Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
Last Published: 6/1/2016
The United States and the European Union (EU), with its 28 member states, enjoy a mature economic relationship that is characterized by nearly $4 trillion in two-way investment.  U.S. exports of goods and services to the EU-28 in 2015 reached approximately $490 billion and imports from the EU, $604 billion.  It is estimated that transatlantic commerce generates more than 15 million jobs. U.S. and European foreign affiliates employed 8.3 million workers in 2014 which is a 4 percent increase over 2013.

Recognizing that the U.S.-EU economic relationship is already the world’s largest, accounting for one-third of total trade in goods and services and nearly half of global economic output, President Obama, in his State of the Union address on February 12, 2013, announced the Administration’s plans to begin negotiations on a Transatlantic Trade and Investment Partnership (T-TIP) with the EU.  

T-TIP is an ambitious and comprehensive trade and investment agreement that will promote transatlantic international competitiveness, jobs and growth.  T-TIP aims to address non-tariff barriers that impede trade in goods and services and seeks to promote greater compatibility, transparency and cooperation in the regulatory and standards arenas.  

The spring forecast released on May 3, 2016 projects that the recovery in the Euro Area will remain slow despite a favorable environment of low oil prices, a relatively low Euro exchange rate, highly accommodative monetary policy, and supportive fiscal policy. Euro Area growth is projected to be 1.6% in 2016 and 1.8% in 2017, reflecting a slight downward revision from the Winter Forecast (1.7% and 1.9%, respectively) mainly due to the intensified headwinds related to the weakening of global growth. The EU28 is projected to grow at 1.8% in 2016 and 1.9% in 2017.
 
Domestic demand is expected to remain the main driver of growth for the next several years. Euro Area inflation—projected at 0.2% in 2016 and 1.4% in 2017-- remains well below the European Central Bank’s target and is now only set to rebound in the second half of 2016, a lag from previous forecasts. While the Euro Area’s fiscal stance is expected to be slightly expansionary in 2016, in large part due to increased spending by Germany including on refugee-related expenditures, it is expected to return to neutral in 2017. Debt levels are beginning to decline, though more gradually than previously projected due to the slower pace of growth, reaching 91.1% in the Euro Area in 2017. 9.9% unemployment is forecast for 2017 in the eurozone and 8.5% in the entire EU. 

Downside risks include a slowdown in emerging markets, particularly China, continued high geopolitical tensions, and uncertainty of oil price movements or financial market turmoil. Domestic risks include the uncertainty surrounding the UK referendum, the migration crisis, and a possible reemergence of an economic crisis in Greece. 

U.S. business may benefit from the EU’s border free Schengen area which covers 22 of the 28 EU member states and eases the movement of goods and people across air, land, and sea borders.  Ireland and the U.K. have opted out of the Schengen and it is not certain when Bulgaria, Croatia, Cyprus and Romania will join.  

The transatlantic digital economy is an important pillar in the overall U.S.-EU economic and commercial relationship with nearly 15 terabits of cross-border data flowing per second. Both entities are the largest net exporters of digitally deliverable services in the world to each other’s economies comprising 70 percent of bilateral services exports from the United States to Europe and 54 percent of bilateral services imports to the United States. The United States exported a total of $187 billion in digitally deliverable services to Europe in 2014, highlighting the importance of maintaining an open digital ecosystem for both economies.



European Union 28 Trade Development and Promotion