of global commerce, representing the most significant commercial artery in the world’s economy.
- In 2023, the total value of EU-US trade in goods and services reached a staggering €1.6 trillion. This colossal figure translates to approximately €4.4 billion worth of goods and services crossing the Atlantic every single day, highlighting the sheer volume of this economic exchange. To put this into a US context, considering the approximate exchange rate, this daily flow is equivalent to billions of US dollars, underscoring the immense financial scale of this trade relationship for both economies.
- The EU-US trade in goods and services demonstrates a remarkable balance. In 2023, the difference between EU exports to the US and US exports to the EU was a mere €48 billion, representing just 3% of the total trade volume between these economic powerhouses. This near equilibrium signifies a mature and reciprocal trading partnership.
- Within the goods sector, bilateral trade reached €851 billion in 2023. The EU’s export of goods to the US market amounted to €503 billion, while imports from the US totaled €347 billion. This resulted in a goods trade surplus of €157 billion for the EU.
- The services sector also plays a crucial role, with total bilateral trade valued at €746 billion in 2023. EU exports of services to the US were €319 billion, while imports from the US reached €427 billion, leading to a services trade deficit of €109 billion for the EU.
- Beyond trade in goods and services, the EU and the US are also major investment partners. As of 2022, EU and US firms held a massive €5.3 trillion worth of investments in each other’s markets, further solidifying their intertwined economic destinies.
- US exports of goods and services to the EU are estimated to support 2.3 million jobs within the United States, and EU companies’ investments in the US provide employment for 3.4 million people. Further details are available through the EU’s Business Footprint in the United States Project.
Alt text: Chart illustrating the balanced EU-US trade relationship in goods and services, highlighting the total value and near equilibrium.
EU-US Cooperation: Addressing Global Challenges
Statements on Recent US Announcements
The EU-US Trade and Technology Council (TTC)
Recognizing the evolving global landscape and the need for closer collaboration, the European Union and the United States launched the EU-US Trade and Technology Council (EU-US Trade and Technology Council (TTC)) at their summit in Brussels on June 15, 2021. The most recent ministerial meeting took place in Leuven on April 4 and 5, 2024. The TTC (TTC) serves as a vital platform for the EU and the US to harmonize their approaches to critical global trade, economic, and technology issues. It is designed to strengthen transatlantic trade and economic relations, rooted in shared democratic values and a commitment to a rules-based international order.
Further information regarding events related to the Trade and Technology Council can be found on the European Commission’s dedicated Futurium website, a hub for tracking the progress and initiatives of this important collaboration.
Alt text: Image from the EU-US Trade and Technology Council ministerial meeting in Leuven, showcasing transatlantic cooperation.
Trade Agreement Negotiations
Despite the EU and US being each other’s largest trade and investment partners, a comprehensive free trade agreement between the two entities remains absent. The Transatlantic Trade and Investment Partnership (TTIP) negotiations, initiated in 2013, aimed to bridge this gap but were ultimately halted in 2016 without reaching a conclusion. The TTIP negotiations were formally closed in 2019, leaving room for future discussions on deeper trade integration.
Navigating Trade with the United States
In conclusion, the EU-US trade relationship is a cornerstone of the global economy, characterized by its immense scale, balance, and deep integration. While a dedicated free trade agreement is still pending, the ongoing dialogue through the Trade and Technology Council and the existing robust trade flows underscore the enduring importance of this transatlantic partnership. Understanding the dynamics of this relationship, including the daily flow of €4.4 billion (equivalent to billions of US dollars), is crucial for businesses and policymakers alike navigating the complexities of international trade and economic cooperation.
