From Trade Barriers to Economic Gains: Understanding the Contribution of U.S.-EU Relations to EU’s Growth
From Trade Barriers to Economic Gains: Understanding the Contribution of U.S.-EU Relations to EU’s Growth

Summary/Abstract: In the context of globalisation, trade relations between the United States (U.S.) and the European Union (EU) serve as a platform for economic development, which influences the policies and economic cooperation of these two major powers. Our study investigates how the evolution of bilateral trade relations and foreign direct investment (FDI) impacts economic growth in the European Union. By examining the contemporary challenges posed by U.S.-EU trade policies, this paper confirms that regulatory frameworks, mutual agreements, and transnational collaborations can reduce trade barriers and foster a thriving economic development. The dataset used in our econometric model consists of data collected from 2013 to 2023 for all the 27 EU Member States and the U.S. In our model, economic growth is the dependent variable, while the main independent variables are the U.S.-EU trade balance and the foreign direct investment (FDI) from the U.S. to the EU. The results of our research show a strong positive correlation between EU’s economic growth and the U.S.-EU trade balance. This indicates that an increase in the trade balance with the U.S. will significantly contribute to the economic growth of EU’s Member States. Moreover, an increase in FDI from the U.S. would positively impact both the economic growth and the U.S.-EU trade balance in the EU Member States. Our research confirms that international trade is a catalyst for economic development, and that the benefits of U.S.-EU trade relations extend far beyond purely economic metrics. They can be showcased in a holistic approach to regional and global economic advancement. The conclusions of our study offer key insights to academics, researchers and policymakers, considering the current state of EU’s economic development and the United States’ influence on recent geopolitical dynamics.

• Details
• Contents