Trade Agreements between US and European Union
On 6th June, member states of the European Union gave the green light to the commission to begin talks with the United States on investment and trading activities. At the end of the negotiations, this is expected to become the largest bilateral trade agreement ever negotiated in the world. This is considering the fact that the European Union and the United States are considered to posses the toughest economic muscles. The agreement is echoed to contribute to about 0.5% more of the annual economic output of the European Union.
Since talks on the possibility of the formation of trade agreements between the US and the European Union are still underway, it may not be easier to make any concrete conclusions. However, we can only paint a trade picture for the two economic powerhouses that can be relied upon in developing a better understanding of what the result of the trade agreement can be.
Below are some points to help paint a trade picture for the US and the European Union.
- The total United States’ investment in the EU is thrice higher than in the whole of Asia
- European Union investments in the United States are almost eight times the amount that the EU has invested in China and India when combined.
- The United States and the European Union investments are the actual forces behind the transatlantic relationship, making contributions to economic growth and job creations on both sides of the Atlantic. It is believed that almost one third of the trade that is conducted across the Atlantic involves intra-company transfers.
- The transatlantic relationship plays a crucial role in determining the world economy at large. There is no doubt that the largest investment and trade partner for almost all other countries in the global economy is either the United States or the European Union.
- The economies of the US and the EU when combined account for almost half of the GDP of the entire world and also about a third of the global trade flows.
According to analysts, the key to unlocking the potentiality of trade agreements between the EU and US is tackling non-tariff barriers. This is because there are very low average tariffs of less than 3%. The non-tariff barriers can be handled by looking into regulatory restrictions behind the borders and customs procedures.
As at May 2014, the talks on trade agreements between the US and EU are still underway. If the deal is finalized, it is expected to bring down all the trade barriers that exit between the world’s biggest economies. Currently, the trade between them is valued at around 455 billion Euros annually. The agreements will offer a strong boost to the economies on the two sides of the Atlantic, thereby enhancing the annual GDP. It is not clear how long the negotiations will take but trade agreements of similar kind have in the past dragged for years.
At Premium Essays, we guarantee you authentic academic papers of the highest quality. We can help you with papers for all niches and levels of study at any time that you have an assignment. We are committed to ensuring that you are able to easily achieve academic excellence.