U.S. trade with the European Union Essay Example | Topics and Well Written Essays - 1250 words

U.S. trade with the European Union - Essay Example Mercantilism is referred to as the first reasonable systematic body of thought devoted to international trade. The 20th century marked an era in which international trade boomed across the world. The United States was in the forefront of trade as this nation became the most powerful country in the world after the U.S. successfully won World War II. During that time a lot of European nations became allies of the United States. Trade between the United States and Europe increased substantially during this time. A major event that changed the course of history in Europe was the creation of the European Union and adoption of the Euro currency among member nations. The Euro was created a year before the turn of the century on January 1, 1999. This major event in the economic system of Europe positively impacted trade with the United States. The Euro solidified the economic position of many member nations that had weak currencies prior to the adoption of the Euro. The purpose of this paper is to discuss international trade between the United States and Europe. Importance of trade International trade is composed of the exports and imports a nation has with other countries. Exports can be defined as the amount of goods and services that a country sells to another nation, while imports are the amount of goods and services that a country buys.... The revenues generated from exports increase the amount of wealth of a country. The balance of trade between two nations is calculated by subtracting imports from exports. The desired outcome for a country is to have a positive trade balance with a trade partner. It is beneficial for a country such as the United States to have lots of trade partners. Having lots of trade partners is beneficial because it improves the opportunity of increasing exports and imports. Another good strategy for a country like the United States is to improve relations with another particular country in order to spur economic activity between both nations through the use of international trade. The United States and Europe during the last 14 years have increased their trade activity as a direct consequence of the creation of the European Union. Trade between the United States and Europe The United States and Europe are two of the biggest players in the international community. In the past trade between these two nations was scattered because many European nations had weak currencies and economic systems. All that changed in 1999 when the Euro was adopted as a common currency in Europe. Having a common currency simplified transactions. The table below shows the amount of exports and imports of the United States with Europe since 1997. Year Imports Exports Balance 1997 163272.5 181439.7 -18167.2 1998 170008.4 202873.7 -32865.3 1999 171833.7 224790.2 -52956.5 2000 187448 256766.2 -69318.2 2001 181528.7 253776.8 -72248.1 2002 163626.4 260865.5 -97239.1 2003 173062.6 284596.9 -111534 2004 191789.8 321430.9 -129641 2005 209928.4 355247.6 -145319 2006 242993.6 384007.5 -141014 2007 283068.9 407473.8 -124405 2008 324997.1 435203.4 -110206 2009 258061.6