With a combined population slightly over 818 million or about 12% of the world’s population, the two partners produce around 50 percent of the world’s GDP. Combined with bilateral trade flows in goods and services that account for 40% of the world total, the magnitude of transatlantic economic transactions means that the two sides have significant influence and leadership responsibilities in the world economy. Agreement and cooperation between the two partners in
the past has been critical to making the global trading system more open and efficient.
The high degree of transatlantic economic interdependence, however, carries some downside risks, as demonstrated by the 2008 financial crisis, which started in the United States and was then transmitted to Europe. As the U.S. economy is now recovering from the deep recession, EU members Greece, Ireland, Portugal, and Spain are struggling to address sovereign debt crises which are slowing Europe’s economic growth and recovery. With a significant stake in European economic growth, there is a concern that U.S. exports may be adversely affected at a time when the Obama Administration hopes to double US. exports by 2015.3
Given the magnitude of commercial interaction, trade disputes are not unexpected. Policymakers tend to maintain that the United States and the EU always have more in common than in dispute, and like to point out that trade disputes usually affect a small fraction (often estimated at 1-2 percent) of trade in goods and services. Both sides have been working to resolve some of the biggest disputes for years. These include a dispute between the aerospace manufacturers, Airbus and Boeing, and conflicts over bio-engineered food products and protection of geographical
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