Transworld Paper No. 35
The evolution of the transatlantic economic relationship has to be considered within the framework of a changing global environment. The bilateral partnership between the United States and the European Union is still dominant both in terms of trade and investment, although it is becoming less relevant in terms of distribution of global GDP. The Transatlantic Trade and Investment Partnership (TTIP), which should be finally signed by early 2015, is the main element of potential convergence between the EU and the US in the near future. However, we envisage two main stumbling blocks. The increasing importance of the Pacific region for the US and the domestic problems the EU is facing in terms of sluggish growth and challenges to deeper economic integration might reduce the EU’s attractiveness as a strategic partner. The role of China, as the third main economic player on the global stage, cannot be neglected. However, it is too early to predict whether China will play along the new regulatory standards that the TTIP will set. For these reasons, the transatlantic economic relationship is still likely to maintain the status of an “enduring partnership”, although uncertainty related to the final outcome of the TTIP and the economic recovery in the EU suggest that it might be heading to a more “functional relationship” scenario.