Contrary to popular belief, the world's largest organism is not the blue whale but an aspen colony near Fish Lake. Now, try to guess the world's largest economic relationship. If you said the U.S. and China, you fell for the blue whale again.
In reality, the economic ties between the United states and the European Union are like that aspen: largely out of sight, profoundly interconnected, and really, really big.
According to data from Dan Hamilton and Joseph Quinlan of the Center for Transatlantic Relations, new U.S. foreign direct investment in Europe was $206 billion in 2012. From 2000-2012, U.S. investment in Ireland was six times its investment in China. The U.S. invested over $100 billion more in the Netherlands in the same period than in Latin America, the Middle East and Africa combined.
Meanwhile, U.S./EU goods trade totaled $650 billion last year, and Europe accounted for more than 50 percent of American services sales.
Utah's goods exports to Europe have doubled in the past five years and now are above $8 billion; European investment in Utah accounted for at least 16,000 jobs. But if Utah is to sustain that impressive trajectory, we will need to show strengths in a wider variety of sectors. The state has spent heavily on transportation in recent years, but have we funded education at the levels that will boost our citizens' abilities to compete for these jobs and expand into new sectors?
On questions like these, government and business need to work together. Over the next two days, the Utah Governor's Office of Economic Development will host executives from dozens of firms to discuss doing business in and with Europe. Also in attendance will be consular and trade officials from nearly a dozen EU member countries and the EU itself.
The meeting today and Thursday could not be more timely. While the Eurozone crisis has quieted down for now, both the United States and Europe are growing too slowly and failing to create jobs on the scale needed. Working behind the scenes, U.S. and European officials have paved the way for negotiations on a Transatlantic Trade and Investment Partnership.
TTIP's promise is real. Because we already trade so much with one another, eliminating the few remaining tariffs could generate up to 17 percent more exports, roughly five times the bump from the U.S.-South Korea agreement. By liberalizing the trade in services by far, the largest part of both economies we could create millions more jobs.
With Europe, we can and should aim high. One barrier to trade and investment deals is the worry that poorly paid foreign workers will undercut wages of American workers. Such concerns are heightened by stories of "slave labor" conditions behind the deaths of 700 Bangladeshi factory workers. By contrast, European workers are well-paid.
The foreign direct investment trends are similar. Foreign-headquartered firms in the U.S. account for far more R&D and exports than do comparable jobs in firms headquartered in this country, and they pay, on average, about 25 percent more in salary and benefits.
But there are pitfalls, and we can't afford overconfidence that the Transatlantic Trade and Investment Partnership will pass. Our recent discussions with Washington policymakers have raised a host of potential delays.
Industry has been slow to develop compromises, and important disagreements remain. For example, must we slog through non-tariff barriers sector by sector? Can't negotiators simply say, "if a car is safe in Europe, it is safe in the U.S."? We already do this with airplanes. Is it really necessary to trash those poor crash-test dummies twice once for each side of the Atlantic? Recognizing each other's safety standards might cut 7 percent off the sticker price of each car and truck.
Then there is political leadership. President Obama mentioned the trade and investment partnership prominently in his 2013 State of the Union, correctly noting "trade that is free and fair across the Atlantic supports millions of good-paying American jobs."
But will the White House stay focused? Vice presidents play key roles keeping trade negotiations which require top-level political muscle on track. Dick Cheney didn't relish this role. Will Joe Biden?
The stakes are high and the barriers real, but the Transatlantic Trade and Investment Partnership could stimulate the U.S. and European economies now without adding to government spending. Utah investors and officials should bear this promise in mind during this week's meetings.
Wade Jacoby directs the Center for the Study of Europe at Brigham Young University. Taylor Jacoby holds bachelors degrees in economics and political science from BYU and recently completed an internship with the U.S. Treasury.