Europe – Growing Opportunities for US Exporters
The Europe-US trade relationship is the largest in the world, far surpassing the economics of our business with Japan or China. The European Union covers most of Europe, and since January 1, 2007 is made up of 27 countries, with others in line to push the total beyond 30 before 2010. With 450 million consumers and a mix of “old” and “new” economies, the EU is and will remain the major export destination of most Cincinnati exporters. US exports to EU countries doubled between 2003-2006, and the EU’s continuing expansion offers greater business opportunities than ever for US companies.
Romania (22.3 million population) and Bulgaria (7.5 million) are the EU’s newest members. With per capita GDP of about US$10,000 and high single-digit growth rates, both countries are good prospects for US exporters. Pro-American in politics, now NATO members, Bulgaria and Romania have lowered tariffs to modest EU levels, reformed their laws and regulations to EU standards and are benefiting from about US$30 billion in EU-provided structural funds over the next 7 years. The European subsidies mean upgraded airports (Romania is bringing 17 to world standards now), port facilities, roads and other public infrastructure, all representing services and goods tenders for which US companies can compete.
Romania’s economy grew 7.7% in 2006, the 7th straight year of expansion. It has Europe’s fourth largest oil reserves. Its credit is investment grade. The approach of EU membership led to a 75% increase in US exports to Romania, reaching US $12 billion in 2006. About a third the market size of Romania, Bulgaria presents similar promise. Bulgarian imports from the US rose 42% in 2006, totaling $500 million, and the growth rate should increase because of EU accession.
The US Commercial Service rates the top prospects for US exports to this Black Sea region as auto parts, aviation, building products, ICT, power equipment/services, medical supplies, pollution control, tourism infrastructure (e.g., boating), franchising and safety/security/defense items. Trade shows and missions to Romania and Bulgaria sponsored by the US Commercial Service offer easy entrée for US companies wishing to explore these new markets.
Other countries are knocking at the EU’s door. Turkey is the most noted – and controversial, and it will be years before Turkey is admitted, if ever. More certain are the prospects of former Yugoslavia. Slovenia is already a member. Croatia (4.4 million population) is in the accession process, and will probably be admitted between 2009 and 2012. Serbia and Montenegro lag behind, although Serbia intends to join and will have the unique advantage of being the only country outside of the former Soviet Union that has a free trade agreement with Russia, so will be a doubly-advantage trading market when EU membership occurs (within 10 years). During the accession process, countries represent good investment and export targets, as they reform their laws to EU standards, open their markets and otherwise integrate further into the global economy.
For free assistance in accessing the southeastern markets of Europe, contact Marcia Brandstadt, Director of the US Export Assistance Center – Marcia.Brandstadt@mail.doc.gov, or visit www.buyusa.gov (home of the US Commercial Service). Or ask for some gratis peer counseling assistance from a member of the Southern Ohio District Export Council (contact Marcia for this too). Or you can join or seek guidance and networking from the European-American Chamber of Commerce of Greater Cincinnati, Executive Director Anne Cappel, email@example.com.
Joseph J. Dehner – Joe is Chairman of the Southern Ohio District Export Council, President of the European-American Chamber of Commerce of Greater Cincinnati, and leads Frost Brown Todd’s International Services Group. On May 15 he headed a panel at the Washington, D.C. Trade Winds Forum of the US Commercial Service on “EU Accession and its Meaning for US Business”