State of the Transatlantic Economic Partnership

Daniel Andrich © RGIT

Daniel Andrich © RGIT

The U.S. and EU enjoy the world’s largest bilateral trade relationship, which underscores the significance of cooperation between the two, said Daniel Andrich in an interview. For German companies, the close economic partnership with the US is equally important.

What’s the current state of economic relations between the United States and Germany?

The economic partnership continues to grow. Total trade in goods and services between the US and Germany rose from 240 billion U.S. Dollar in 2017 to 252 billion U.S. Dollar in 2018 (according to the Bureau of Economic Analysis). The US also remains an attractive market for German companies. Having invested a total of 474 billion U.S. Dollar by the end of 2018, Germany is the fourth largest foreign direct investor in the United States. German owned affiliates have created almost 780,000 jobs. There are around 5,400 German companies spread throughout the entire United States (German Central Bank). The figures speak for themselves.

What has been the US Administration’s economic policy so far?

The Administration aims first and foremost to support economic growth and job creation. Two key priorities have been tax reform and deregulation, which have been positively received by German companies settled in the American market. Another goal has been the promotion of American energy domestically and abroad. Regarding trade policy, this has been shaped by the use of trade enforcement measures, the renegotiation of existing trade deals and the launch of new ones, and the reduction of trade imbalances. Tariffs have become one of the tools in the overall trade kit, which has led to uncertainty for businesses.

What else is on the political agenda for 2020?

It will be a busy year in Washington. Upcoming Presidential and Congressional elections in November will likely bring the focus away from foreign policy and closer to domestic issues such as the economy, healthcare, and education. An ongoing impeachment process in Congress could affect the ability to take on other issues. Within trade policy, negotiations with China and other trading partners and the ratification of USMCA will remain of high importance.

Looking ahead, where can the US and Europe work together?

Despite some current strains in the bilateral relationship between the US and Europe, ties across the Atlantic remain strong. With a long history of cooperation, the two partners can find common opportunities for collaboration. These could include setting global standards in digitalization, addressing economic challenges posed by China, promoting apprenticeships to help close the skills gap, and finding ways to further expand the transatlantic trade relationship.

Daniel Andrich is the President and CEO of the Representative of German Industry and Trade (RGIT) in Washington, DC. RGIT acts on behalf of the Federation of German Industries (BDI) and the Association of German Chambers of Commerce and Industry (DIHK), is part of the network of German Chambers of Commerce Abroad (AHK) and is supported by the German Federal Ministry for Economic Affairs and Energy (BMWi).