US and the EU: an economic love affair

Dr Daniel Hamilton, from the Centre for transatlantic relations in Washington, who wrote the study, said, "politically, economically and socially, we are not drifting apart, we are smashing into each other".

Axis of weasels

Despite France and Germany being branded the "axis of weasels" in some American circles for their opposition to the US-led war in Iraq, 2003 was a record year for economic relations between the US and the so-called "motor" of Europe in Paris and Berlin.

The report says: "even though US-German relations ebbed to one of their lowest levels since World War II, American firms sank $7 billion in Germany in 2003, a sharp reversal from 2002, when US firms pulled some $5 billion out of Germany".

US investment flows to France also jumped by ten percent last year despite a general decline in Franco-US relations.

And there was more French investment into the state of Texas than the combined total of US investment into China and Asia.

Overall, notes the study, the transatlantic economy generates roughly $2.5 trillion ($2,500,000,000,000) in total commercial sales per year and employs over 12 million workers.

And despite the talk of the rise of China and Asia in economic relations, US firms have ploughed ten times as much capital into the Netherlands - a relatively small European economy - as into China.

Trade disputes

Furthermore, the report argues that too much emphasis is placed on high-profile trade disputes, such as the one over steel earlier this year. Trade disputes account for only one or two percent of overall trade between the US and the EU, notes Dr Hamilton and trade itself accounts for less than 20 percent of transatlantic commerce.

"Foreign investment, not trade, drives transatlantic commerce", argues the report, adding, "when one adds investment and trade together to get a more complete picture, one sees that US economic engagement remains overwhelmingly focused on Europe".

Hungary is the new Ireland

And Dr Hamilton believes that the enlargement of the EU market with the ten new member states can only be a boost to the EU-US commercial relationship.

US multinationals, says the report, have been particularly focused on three of the ten accession states - Poland, Hungary and the Czech Republic.

Overall, the message of the document is clear - the EU and the US - like an old married couple, should remember that much more unites them than divides them.

"Our mutual stake in each other's prosperity and success has grown dramatically since the end of the Cold War. Ignoring these realities is short-sighted and shortchanges American and European consumers, producers, investors, workers and their families", concludes the study.