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Despite current economic challenges, new study finds Europe remains the most profitable and easiest region to do business for U.S. companies

A new study by Joseph Quinlan, Transatlantic Fellow at the Center For Transatlantic Relations, Johns Hopkins and the German Marshall Fund showed that despite the Eurozone crisis, the region offers tremendous opportunities for U.S. businesses and remains the most profitable region in the world for corporate America. The crisis has triggered EU-wide structural reforms that will make Europe stronger, not weaker in the longer term. Meanwhile, the European Union remains the largest and wealthiest economy in the world.

“The continued woes in the Eurozone are leading many pundits to claim that Europe’s day has passed and that the future lays east-ward. Nothing could be further from the truth”, said Joseph Quinlan. He went on to say, “The report reveals that despite Europe’s economic difficulties in 2012, the region still accounted for nearly 25% of the foreign affiliate income from American S&P 500 companies. This compares to 15.5% in Asia-a figure that speaks volumes about Europe’s underlying importance to corporate America.” The European combined economy is larger than that of the U.S., while Europe’s accounts for about on quarter of global personal consumption; on par with the U.S. and two-thirds larger than the BRICs combined.

“It’s crucial that American businesses continue to reap the benefits from investing in Europe. To ignore a combined market economy larger than the U.S. would be a costly mistake”, [prominent member of your AmCham] said.

The report found many advantages to doing business in Europe. Europe accounts for 25% of global R&D expenditures and produces 17% of global engineering graduates (compared to 4% in the U.S.). Europe also comes out on top when it comes to ease of doing business. According to the World Bank, 12 European economies ranked in the top 25 most business-friendly; this is in contrast to some of the emerging markets that did not rank very highly – China 91st, India 132nd, and Brazil 130th.

Additionally the countries on Europe’s periphery, notably the Middle East, Russia, Turkey and North Africa remain key sources of growth and consumption. Europe’s trading links to those countries have deepened and thickened over the past decade to the benefit of U.S. companies operating in Europe.

The promise held by a possible Transatlantic Trade and Investment Partnership could further solidify the transatlantic economy. “This agreement could be a global game changer. With a big focus on regulatory and standards issues, this agreement could be a gold standard for the removal of non-tariff barriers. A new template for international trade and economic agreements could be a huge benefit of TTIP”, stated Quinlan.

Read the whole report The Case for Investing in Europe 2013 HERE