AmChamNews - American Chamber of Commerce in the Netherlands

50
US Direct Investment Position Abroad on a Historical-Cost Basis - Billions of US Dollars
tool for alleviating poverty in developing
countries. Moreover, beyond the strictly
economic benefits, FDI may help improve
environmental and social conditions in the
host country by, for example, transferring
“cleaner” technologies and leading to more
socially responsible corporate policies.
Foreign Investments in the United States
1950 to 2010
Foreign investors have maintained substantial
investments in the United States
throughout its history. Up to 1960 the major
emphasis has been on portfolio holdings
of securities rather than direct investments.
By 1960 foreign direct investment in the US
totaled $6.9 billion - double the 1950 amount.
From 1950 through 1965 growth averaged
some $350 million annually. From 1965 to
1970 annual growth accelerated to over $900
million. Foreign direct investment into the
US quadrupled in the 1970s, tripled this sum
in the 1980s and has again almost doubled
in the past decade.
Europe's share of total FDI in the USA has
remained overwhelming over the past 60
years - over 70 percent is Europe-sourced
today. The Netherlands' share of European
investment in the US is about 12 percent.
The country is the third largest investor in
the US after the UK and Japan.
1950 1957 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010p
All Countries 11.78 25.39 32.77 49.32 75.48 124.05 215.37 238.36 430.52 699.01 1,316.24 2,241.65 3,908.23
Europe 1.73 4.15 6.68 13.98 25.25 49.31 96.28 108.66 214.73 344.59 687.32 1,210.67 2,185.89
Netherlands 0.08 0.19 0.28 0.68 1.55 3.09 8.04 7.55 19.12 42.11 115.42 240.20 521.42
% in NL of US
Investment in Europe
4.6% 4.6% 4.2% 4.8% 6.1% 6.2% 8.3% 6.9% 8.9% 12.2% 16.7% 19.8% 23.8%
p = preliminary figures published July 2011
Source: Survey of Current Business published by Bureau of Economic Analysis, US Department of Commerce
The Transatlantic Economy Today - Investment
Driven*
While trade is often seen as the conventional
yardstick for measuring economic interaction
between countries, it is foreign investment
- the deepest form of global integration
- that binds the transatlantic economy
together. Here are some observations on the
transatlantic economic bond between the
United States and Europe.
Despite the recession, the US and Europe
remain each other’s most important markets.
No other commercial artery in the world is
as integrated. The transatlantic economy
generates close to $5 trillion in total commercial
sales a year and employs up to 15 million
workers in mutually “onshored” jobs on
both sides of the Atlantic. The transatlantic
economy is the largest and wealthiest market
in the world: 54% of world GDP in terms of
value and 40% in terms of purchasing power.
As globalization proceeds and emerging
markets rise, however, transatlantic markets
are shifting from a position of preeminence to
one of predominance - still considerable, but
less overwhelming than in the past. Between
2000 and 2010 US firms sunk roughly $1.3
trillion into Europe - over 60% of total US
FDI for the entire decade. Europe’s share
of total US FDI in 2010 was roughly 52%.
Over the past decade 5 of the top 10 US FDI
markets were European:
1. NL
7. Germany
2. UK
8. Singapore
3. Canada 9. Australia
4. Ireland 10. Japan
5. Switzerland 11. Belgium
6. Mexico 15. Spain
US investment in the NL 2000-2010 was 9
times more than in China. US investment in
the UK was over 7 times more and in Ireland
nearly 3 times more.
Since 2000 US firms have invested more in the
Netherlands alone than in South and Central
America, the Middle East and Africa combined.
Roughly 60% of US assets were located in
Europe. Largest share: the UK (14%, $1.6
trillion in 2008)—more than total combined
US assets in Asia, South America, Africa and
the Middle East.
US assets in the NL ($1.2 trillion) were 2 nd
largest in the world in 2008. More than half
of US affiliate sales in the Netherlands are
for export within the EU.
Europe accounted for 53% of total foreign
output of US affiliates (nearly $1.2 trillion
in 2008).
Foreign Direct Investment Position in the USA on a Historical-Cost Basis - Billions of US Dollars
1950 1965 1970 1980 1990 1995 2000 2005 2010p
All Countries 3.39 8.79 13.27 68.35 394.91 535.55 1,256.87 1,634.12 2,342.83
Europe 2.13 6.07 9.55 45.73 247.32 332.37 887.01 1,154.08 1,697.19
Netherlands 0.33 1.30 2.15 16.91 64.67 65.11 138.89 156.60 217.05
p = preliminary figures published July 2011
Source: Survey of Current Business, US Department of Commerce, Bureau of Economic Analysis
Europe remains the most profitable region
of the world for US firms. US foreign affiliate
income earned in Europe rose to an estimated
$196 billion in 2010 - a record high - after
collapsing in 2009.
Even in recession year 2009 Europe accounted
for over 53% of total global affiliate earnings
for US companies, and 57% since 2000.
US affiliates in 2009 earned over 6 times
more in the NL ($53 billion) than in China
and India ($8.7 billion).
2,200,000
2,000,000
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
US Direct Investment Position Abroad on a Historical-Cost Basis
Balance of PaymentsDirect Investment Position Data (Millions of Dollars)
1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Netherlands / All Industries Total Europe / All Industries Total
The US was the top recipient of EU FDI
outflows in 2010. European inflows totaled
$106 billion in the first nine months of 2010,
a 70% rise from the same period a year earlier.
That equates to an annualized figure of around
$140 billion - a marked improvement from
2009, yet still well below 2008 ($202 billion).
The upturn in US inflows from Europe
was led by the Netherlands (+391%), the
United Kingdom (+93%), Switzerland
(+87%), Ireland (+85%), Germany (+53%)
and France (+17%). Combined, these six
countries accounted for nearly two- thirds
of total EU investment in the US the first
nine months of 2010.
In recession year 2009 Europe’s investment
stakes in the US totaled a record $1.7 trillion,
a 13% rise from 2008 and more than triple the
level of a decade earlier. Corporate Europe
accounted for 74% of total foreign direct
investment in the US in 2009 ($2.3 trillion).
In 2009 EU FDI in the US (€1.1 trillion) was
almost 13 times more than EU combined
investment in China and India (€85.5
billion). EU FDI in China totaled €58.3 billion
in 2009, up from €47.2 billion in 2008, while
EU FDI in India tallied just €27.2 billion in
2009, up from only €19.3 billion in 2008.
Between 2001 and 2009 EU FDI outflows to
the BRICs represented only 8.4% of global
EU FDI outflows; most was to Brazil and
Russia, not China and India.
EU investment assets in the US are 3 times
the size of those in the BRICs.
The US is the most important market in the
world in terms of European global earnings:
$105 billion in 2010.
* quoted from: The Transatlantic Economy 2011 by
Daniel S. Hamilton and joseph P. quinlan, Center for
Transatlantic Relations, johns Hopkins University,
Washington DC.
Source: U.S. Bureau of Economic Analysis
51