The Transatlantic Economy 2015: Why it Matters to the Carolinas

Transcription

1 The Transatlantic Economy 2015: Why it Matters to the Carolinas Daniel Hamilton, Executive Director Center for Transatlantic Relations Johns Hopkins University SAIS Washington D.C.

2 European Union Foreign Direct Investment Outflows - U.S. and China (Billions of euros) Outflows to China Outflows to the U.S Source: Eurostat. Data as of October 18, 2014.

3 U.S. $ trillions America's Major Commercial Arteries $5.5 Trillion $3.0 Trillion $1.6 Trillion $1.5 Trillion $1.3 Trillion $1.2 Trillion $1.1 Trillion $1.1 Trillion Transatlantic Total Foreign Affiliate Sales Asia/Pacific Total Foreign Affiliate Sales Asia/Pacific Total Trade NAFTA Total Foreign Affiliate Sales NAFTA Total Trade Transatlantic Total Trade Latin America Total Foreign Affiliate Sales Latin America Total Trade Foreign Affiliate Sales: Estimates for Total Trade: Data for goods & services, Source: Bureau of Economic Analysis; Daniel S. Hamilton and Joseph P. Quinlan, The Transatlantic Economy 2015.

4 The Transatlantic Economy vs. The World 80% Share of World Total 70% 70.2% 60% 50% 56.8% 55.2% 40% 30% 20% 34.5% 25.3% 29.2% 18.7% 10% 0% World GDP World Exports World Imports World FDI Inward Stock World FDI Outward Stock World M&A Sales World M&A Purchases Sources: UN, IMF, figures for Based on PPP estimates. 2. Excluding intra-eu, Norway, Switzerland and Iceland trade.

5 U.S. FDI Flows to Europe (% of World Total*) 63% 62% 62.2% 61% 60.8% 60% 59% 58% 57.6% 57% 56% 55% Q2014 *Excluding Caribbean and Other Western Hemisphere Source: Bureau of Economic Analysis Data at of January 2015.

6 U.S. Foreign Direct Investment Outflows to the BRICs vs. Europe 1 Billions of $ BRICs Europe * Source: Bureau of Economic Analysis 1 Europe does not include flows to Russia *Data through 3Q2014. Data annualized for full year estimate.

7

8

9 U.S. $ billions 3,200 3,000 2,800 2,600 Sales of U.S. Affiliates in Europe vs. U.S. Exports to Europe U.S. Foreign Affiliate Sales in Europe Total U.S. Exports to Europe 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1, * *Estimate for sales. Source: Bureau of Economic Analysis. Majority-owned non-bank affiliates data: Majority-owned bank and non-bank affiliates:

10 U.S. $ billions U.S. Earnings from Europe Hitting New Highs (U.S. foreign affiliate income from Europe) * Source: Bureau of Economic Analysis * Data through 3Q2014. Data annualized for full year estimate

11 U.S. $ billions 2,600 2,400 2,200 Sales of European Affiliates in the U.S. vs. U.S. Imports from Europe European Foreign Affiliate Sales in the U.S. Total U.S. Imports from Europe 2,000 1,800 1,600 1,400 1,200 1, * *Estimate for sales Source: Bureau of Economic Analysis Majority-owned non-bank affiliates: Majority-owned bank and non-bank affiliates:

12 U.S. $ billions 750 U.S. - Europe Services Linkages U.S. Affiliates Services Supplied in Europe U.S. Service Exports to Europe * Source: Bureau of Economic Analysis Majority-owned bank and non-bank affiliates. Services Supplied in Europe estimate for 2013.

13 U.S. $ billions Europe - U.S. Services Linkages European Affiliates Services Supplied in the U.S. U.S. Service Imports from Europe * Source: Bureau of Economic Analysis Majority-owned bank and non-bank affiliates. Services Supplied in the U.S. estimate for 2012.

14

15

16

17

18 Related Party Trade, 2013 U.S. Imports: "Related Party Trade," as % of Total U.S. Exports: "Related Party Trade," as % of Total European Union Germany France Ireland Netherlands United Kingdom Source: U.S. Census Bureau.

19 The Carolinas and Europe Jobs Roughly 700,000 jobs are directly or indirectly related to the Carolinas commerce with Europe Investment There is more European investment in North Carolina or South Carolina alone than total U.S. investment in China, Japan and India combined. EU accounts for 69% global investment in North Carolina and 65% in South Carolina 76% global investment in Durham; 70% in Charlotte; 61% in Raleigh 88% global investment in Spartanburg; 71% in Charleston; 56% in Greenville Exports The Carolinas exported goods valued at $14 billion to Europe in Services exports also important, but little good data Top goods exports chemical manufactures from North Carolina Transportation equipment from South Carolina (52% of state exports)

20 North Carolina and Europe Employment European investment in North Carolina directly supported 153,200 jobs in Direct Sources of Investment- Related Employment within North Carolina, 2011 Country Employment Germany 29,000 UK 27,000 Switzerland 20,200 Japan 19,800 Canada 11,800

21 North Carolina and Europe Goods Trade In 2013, Europe purchased $6.4 billion worth of goods from North Carolina. Chemical manufactures account for a quarter of total exports to Europe. North Carolina exported 2.5 times as many goods to Europe as to China in 2014 ($5.2 million vs. $2 million) Country Top European Goods Export Markets, 2013 Exports ($ Millions) Germany 1,000 France 1,000 UK 899 Belgium 800 Netherlands 716

22 TOP 5 European Regions North Carolina Jobs Region Investment-Direct Overall Brussels, Belgium 32,876 95,000 Baden-Württemberg, Germany 15,434 45,000 Paris Île-de-France, France 10,470 30,000 London, England 6,850 26,000 Dublin/Ulster/East Ireland 6,818 26,000

23 TOP 5 European Regions Providing Charlotte Jobs Region Investment-Direct Overall Brussels, Belgium 5,229 15,000 Oxford/Southeast England 3,807 11,000 Baden-Württemberg, Germany 3,474 11,000 Dublin, Ireland 2,943 9,000 Paris Île-de-France, France 2,893 9,000

24 South Carolina and Europe Employment European* investment in South Carolina directly supported 82,600 jobs in Direct Sources of Investment Related Employment within South Carolina, 2012 Country Employment Germany 21,400 France 17,200 Japan 14,500 UK 11,700 Canada 8,900

25 South Carolina and Europe Goods Trade In 2013, Europe purchased $7.4 billion worth of goods from South Carolina. 52% of the state's exports consists of transportation equipment. South Carolina exports 2.2 times as much to Europe as to China in 2013 ($6.8 million vs. $3.2 million). Top European Export Markets, 2013 Country Exports ($ Millions) Germany 3,183 United Kingdom 1,364 Belgium 514 France 404 Netherlands 383

26 TOP 5 European Regions South Carolina Jobs Region Investment-Direct Overall Bavaria, Germany 10,205 31,000 Baden-Württemberg, Germany 8,183 25,000 Paris Île-de-France, France 7,300 22,000 Brussels, Belgium 6,833 21,000 London, England 5,117 15,000

27 TOP 3 European Regions Providing Spartanburg Jobs Region Investment-Direct Overall Bavaria, Germany 8,591 26,000 North Rhine Westphalia, Germany 2,583 8,000 Baden-Württemberg, Germany 1,220 3,000

28 Example BMW By 2016 $7.3 billion investment in Spartanburg SC 8,000 direct jobs; 23,000 additional $16.6 billion per year local economy 40 additional in-state suppliers; 220 nation-wide 70% exported to 140 countries BMW Number One U.S. Auto Exporter by value TTIP $500 million savings by cutting 2.5% U.S. auto import tariff and 10% EU auto import tariff More savings re standards EU standards front bumper lower than US 5-7 % cost reduction every car and truck

29 Why TTIP Matters to the Carolinas Reduce Tariff Barriers Reduce Barriers to Services [Jobs!] Facilitate Investment Flows the Lifeblood of the Transatlantic Economy Reduce Regulatory Friction Reposition Europe/U.S. for New Global Economy Ensure HIGH standards Living Agreement

30 TTIP Geopolitics Transatlantic Mutual Reassurance For Europe Credibility of US Security Commitment For US Outward-Looking Europe Help Restore Luster to Tarnished Western Model Rising Powers Terms of Integration China; Wider Europe; Russia; Brazil; Poorest Countries Stronger or Weaker Rules-Based Order Standard-Makers or Standard-Takers Window is Closing

31

32 U.S. FDI Outflows Excluding Flows to Nonbank Holding Companies, (% of Total) Other* 6.1% Europe Asia and Pacific 22.2% Europe 45.0% Nafta (Canada/Mexico) South America Africa/Middle East Asia and Pacfici Africa/Middle East 4.7% South America 8.6% Other* NAFTA 13.4% *Includes Central America (excluding Mexico) and Other Western Hemisphere Source: Bureau of Economic Analysis; Daniel S. Hamilton and Joseph P. Quinlan, The Transatlantic Economy Data as of January 2015.