TRANSATLANTIC INVESTMENT

Foreign direct investment, not international trade, is the fulcrum of transatlantic commercial relations.

To illustrate: Bilateral trade between the United States and Canada nearly matches aggregate trade flows between the U.S. and the 27-member European Union.  Intra-regional transactions also dominate European trade, accounting for over 70 percent of EU trade turnover. 

By contrast, local sales by the U.S. subsidiaries of EU-based companies surpass parent company exports by a factor of five. The European subsidiaries of American-based companies generate nearly ten times more revenue through local sales than parent companies produce via exports across the Atlantic.

Both European and North American companies increasingly look to foreign direct investment as their primary vehicle for international growth. FDI offers a number of advantages to growth-oriented companies in Europe and North America:

1. •Geographic proximity to target markets
   

2. •Access to skilled foreign labor
   

3. •Responsiveness to market shifts
   

4. •Operational flexibility in sourcing, manufacturing, and distribution
   

5. •Creation of natural hedges to mitigate foreign exchange risk
   

The Global Economics Company is dedicated to advancing the transatlantic investment strategies of European and North American companies. This Web Presentation reports the central findings of GEC’s research on foreign investment in the transatlantic theater.

    Part I     Globalization and Foreign Direct Investment  (3:34)

    Part II    North American Investment in Europe  (6:19)

    Part III   European Investment in North America  (4:25)

    Part IV   International Trade and Foreign Direct Investment  (8:26)

Click the triangles above to access GEC’s audio-narrated Web Presentation, Transatlantic Investment. Click the PDF link on the right to download a printable version of the Web Presentation.