European Union - Market OverviewEuropean Union - Market Overview
This document is the basic information needed to help companies get started selling in the European Union. Company specific circumstance will likely require additional information.
The United States and the European Union (EU), with its 28 Member States, enjoy a mature economic relationship that is characterized by $5.6 trillion in two-way investment as of 2017[1]. In 2017, Transatlantic trade flows (goods and services trade plus earnings and payments on investments) averaged $5.3 billion each day. U.S. exports of goods and services to the EU-28 in 2017 reached approximately $562 billion and imports from the EU, 679.9 billion[2]. It is estimated that transatlantic commerce generates more than 15 million jobs. U.S. and European foreign affiliates directly employed 8.7 million workers in 2015 which is a four percent increase over 2014[3]. The latest transatlantic economy report uses the same data from 2015 but estimates modest growth in jobs on both sides of the Atlantic in 2016 and 2017.
While the United Kingdom’s plan to depart the European Union provides uncertainty, the remaining 27 EU countries continue to be a strong market for the United States with goods and services exports to the EU 27 in 2015 of $369.3 billion.
The EU winter interim forecast released on 7 February 2019 notes that the EU economy is facing uncertainty related to trade policy and the future of multilateralism, but also due to the uncertainty of the future relationship with the U.K. In addition, the report noted internal industrial production was weaker than expected in 2018, domestic demand softened, while exports underperformed. However, the forecast report predicts that economy is expected to continue to grow, but at a slower pace. The EU area is estimated to have grown 1.5% in 2017, which is 0.4 percent points lower than the estimations made in the 2018 Autumn Forecast. The Euro area performance is set to decrease in 2019 and 2020 with a growth prediction of 1.3% and 1.4% respectively, down from the 2018 Autumn Forecast of 1.9% and 1.7%.
The report notes that the outlook for economic growth in the EU is predicated on the uncertainties noted above, mitigated by expected new policy changes. Euro Area inflation is projected at 1.4% in 2019 and 1.5% in 2020. The report noted that the fundamentals for growth remain, including improving labor market conditions, a slightly expansionary fiscal policy stance, and supportive financial conditions. Energy prices are expected to drive lower inflation.
U.S. business may benefit from the EU’s border-free Schengen area which covers 22 of the 28 EU Member States[4] and eases the movement of goods and people across air, land, and sea borders. Ireland and the U.K. have opted out of the Schengen and it is not certain when Bulgaria, Croatia, Cyprus, and Romania will join.
The transatlantic digital economy is an important pillar in the overall U.S.-EU economic and commercial relationship. With the United States and EU representing the two largest net exporters of digitally deliverable services in the world. Sixty-two percent of U.S. services exports in 2015 – representing $184.2 billion -- were delivered digitally. Over half of digitally delivered services imported to the United States from the EU are used to produce U.S. products for export, and vice-versa.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
The United States and the European Union (EU), with its 28 Member States, enjoy a mature economic relationship that is characterized by $5.6 trillion in two-way investment as of 2017[1]. In 2017, Transatlantic trade flows (goods and services trade plus earnings and payments on investments) averaged $5.3 billion each day. U.S. exports of goods and services to the EU-28 in 2017 reached approximately $562 billion and imports from the EU, 679.9 billion[2]. It is estimated that transatlantic commerce generates more than 15 million jobs. U.S. and European foreign affiliates directly employed 8.7 million workers in 2015 which is a four percent increase over 2014[3]. The latest transatlantic economy report uses the same data from 2015 but estimates modest growth in jobs on both sides of the Atlantic in 2016 and 2017.
While the United Kingdom’s plan to depart the European Union provides uncertainty, the remaining 27 EU countries continue to be a strong market for the United States with goods and services exports to the EU 27 in 2015 of $369.3 billion.
The EU winter interim forecast released on 7 February 2019 notes that the EU economy is facing uncertainty related to trade policy and the future of multilateralism, but also due to the uncertainty of the future relationship with the U.K. In addition, the report noted internal industrial production was weaker than expected in 2018, domestic demand softened, while exports underperformed. However, the forecast report predicts that economy is expected to continue to grow, but at a slower pace. The EU area is estimated to have grown 1.5% in 2017, which is 0.4 percent points lower than the estimations made in the 2018 Autumn Forecast. The Euro area performance is set to decrease in 2019 and 2020 with a growth prediction of 1.3% and 1.4% respectively, down from the 2018 Autumn Forecast of 1.9% and 1.7%.
The report notes that the outlook for economic growth in the EU is predicated on the uncertainties noted above, mitigated by expected new policy changes. Euro Area inflation is projected at 1.4% in 2019 and 1.5% in 2020. The report noted that the fundamentals for growth remain, including improving labor market conditions, a slightly expansionary fiscal policy stance, and supportive financial conditions. Energy prices are expected to drive lower inflation.
U.S. business may benefit from the EU’s border-free Schengen area which covers 22 of the 28 EU Member States[4] and eases the movement of goods and people across air, land, and sea borders. Ireland and the U.K. have opted out of the Schengen and it is not certain when Bulgaria, Croatia, Cyprus, and Romania will join.
The transatlantic digital economy is an important pillar in the overall U.S.-EU economic and commercial relationship. With the United States and EU representing the two largest net exporters of digitally deliverable services in the world. Sixty-two percent of U.S. services exports in 2015 – representing $184.2 billion -- were delivered digitally. Over half of digitally delivered services imported to the United States from the EU are used to produce U.S. products for export, and vice-versa.
[1] USTR Trade Report 2019
[2] USTR Trade Report 2019
[3] The Transatlantic Economy 2017, Annual Survey of Jobs, Trade and Investment between the U.S. and Europe; Daniel Hamilton and Joseph Quinlan and EuroData February 13, 2019
[4] Twenty-two EU Member States and four European Free Trade Association (EFTA) Member States participate in the Schengen Area. Of the six EU members which do not form part of the Schengen Area three – Bulgaria, Croatia, Cyprus and Romania – are legally obliged to join the area, while the other two – Ireland and the United Kingdom – maintain opt-outs. Four non-EU members – Iceland, Liechtenstein, Norway, and Switzerland – participate in the Schengen Area.