November 2011
Transatlantic Job Creation
“Trade is an engine for Jobs are the lifeblood of the modern economy, creat-
Transatlantic Foreign Affiliates:
global growth. It contributes ing income that is spent at businesses, saved in banks,
and gathered as tax revenue. Without jobs, growth An Impact Assessment
to long-term jobs in the EU
grinds to a halt, economic confidence falters, and the “Most American foreign affiliates in Europe are in-
and around the world.”
economy contracts—bad news for all concerned. distinguishable from local German, British, or Dutch
firms, while European affiliates operating in the Unit-
EU Trade Commissioner The recession has taken a comparable toll on employ- ed States are barely distinguishable to U.S. consumers
Karel De Gucht ment on both the United States and the European who enjoy European goods and services on a daily
Union. Yet, in spite of the economic downturn, the basis without much thought. Ubiquitous brands such
size and interconnected nature of the transatlantic as Trader Joe’s, Jenny Craig, Sunglass Hut, Lenscraft-
economic relationship continues to create and sustain ers, AC Nielsen, Glidden Paint, Skippy Peanut Butter,
jobs—close to 15 million of them, divided more or less and Budweiser beer—all are as American as apple pie
equally between the EU and the U.S. These jobs result and all are European-owned companies.
from transatlantic trade in goods and services, foreign Moreover, these affiliates invest in local communities.
investment, and the activities of foreign affiliates in European affiliates in the United States employ mil-
each other’s economies. lions of American workers and are the largest source
Jobs and Transatlantic Trade. Trade in goods and of onshored jobs in America.”
services leads to economic growth and spawns jobs. Dan Hamilton and Joseph Quinlan, “The Transatlantic
The EU and the United States are one another’s main Economy 2011,” SAIS Center for Transatlantic Relations
at Johns Hopkins University
trading partners, together accounting for about one-
third of global trade and half of global GDP. In 2010,
one based solely on trade. The transatlantic economy
the EU continued to be the top destination for U.S.
epitomizes this type of economic integration.”
merchandise exports, and ranked second only af-
ter China as a source of U.S. imports. Likewise, the The EU and the U.S. count more than $3 trillion in
United States was the top destination for EU exports mutual investment stocks between them. Total U.S.
of goods in 2010 and ranked second after China as a investment in the EU is more than triple what the U.S.
source of EU imports. The most recent figures indicate invests in all of Asia, and EU investment in the U.S.
that trade in goods between the transatlantic partners is more than eight times what the EU invests in both
is on the rise in 2011. India and China.
inside Jobs and Foreign Direct Investment. However, trade
alone is not responsible for the highly integrated na-
Jobs and Foreign Affiliates. Increasingly, industrial-
ized economies deliver goods and services through
ture of the EU-U.S. economic relationship. The unri- foreign affiliates and subsidiaries rather than through
2 Keeping Transatlantic valed amount of two-way foreign direct investment exports, and establishing a corporate presence abroad
Commerce Moving, and affiliate activities are at the core of this connection creates both direct and indirect jobs in the host country.
Business Booming, and contribute to growth and jobs on both sides of
the Atlantic. For example, in Spartanburg, South Carolina, Ger-
and Jobs Blooming man automaker BMW invested $5 billion in its first
Transatlantic scholars consistently emphasize that full manufacturing facility outside of Germany, creat-
3 Creating Jobs foreign investment is the tie that binds together the ing more than 7,000 jobs. Swedish retailer Ikea has not
at Home: the EU Strategy U.S. and EU economies. According to Dan Hamilton only established nearly 40 stores in the United States,
and Joseph Quinlan of Johns Hopkins University, “a but it has also opened its first U.S. furniture manu-
4 Help for Redundant, relationship that rests on the foundation of foreign in- facturing factory in Danville, Virginia, bringing hun-
Unemployed, or vestment is one in which both parties are extensively dreds of jobs to the region. The U.S.-based research,
Underemployed Workers embedded and entrenched in each other’s economies. manufacturing, and distribution operations of French
in the European Union Such a relationship is more job-creating, income-pro- pharmaceutical company Sanofi-Aventis are respon-
ducing, and wealth-generating for both partners than sible for 11,400 jobs in the United States.
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Keeping Transatlantic
Commerce Moving, Business
Booming, and Jobs Blooming
“The direct [air] connection Removing Regulatory Barriers: the Transatlantic rights, and secure trade, to electric vehicles, energy
between Memphis and Economic Council. With such a high level of transat- efficiency, and financial markets. It is advised by rep-
Amsterdam has a $120 million lantic economic integration, tariffs—which average 2 resentatives of transatlantic dialogues representing
impact on Tennessee’s economy to 3 percent—are no longer the major barrier to trade business, legislators, and consumers.
between the U.S. and the EU. Instead, regulatory dif-
and supports more than 2,200 One such group, the Transatlantic Business Dialogue,
ferences represent one of the most serious obstacles to
local jobs. American Airlines EU-U.S. commerce.
brings corporate leaders from the EU and U.S. togeth-
now flies direct to Madrid, a er to help establish a barrier-free transatlantic market
connection that has a $100 In 2007, the EU and the U.S. established the Trans- which will serve as a catalyst for global trade liberal-
million annual impact on atlantic Economic Council—the TEC—to advance ization and prosperity. Unified markets are needed to
transatlantic economic integration by bringing to- create a business environment conducive to innova-
the Dallas-Forth Worth
gether governments, the business community, and tion, economic growth, increased investment, and job
economy. Now before Open consumers to work on key areas where greater regula- creation.
Skies Agreements, these routes tory convergence and understanding can foster eco-
simply did not exist….these Unleashing Transatlantic Aviation: Open Skies. The
nomic growth and jobs on both sides of the Atlantic.
agreements may not create airline industry is vital to the global economy, gener-
Multinational firms collectively spend billions to run
ating $3.5 trillion in economic activity annually and
headlines, but they do create parallel supply lines to tailor products to both Euro-
creating jobs for 32 million people. Together, the EU
jobs.” pean and American specifications.
and U.S. aviation markets represent around 60 percent
U.S. Secretary of State Transatlantic regulatory convergence involves devel- of global aviation.
Hillary Rodham Clinton oping common standards for, or at least common rec-
A landmark two-stage EU-U.S. air transport agree-
ognition of, legal requirements, testing and certifica-
ment, known as Open Skies, has ushered in unprec-
tion procedures, and enforcement mechanisms.
edented liberalization of the EU-U.S. airline market by
As EU Trade Commissioner Karel De Gucht ex- removing restrictions on routes, prices, and number
plains, “There are compelling reasons to engage in of flights.
this regulatory cooperation. Studies have shown that
Stage one of the accord, launched in 2008, triggered
an increase in services in previously restricted parts of
the transatlantic market. In 2010, the second stage of
the agreement expanded the benefits of the agreement
to include additional investment and market access
opportunities. Both stages of Open Skies strengthen
the cooperative framework in regulatory areas such as
safety, security, and the environment. Estimates of the
potential benefits from removing regulatory obstacles
to the EU-U.S. transatlantic aviation market include
up to 80,000 new jobs.
Investing in the Future: Green Collar Jobs. Overall,
foreign investment is directly responsible for more
than five million American jobs, including two mil-
lion in manufacturing; the bulk of these jobs come
from European investment, including affiliate opera-
tions.
Green collar jobs—those involved with renewable
energy technologies—are expanding, particularly in
places like Colorado, which now boasts nearly 20,000
renewable energy and research jobs, making it a na-
we can generate impressive savings—more than 200
tional leader in new energy employment.
billion dollars—by reducing non-tariff measures and
by aligning regulatory divergences. And even if we Danish company Vestas, a global leader in the produc-
only tackle a number of specific areas, the gains are tion of high-tech wind power systems, has invested
huge because of the sheer size of transatlantic trade. over $1 billion at its various wind turbine production
So, the formula of the TEC is to tackle regulatory is- plants throughout Colorado and directly created more
sues at an early stage, before the actual regulation is than 2,400 jobs, including more than 1,000 highly
in place,” resulting in cost savings for both producers skilled manufacturing positions.
and consumers.
Iberdrola Renewables, Inc., the U.S. division of Spain’s
The TEC provides a high-level forum to address com- number one energy group, Iberdrola, S.A., is already
plex topics ranging from chemicals, intellectual property helping to generate power from more than 40 renewable
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supporting jobs in industries and communities across
the country.
German-owned Siemens AG is a $19.9 billion compa-
ny that provides a broad range of products and servic-
es and employs 60,000 people in nearly 800 locations
throughout the U.S. Siemens Energy, a subsidiary, has
made a remarkable difference in the American towns
where it has set up wind power manufacturing facili-
ties.
In 2008, Siemens helped energize a community with
a high unemployment rate by creating more than 300
jobs when it began construction in 2008 on Windy
Flats in Washington state, one of the largest wind
farms in the U.S. Two years later, the company created
approximately 400 green collar jobs when it opened a
plant to manufacture wind turbine parts in Hutchin-
son, Kansas, which had witnessed a steady flight of
industry from the region.
American companies also create jobs in the EU. For
energy projects for customers in the U.S. The com- example, General Electric’s GE Wind Energy has pro-
pany directly employs more than 850 people in the duction facilities in Germany and Spain and employs
United States, and has created thousands of additional 980 at its Salzbergen, Germany headquarters alone.
Creating Jobs at Home:
the EU Strategy
To create sustainable growth and jobs in its 27 Mem- According to the Europe 2020 strategy, by 2020: “The Europe 2020 strategy is
ber States, the EU promotes a knowledge-based soci- built around the ambitious
n 75 percent of the EU population between the ages
ety underpinned by innovation within businesses and goal of inclusive, sustainable,
of 20 and 64 should be employed.
investment in people. and smart growth, based on
n 3 percent of the EU’s GDP should be invested in social fairness, environmental
Europe 2020 is the EU’s strategy to emerge stronger
research and development. protection, and investment in
from the economic and financial crisis and prepare
the EU economy for the next decade. It identifies n Previously established targets for reduced green- technological advancement.”
three key drivers for growth—smart growth (foster- house gases, increased renewable energy produc-
László Andor, EU Commissioner
ing knowledge, innovation, and digital society), sus- tion, and improved energy efficiency should be met. responsible for Employment,
tainable growth (making EU production greener and Social Affairs, and Inclusion
more resource-efficient while boosting competitive- n The share of school drop-outs should be below 10
ness), and inclusive growth (enhancing labor market percent and at least 40 percent of the population be-
participation, skills acquisition, and the fight against tween 30 and 34 should have a degree or diploma.
poverty). n 20 million fewer people should be living below the
poverty line.
The EU’s €7 Billion Boost for Research and Innovation
In July 2011, the EU launched a €7 billion ($9.3 billion) call for proposals “Competition for this money
for research on today’s most challenging problems, ranging from climate will raise standards across the
change to energy to food security to aging populations. Funded by the board and bring the best talent
EU’s 7th Framework Program for Research and Technological Develop- in Europe and beyond together to
ment, projects will focus on bridging the gap between research and the work on everything from curing
marketplace and demonstrating that new technologies have commercial cancer to electric cars.”
potential or can work on a large enough scale to be industrially viable.
The funding is expected to create an estimated 174,000 jobs in the short Máire Geoghegan-Quinn,
term, and nearly half a million jobs and an increase in GDP of nearly €80 EU Commissioner for Research,
billion ($106 billion) over the next 15 years. Innovation, and Science
3
Help for Redundant,
Unemployed, or Underemployed
Workers in the European Union
Because stronger growth requires a shift of resources EU’s member countries and regions, focusing partic-
toward the best-performing sectors, some sectors may ularly on areas where economic development is less
On the Web
experience job losses. The EU equips its citizens to advanced.
n Trade and Jobs adapt to such changes through funding including its
http://ec.europa.eu/trade/ The European Social Fund will distribute €75 billion
Globalization Adjustment Fund and European Social
trade-growth-and-jobs ($99.4 billion) to EU Member States and regions be-
Fund.
tween 2007 and 2013.
n Europe 2020
http://ec.europa.eu/
europe2020
n European Employment
Strategy
http://ec.europa.eu/social/
main.jsp?catId=101
n The Transatlantic Economy
Series: SAIS Center for
Transatlantic Relations, Johns
Hopkins University
http://transatlantic.sais-jhu.edu/
transatlantic-topics/transatlantic-
economy-series.htm
European Globalization Adjustment Fund. The EU
aids workers who have lost their jobs as a result of glo-
balization through its €500 million ($662.9 million) a
year European Globalization Adjustment Fund which
aims to help “redundant workers” find new jobs as
quickly as possible. Key elements include:
n Job-search assistance and occupational guidance;
tailor-made training, re-training, and certification
EU Focus is published bi-monthly programs; outplacement assistance and entrepre-
by the Delegation of the European
Union to the United States.
neurship promotion; and aid for self-employment.
Silvia Kofler n Limited-time allowances for expenses related to
Head of Press finding a job or participating in educational or
& Public Diplomacy training programs.
Editor-in-Chief
European Social Fund. The European Social Fund
Stacy Hope
promotes employment and anticipates and manages
Editor
occupational changes in order to better equip Mem-
Melinda Stevenson ber States, their citizens, and their companies to face
Writer/Assistant Editor new, global challenges. Funding is spread through the
ISSN: 1830-5067
Catalogue No.: IQ-AA-11-06-EN-C
Delegation of the European Union
Foreign Direct Investment, 2010
to the United States Historical-Cost Basis
2175 K Street, NW
Washington, DC 20037 U.S. investment in the EU27: $1.95 trillion
202.862.9500
EU27 investment in the U.S.: $1.48 trillion
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