2004: European Community Marks Watershed Developments In Governance, Competition And Trade

The year 2004 continues to unfold as a truly watershed year for the European Union. In governance, competition policy and trade there have been significant, - indeed, some would say revolutionary - developments that will affect the business and regulatory climate for years to come, particularly for U.S. companies doing business in Europe.

Perhaps most significantly, on May 1, 2004, European Union grew from fifteen to twenty-five Member States and there by increasing dramatically trading opportunities in an enlarged European common market of over 450 million inhabitants. As has been the case since the European common market was first formed in 1957, the enlarged European Union ? now stretching from Ireland in the West to Crete in the East, from Finland/the Baltic in the North to Malta in the South ? will provide even greater opportunities to do business in a borderless environment that will increase efficiencies and economies of scale.

Such trading opportunities are of particular significance for U.S. firms since the EU enlargement should only serve further to enhance the growing resilience of trans-Atlantic trade. As has long been the case, U.S./European trade is the most significant international trade and investment relationship in the world. According to the AmCham EU (of which Foley & Lardner LLP is a member) this trading relationship accounts for approximately 40% of world economic activity and represents about $2.5 trillion in annual commerce. U.S./EU trade and investment flows equals roughly $1 billion per day.

Despite the headlines suggesting major obstacles to trade and investment, the European/U.S. economic relationship grows dramatically larger and more significant each year. U.S. foreign direct investment, for example, in Europe during 2003 grew dramatically ? 30.5% - over 2002. U.S. exports to the European Union grew almost 5% and, even more impressive, European exports to the United States increased by 8.5%, despite a 20% increase in the value of the euro vs. the dollar. This colossal trade bridge accounts for millions of jobs, whether measured by direct or indirect employment.

The picture is equally dramatic if one focuses on the trade relationships between the United States and the respective members of the European Union. For seventeen of the twenty-five members of the European Union, the United States is the #1 non-European investor. For two ? Crete and Malta - the United States is one of each countries top trading...

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