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JSPES, Vol. 30, No. 2 (Summer 2005 )

An Evaluation of the United States-European Union Bilateral Trade Relations

M. Faizul Islam

This paper examines the U.S.-EU bilateral trade relations and finds that the U.S. current account with the EU has deteriorated in the last decade, primarily because of a disproportionate worsening in its merchandize trade. Based on SITC-3 classification, the U.S. had a trade deficit in nine out of ten commodities in 2003. Bilateral investment had declined after 2000. The EU has 10 offensive and 4 defensive cases against the U.S. at the WTO. Despite a weak dollar, the U.S. merchandize trade deficit has continued to worsen with the eurozone.

Key Words: Current account deficit; World Trade Organization; Anti-dumping; Countervailing duties; Twin deficits.