Prospects for a U.S.-European Trade Deal

Richard N. Swett, FAIA (Ambassador to Denmark, 1998-2001)

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The need for a strong trade relationship between the United States and Europe has never been more important than it is today. It represents a combined market of over 800 million people, most of whom are living in affluent, successful societies that have the ability to purchase products of the highest quality. From Scandinavia south, this is a market that consumes U.S. goods and services in significant quantities, yet there is even greater potential for consumption in the years ahead. 

In Turkey, for example, where the GDP has expanded by over six percent per annum for the past five years despite the global recession, they are in the midst of transforming their energy, transportation and healthcare infrastructure to meet the needs of a prosperous, modern country. The additional energy production will enable the economy to continue to grow at significant rates. The transportation infrastructure will relieve traffic congestion in Istanbul, but more importantly it will increase the economic churn throughout the country by bringing businesses closer to each other and their markets. It is also a perfect place to utilize the modern, sophisticated technologies and products from the United States.

In healthcare, alone, Turkey will be spending over U.S. $30 billion on replacing tired, old facilities with new, state of the art hospitals that will be dispensing cost effective healthcare to the citizens of Turkey. One project on the drawing boards already is targeting a half billion dollars of U.S. products, equipment and services with financing anticipated to be provided by the U.S. Export-Import Bank. That is a significant percentage of the current U.S. $19 billion in trade between our two countries. Imagine if two or three more projects of this magnitude were to be built in the next five years.

Prime Minister Erdogan has stated that his goal is to continue to grow the Turkish economy (it just became the 15th largest economy in the world) so that it will be in the top ten economies by 2020. That is a juggernaut that the United States wants to have a close working relationship with, not only for the jobs it will create, but for the good political relationship it will engender.

The best way to counterbalance the rising power of the Chinese economy is to broaden our ties with the world’s other major market, Europe. By teaming with Turkey, we not only strengthen our ties with a powerful and influential player in the Middle East, we also facilitate the economic relationship Turkey has with the European Union. Both relationships are crucial to the economic and political stability in the region.

Is there a down side to this equation? Only if the United States approaches it as a one way transaction. That approach is what will cause the Chinese problems in the coming years, where their controlling attitude is wearing thin their welcome in the countries in which they are investing and building infrastructure, resource recovery and food security projects. As long as the United States works as a true partner with Turkey we will realize all of the benefits this association has to offer.

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