New Study Reveals Why U.S. Firms Should Stay the Course in Europe

Despite Current Economic Challenges, Study Finds Europe Remains the Most Profitable and Easiest Region to do Business for U.S. Companies 

WASHINGTON, D.C. – A study released today by Joseph Quinlan, Transatlantic Fellow at the Center for Transatlantic Relations at Johns Hopkins University, and the German Marshall Fund, reveals that despite the Eurozone crisis, the region offers tremendous opportunities and remains the most profitable region in the world for U.S. companies. The study was commissioned by the American Chambers of Commerce in Europe.

“The prophesying by the pundits that the future of the world economy lies with emerging markets like China, suggests that Europe is becoming less and less relevant. Nothing could be further from the truth,” said Quinlan. “The report reveals that despite Europe’s economic difficulties in 2011, the region still accounted for over half – 53% – of total US foreign affiliate income last year. This was 156% larger than reported income from Asia—a figure that speaks volumes about Europe’s underlying importance to American businesses.”

“We must continue to build on the enormous advantage of the highly integrated transatlantic market,” said Peter Rashish, the U.S. Chamber’s vice president for Europe and Eurasia. “The U.S. Chamber will continue to push for negotiations of new market-opening trade agreements like the Transatlantic Economic and Trade Pact, which would provide tremendous benefits for both economies.”

The report found many advantages to doing business in Europe. The European combined economy is larger than that of the U.S.  And in the World Economic Forum’s latest rankings of global competitiveness, European countries account for seven of the top ten nations. Europe also comes out on top when it comes to ease of doing business. According to the World Bank, 12 European economies ranked in the top 25 most business-friendly.

Additionally, the countries on Europe’s periphery, notably the Middle East, Russia, Turkey and North Africa remain key sources of growth and consumption.  Europe’s trading links to those countries have deepened and thickened over the past decade to the benefit of U.S. companies operating in Europe.