European trade with the United States: The European Union
European trade with the United States
European trade with the United States: Historical Background
European trade with the United States: Protectionism and New Policies
United States Trade with the European Union, 1997-2007
On February 7, 1992, with the signing of the Treaty of Maastricht, the European Union (EU) was formed. Its membership included new members as well as the EEC countries, eventually bringing the membership to twenty-seven. The European Union and the United States represent the largest interdependent trade and investment relationship in the world. The increase in investment in the United States by European companies and by American companies in European countries has done much to stimulate trade between the United States and the European Union. A good portion of the trade between the United States and the European Union stems from imports and exports between parent companies and their affiliates in the other country.
The two trading units, which are basically on the same socioeconomic level, engage in a considerable amount of intraindustry trade. Many similar products are both imported and exported by the two trading partners. The European Union is the United States’ second-largest trading partner in merchandise and goods and its largest trading partner in services. Although since 1993, the United States has imported more goods than it has exported to the European Union, it also has exported more services than it has imported from the European Union.
Although the United States and the European Union enjoy a cooperative trade relationship, disputes continue to arise between the trading partners. Many of these result fromregulations and policies adopted to protect various segments of the members’ domestic economies. Agriculture-related problems remain the biggest area of discord, particularly because of the subsidies granted to farmers or agricultural producers of specific products. The 1994 Uruguay Round of trade talks solved part of the problems created by subsidies. However, export subsidies and market-access quotas remain issues. Other problems that came into prominence after the Uruguay Round include hormone-treated beef and bioengineered foods.
Areospace is another trade area in which the United States and the European Union have argued over subsidies. This dispute has centered on subsidies provided by the United States to Boeing Aircraft and by various European Union nations (France, Spain, the United Kingdom, and Germany) to Airbus Industrie. Each trading partner maintains that the subsidies are necessary for the aircraft manufacturers to remain competitive.
Differing attitudes toward social and environmental protection have also caused trading problems between the United States and the European Union. Domestic health and safety standards often vary widely between the trading partners. The United States tends to apply fewer regulations than does the European Union. In an attempt to be a homogenous single market, the European Union prefers to set standards and legal guidelines to be followed by its members in all areas, but the United States intervenes in production only when health concerns or other problems become apparent. One example of this difference is found in the issue of hormone-treated beef. Although this type of beef is considered safe for human consumption in the United States, it is not welcomed in European Union countries. Bioengineered food crops have also been an issue. The European Union is opposed to importing them because of the lack of proof regarding their long-range safety. However, the United States argues that bioengineering of food products has become a necessity for its farmers to be able to grow crops profitably.
The interdependency of the United States and the European Union has significantly affected the trade relationship between the two political entities, and this relationship is highly influential in the global economy.
