Accounting for 35% of the world’s GDP and generating $5.5 trillion in commercial sales each year, the transatlantic economy is the largest and wealthiest in the world. Recent trends, however, have demonstrated that the economies are starting to diverge.
According to The Transatlantic Economy 2015, a new study released by our sister organization AmCham EU, the US and European economies are increasingly out of step, as gaps widen in terms of growth, jobs, trade, energy and monetary policies.
While the US economy grew by 2.4% in 2014, Europe grew by only 0.9%, a gap expected to increase in 2015. In terms of employment, the US economy seems to be generating jobs at a rapid pace, while Europe is not. The US unemployment rate stood at 5.7% as of February 2015, compared to 9.9% in the EU. Different approaches to the regulation and exploitation of energy and digital technologies are contributing to this growing divergence.
Nevertheless, the US and EU remain each other’s most important trading partners.
Mutual investment and trade across the Atlantic are essential to job creation and prosperity in both the US and Europe. The US is one of the most important markets for European multinationals, while Europe continues to be one of the most attractive regions in the world for US foreign direct investment and one of the most profitable regions for US companies. The US remains the largest source of foreign direct investment in Belgium, reaching a total investment stock of $48 billion in 2013, according to the report. Excluding intra-EU trade, the US accounts for 16.8% of Belgium’s exports and 20.5% of Belgian imports.
Yet, the transatlantic economy stands at a crossroads, and the two actors need to ensure they do not drift further apart. The Transatlantic Trade and Investment Partnership (TTIP) offers real opportunities to solidify the relationship. TTIP will lead to a positive evolution on both sides of the Atlantic, bridging the gaps and bringing the EU and US economies closer together.
A recent joint statement, signed by 20 EU AmChams, calls for more engagement with civil society around TTIP at the Member State level. “We are ready to work in partnership with the federal and regional governments to ensure the successful passage of this historic agreement,” says Marcel Claes, Chief Executive of AmCham Belgium. With TTIP, the two trading blocs could once again be in lockstep.
Photo Credits: The Transatlantic Economy 2015, AmCham EU