Amidst new threats to international trade and rising nationalist sentiment comes a report from the American Chamber of Commerce to the European Union (AmCham) that proves the importance of the US-EU relationship to the vitality of the global economy.
According to the comprehensive report, US-EU trade accounted for $5,2 trillion in trade in 2016, a whopping one-third of the entire global GDP.
“Despite transatlantic political turbulence, the U.S. and Europe remain each other’s most important markets. No other commercial artery in the world is as integrated,” reads the report.
The two markets have only been getting closer since the beginning of the 21st century, and most significantly within the foreign direct investment, portfolio investment, banking claims, trade and affiliate sales in goods and services, mutual R&D investment, patent cooperation, technology flows, digital trade, and sales of knowledge-intensive services.
Brexit is a road bump, not a death knell
Brexit was certainly a surprise to policymakers and business leaders, and its full impact on the US/EU/UK triangle economics will remain a mystery until the two-year negotiations finally come to a full stop.
If the two years allocated by Article 50 is deemed insufficient for a smooth exit of the UK from the EU, policymakers are in their rights to prolong the negotiation period.
Despite the limitations on trade that will result from Brexit, the true value of the transatlantic triangle will be untouched in foreign investments.
“Trade alone is a misleading benchmark of international commerce; mutual investment dwarfs trade and is the real backbone of the transatlantic economy,” reads the report.
The amount of U.S. investment that has poured into Britain since 2015 alone totals $593 billion, the return being $428 billion. The total US FDI in all of Europe is $1,17 trillion.