US-European economic relationship central to world economy
Thursday, 31 December 2009
Merle David Kellerhals Jr.
Direct investment in Ireland by the United States last year totalled $146 billion, which was more than double the total US investment in Russia, India and China combined, at $71 billion, Under Secretary of State Robert Hormats says, illustrating the importance and depth of the trans-Atlantic economy.
"The US-European economic relationship is one of the central drivers of the world economy," Hormats said in Senate testimony early this month. "To put it in perspective, the value of US goods and services exports to the [European Union] is over five times the value of our exports to China," even though economic ties with China have garnered significant attention from Washington in recent months.
Hormats, who is under secretary of state for economic, energy and agricultural affairs, testified before the US Senate Foreign Relations Subcommittee on European Affairs, which was examining efforts to strengthen the trans-Atlantic economy as Western nations move from recession to recovery and growth.
Understanding the potential for boosting America's international competitiveness and creating a stronger domestic jobs base are central to the economic relationship with Europe. Enhancing trade with Europe is one component, and attracting more foreign investment - which can produce high-quality jobs and bring new technologies - is another component, Hormats said. Enhanced technologies are one of the factors that have helped transform aging plants and equipment to the realities of the global economy and the competition it generates.
"Europe is the most important foreign source of jobs in America," Hormats testified. "In fact, the majority of foreigners working for European-owned companies outside of the EU are Americans."
Frances Burwell, a vice president with the Atlantic Council, a Washington-based policy research center, told senators that the trans-Atlantic economy - the combined market of the United States and the European Union (EU) - is "the core of the global economic system," comprising 54 per cent of global gross domestic product (GDP), which is the combined value of goods and services produced in the world.
"Their markets represent mature, service-oriented economies that have been the major engines for innovation in both markets and technology for the last few decades," Burwell said. "Because of the size and attractiveness of their markets, the United States and the EU, along with its member states, play a major role in shaping global standards and regulations."
Hormats told the senators that because of the importance of European trade and investment in supporting high-quality jobs in the United States, making further efforts to remove barriers to commerce between the United States and Europe is vital, and that is true for both sides of the Atlantic Ocean.
The first concern is for enhanced trade liberalisation, he said. The United States and EU enjoy relatively open markets, but other markets also need to become more open, and the most efficient way to achieve that is through the World Trade Organisation (WTO). A new cycle of trade liberalisation has been the long-sought goal of most nations since it was first offered at a WTO conference in November 2001 in Doha, Qatar. Its essential objective is the lowering of trade barriers worldwide, but talks have repeatedly stalled.
"We need the Europeans to help us promote an ambitious, balanced conclusion to the WTO [trade] talks," he said.
The United States also wants to work with the EU in devising a new global financial regulatory system, promoting effective development assistance, improving supply-chain security through the World Customs Organisation, and finding common ground on climate change measures, Hormats said.
Hormats also told senators that even as the United States and the EU work closely in strengthening their economic relationship, they must also promote market-based, rules-based approaches to economic policy in other countries, including in particular Russia, China, Brazil and India.
A feature by the US Department of State's Bureau of International Information Programs. Courtesy: The US Embassy in Dhaka
Direct investment in Ireland by the United States last year totalled $146 billion, which was more than double the total US investment in Russia, India and China combined, at $71 billion, Under Secretary of State Robert Hormats says, illustrating the importance and depth of the trans-Atlantic economy.
"The US-European economic relationship is one of the central drivers of the world economy," Hormats said in Senate testimony early this month. "To put it in perspective, the value of US goods and services exports to the [European Union] is over five times the value of our exports to China," even though economic ties with China have garnered significant attention from Washington in recent months.
Hormats, who is under secretary of state for economic, energy and agricultural affairs, testified before the US Senate Foreign Relations Subcommittee on European Affairs, which was examining efforts to strengthen the trans-Atlantic economy as Western nations move from recession to recovery and growth.
Understanding the potential for boosting America's international competitiveness and creating a stronger domestic jobs base are central to the economic relationship with Europe. Enhancing trade with Europe is one component, and attracting more foreign investment - which can produce high-quality jobs and bring new technologies - is another component, Hormats said. Enhanced technologies are one of the factors that have helped transform aging plants and equipment to the realities of the global economy and the competition it generates.
"Europe is the most important foreign source of jobs in America," Hormats testified. "In fact, the majority of foreigners working for European-owned companies outside of the EU are Americans."
Frances Burwell, a vice president with the Atlantic Council, a Washington-based policy research center, told senators that the trans-Atlantic economy - the combined market of the United States and the European Union (EU) - is "the core of the global economic system," comprising 54 per cent of global gross domestic product (GDP), which is the combined value of goods and services produced in the world.
"Their markets represent mature, service-oriented economies that have been the major engines for innovation in both markets and technology for the last few decades," Burwell said. "Because of the size and attractiveness of their markets, the United States and the EU, along with its member states, play a major role in shaping global standards and regulations."
Hormats told the senators that because of the importance of European trade and investment in supporting high-quality jobs in the United States, making further efforts to remove barriers to commerce between the United States and Europe is vital, and that is true for both sides of the Atlantic Ocean.
The first concern is for enhanced trade liberalisation, he said. The United States and EU enjoy relatively open markets, but other markets also need to become more open, and the most efficient way to achieve that is through the World Trade Organisation (WTO). A new cycle of trade liberalisation has been the long-sought goal of most nations since it was first offered at a WTO conference in November 2001 in Doha, Qatar. Its essential objective is the lowering of trade barriers worldwide, but talks have repeatedly stalled.
"We need the Europeans to help us promote an ambitious, balanced conclusion to the WTO [trade] talks," he said.
The United States also wants to work with the EU in devising a new global financial regulatory system, promoting effective development assistance, improving supply-chain security through the World Customs Organisation, and finding common ground on climate change measures, Hormats said.
Hormats also told senators that even as the United States and the EU work closely in strengthening their economic relationship, they must also promote market-based, rules-based approaches to economic policy in other countries, including in particular Russia, China, Brazil and India.
A feature by the US Department of State's Bureau of International Information Programs. Courtesy: The US Embassy in Dhaka