By Martin Banks - 7th March 2011
There is increasing competition from emerging economies
Dan Hamilton
A new report says the transatlantic economy has "rebounded sharply" from the depressed levels of 2009.
Trade, foreign investment, foreign affiliate income and mergers and acquisition "all enjoyed positive growth rates" and in some cases, record growth, it says.
However, it goes on to warn that though there is "definite" recovery in the transatlantic economy, there "still remains a way to go" before reaching the pre-crisis performance.
The report, by the Washington-based centre for transatlantic relations at John Hopkins University, says that in 2011, global growth is likely to be "three-speed".
It predicts less than two percent growth for Europe and Japan, seven percent for emerging markets, such as Brazil, with the US somewhere in between.
Co-authors Joe Quinlan and Dan Hamilton also believe that the potential for another sovereign default or debt in the eurozone remains a "real risk" in 2011 and would not spare US banks.
The report said, "The transatlantic economy is still huge and is the largest global trade relationship in the world.
"However, there is increasing competition from emerging economies and the transatlantic economy can now be best characterised as predominant rather than pre-eminent.
"The engine of further growth is tied to further integration of services."
According to the university's study, the US and Europe are each other's most important commercial partners when it comes to services trade and investment.
It says that North America was the largest destination for EU services exports (29.6 per cent) and the largest source of EU services imports (36.9 per cent) in the recession year 2009.
It goes on to state that the EU accounted for just over 41 per cent of total US services exports and for 43 per cent of imports in the recession year 2009.
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