Eu Us Bilateral Trade Agreements
The EU-US Bilateral Trade Agreements: What You Need to Know
The European Union (EU) is the world`s largest single market, encompassing over 440 million people and generating an estimated 16.5 trillion USD in GDP. The United States (US), on the other hand, is the world`s largest economy, with a GDP of around 21 trillion USD. Given the size and importance of these two economic giants, it is no surprise that trade relations between the two have been a hot topic for many years.
In this article, we will explore the EU-US bilateral trade agreements, their history, and what they mean for businesses and consumers on both sides of the Atlantic.
History of EU-US Trade Relations
The relationship between the EU and the US is one of the most complex and multifaceted in the world. Trade relations between the two date back to the 19th century when the US was a significant trading partner of many European countries. In the post-World War II era, the US became the main supporter of the creation of the European Coal and Steel Community (ECSC), which eventually evolved into the EU.
Since then, trade between the EU and the US has grown significantly. The two parties have a total trade turnover of around 1.3 trillion USD annually, with the US being the EU`s second-largest trading partner, and the EU being the US`s largest trading partner. However, the trade relationship between the two has not always been smooth.
One significant obstacle to trade between the EU and the US has been regulatory barriers. The EU has strict regulations on products such as genetically modified foods, hormone-treated beef, and chlorine-washed chicken, which the US considers unnecessary. The US, on the other hand, has regulatory barriers on products such as foreign cars and beef. These differences in regulations have led to tension between the two parties, making it difficult to reach a comprehensive trade agreement.
EU-US Bilateral Trade Agreements
The EU and the US have attempted to negotiate a comprehensive trade agreement called the Transatlantic Trade and Investment Partnership (TTIP) since 2013. The TTIP aimed to eliminate regulatory barriers and harmonize standards, making it easier for businesses to trade across the Atlantic. However, negotiations were suspended in 2016 due to political opposition, with concerns over the impact of the agreement on various sectors, such as healthcare, agriculture, and the environment.
In the absence of the TTIP, the EU and the US have agreed on several smaller trade deals. In August 2020, the two parties agreed to reduce tariffs on some goods, including US lobsters, and EU chemical and glass products. In December 2020, they agreed to increase duty-free trade in sectors such as wine, spirits, and food, saving businesses an estimated 200 million USD in tariffs annually.
What Does This Mean for Businesses and Consumers?
The EU-US bilateral trade agreements have the potential to benefit businesses and consumers on both sides of the Atlantic. By reducing tariffs and regulatory barriers, businesses will find it easier to trade, and consumers will have access to a wider range of products at lower prices. However, these agreements are not without their challenges.
Critics argue that the agreements may lower regulatory standards, creating a race to the bottom in environmental and health protections. Additionally, smaller businesses may struggle to compete with larger businesses that have the resources to navigate the complex regulations associated with international trade.
In conclusion, the EU-US bilateral trade agreements have the potential to boost trade and economic growth, but they must be approached carefully to ensure that they benefit all parties involved. While negotiations for a comprehensive trade agreement have stalled, smaller agreements may provide a way forward for improved trade relations between the two economic giants.