and the U.S. are therefore substantially greater than trade levels. The importance of the EU-U.S. investment relationship is similarly demonstrated by the level of FDI stocks, with each of the two sides being the other's largest investor. By 2001, cross investment stocks between the EU and the U.S. reached (on a historical cost basis) €1500 billion by far the largest investment relationship in the world. EU investment in the U.S., on a historical-cost basis, reached €870 billion, and the U.S. investment position in the EU grew to €628 billion6. Therefore the U.S. is by far the largest investor in the EU (accounting for 62% of total EU liabilities), while the EU is by far the biggest investor in the U.S. (accounting for 61% of total U.S. FDI stock by 2001). At the same time the bulk (46%) of U.S. investment assets abroad is located in the EU, and 50% of EU FDI stock is located in the U.S. Bilateral direct investment stocks have also been growing very quickly over the past decade, almost tripling between 1997 and 2001. Therefore EU and U.S. firms have never been as exposed to each other economies as in the first decade of the 21st century. When FDI and trade figures are considered together, one sees that U.S. and EU economic engagement remains overwhelmingly focused on each other. Foreign affiliate sales are the primary means by which U.S. and EU companies deliver products to each other’s market. Europe is the by and large the most important region in the world for corporate America7.

The amount of U.S. FDI assets in the UK alone is larger than U.S. overseas assets in Asia, Africa and the Middle East combined. And during the 1990s U.S. investment in the United Kingdom (US$175 billion) was nearly 50% larger than the total invested in the entire Asia- Pacific region. In the 1990s U.S. FDI flows into the Netherlands (US$65.7 billion) were twice as much US FDI into Mexico (US$34.1 billion).The total output of US foreign affiliates in Europe (US$ 333 billion in 2000) and of European affiliates in the U.S. (US$ 301 billion) is greater than the total gross domestic output of most nations.

With affiliate sales of US$1.4 trillion, Europe accounted for more than half of U.S. foreign affiliate sales in 2000, more than double comparable figures for the entire Asia/Pacific region.
As a comparison U.S. affiliate sales in China in 2000 totalled US$ 32 billion - roughly equal to U.S. affiliate sales in Sweden, less than one-tenth of those in Germany (US$236 billion) and about one-fourth of those in France (US$137.5 billion). In 2001 and throughout the 1990s, Europe accounted for half of total global U.S. foreign affiliate income.

Similarly, affiliate sales, represent the primary means by which European firms deliver goods and services to U.S. consumers. In 2000, the value of European affiliate sales in the U.S. ($1.4 trillion) was over four times larger than the value of U.S. imports from Europe. For many European multinationals the U.S. is the most important market in the world in terms of earnings. U.S. affiliate income of European affiliates rose more than five-fold in the 1990's to nearly US$26 billion. U.S. affiliate firms in Europe directly employed 4.1 million workers in 2000, of which 1.9 million were employed in manufacture. Adding indirect employment, close to 6 million European jobs are supported by U.S. investment in Europe. European affiliates employed roughly 4.4 million American workers in 2000. If one adds indirect employment, about 7 million Americans have a job due to European investors, who on average pay higher wages and provide greater benefits than domestic U.S. employers. Out of the 6.4 million U.S. workers on the payrolls of foreign affiliates in 2000, European firms

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5 Source: Eurostat and DoC BEA.
6 Eurostat.
7 These examples come from “The primacy of the Transatlantic economy”, Center for Transatlantic Relations, 2003.