Facts & Figures: Why Europe Matters

The transatlantic economy is considered the foundation of the global economy, generating $3.75 trillion a year in total commercial sales, and nearly half of global GDP. This makes the commercial and economic ties between Europe and the United States the largest in the world in terms of both size and scope. This strong economic relationship is bolstered by the political, security, social, and historical ties that bind the U.S. and Europe together. Click here to skip to the graphs and charts below.

The current global economic crisis underscored the deep interconnections that have come to exist between different areas of the world, especially those between Europe and the U.S. (see graph/chart 1). For America, our commercial ties with Europe translate into an ever-expanding and developed marketplace for our goods and services; a source of domestic employment for European firms located in the United States; a generator of growth and income; and a haven for investment. As such, all efforts should be made by the public and private sectors in both the U.S. and Europe to further trade and investment, remove regulatory barriers, and improve transatlantic relations at all levels. This is the mission of the Europe-Eurasia Team at the U.S. Chamber of Commerce.

Europe as an employer

14 million workers are employed in the transatlantic economy; many of them are in high wage jobs.
About 3.6 million US workers are directly employed by European majority-owned foreign affiliates.

Europe as a market

5 out of the top 10 export markets for US services in 2007 were in Europe.
US service exports to the EU have more than doubled between 1997 and 2007, reaching nearly $189 billion in 2007, or 42% of total US service exports.
Due to the similarities between the US and Europe, demand for services between the two will also be similar, offering more possibilities for US companies to successfully market and sell their services abroad.

Europe as a source of growth and income

US foreign affiliate income from Europe was $177 billion in 2007, or almost half of total US foreign affiliate income – more than double what it was from all of Asia at $70 billion.
Total transatlantic foreign affiliate sales amounted to $3.83 trillion in 2006, compared to $1.5 trillion in Asia, and $666 billion in Latin America (see graph/chart 2).
US foreign affiliates are the recipients of about half of all European R&D investments.
The transatlantic economy accounts for 45% of world GDP, 23% of world exports, and 30% of world imports (see graph/chart 3).
Europe represents the largest U.S. export market after NAFTA, totaling 26% of all U.S. exports (see graph/chart 4).
74% and 75% of merger and acquisition sales and purchases, respectively, take place within the transatlantic economy.

Europe as an investment opportunity

6 of the top 10 U.S. investment destinations for the past 8 years have been in Europe, proof of the continuous stability and low risk the European market promises.
This is complemented by the fact that the EU has the largest economy in the world ($18.85 trillion in 2008), unified by the presence of the Euro, which simplifies transactions and improves market liquidity; and the free movement of capital, goods, people and services within the 27 member states.
U.S. FDI in Europe totaled $200 billion, compared to about $10 billion in China (see graph/chart 5).
New EU entrants Romania and Bulgaria are proving very welcoming to investors, with a favorable economic climate that boasted an 8.4% and 6.3% increase in GDP in 2008, respectively.
Moreover, the vast Eurasian landmass includes some of the fastest growing economies in the world; transforming the region into a new – and radically distinct – market that has great potential for substantial growth; or, conversely, as a destabilizing factor for the economic powerhouses surrounding it.

Sources

Daniel S. Hamilton and Joseph P. Quinlan, The Transatlantic Economy, 2009: Annual Survey of Jobs, Trade and Investment between the United States and Europe
Bureau of Economic Analysis, U.S. International Trade in Goods and Services, March 2009
IMF, World Economic Outlook 2008
CIA, World Factbook