German-American Partnership:
Benchmarking Success
"The clear lesson of the last twenty years is that we must both combat the threats and seize the opportunities of our interdependence." Secretary of State Hillary Clinton
"It is tempting to focus our attention on the tensions and perils of our interdependence, but I prefer to view our connectedness as an opportunity for dynamic and productive partnerships that can address both the challenge and the promise of this new century."
Secretary of State Hillary Clinton
With the end to the division of Europe, the reunification of Germany and the rapid acceleration of globalization, the U.S.-German relationship has changed profoundly. In particular, the economic data demonstrate that the partnership is deeper, more interconnected and important than ever before. This website cumulates data from publicly available sources, documenting how the fundamental economic ties that bind Germany and the United States have grown in the past two decades.
The U.S. Embassy with the cooperation of a wide variety of institutions and individuals on both sides of the Atlantic has undertaken a study to capture both the depth and breadth of German-U.S. economic integration.
Today, Germany and the United States have one of the largest and most important bilateral economic relationships in the world. Bilateral investment has reached stunning levels with more than $1 trillion in assets controlled by German companies in the U.S. and American companies operating in Germany. With the enormous size of our two way investment, more and more jobs in both of our countries depend on this relationship. Indeed, 670,000 Americans, or one in every 200 employed in the private sector, now works for a German company. Meanwhile, American companies in Germany employ nearly 800,000 Germans (one out of every 35 German private sector employees), and the multiplier effects of this employment support up to an estimated additional 2 million jobs for the German economy. Bilateral trade fuels and supports these enormous investment underpinnings. The United States is now the top export market for Bavaria, Baden-Württemberg and Berlin and ranks among the top five export markets for 13 of Germany's 16 Länder.
More importantly, these trade and investment trends are likely to grow at a rapid pace. Indeed, since German reunification, U.S. foreign direct investment (FDI) in Germany has quadrupled while German direct investment in the United States is roughly seven times what it was when the Berlin Wall fell. Not only has FDI grown rapidly, but so has the acquisition of stock equities. In 2007 alone, U.S. investors bought more German stocks than they had over the entire past decade. On the trade side, the United States exported nearly twice as much to Germany last year as it did five years before; it also imported 50% more during this same time frame.
Beyond these traditional measures of economic connectivity are many others that are perhaps less obvious but just as important. For example, R&D is now a core function of U.S. and German corporate affiliates. German affiliates in the United States account for almost 3% of all R&D spending in the United States, and Germany has become a critical trading partner in advanced technologies such as biotech and life sciences products.
Germany is among the top destinations in continental Europe for American tourists, and Americans are the second largest group of tourists to Germany. This means not only profits in tourism and creation of jobs in the tourist industry, but enormous spin-off effects in terms of cultural understanding and the development of relationships and language skills that lead to even deeper economic integration.
With the end of the Cold War and the reunification of Germany, the U.S. military presence in Germany has changed significantly. Yet the contributions of the U.S. military to German prosperity through the employment of Germans (about 20,000) and U.S. military expenditures ($5 billion a year, roughly half of expenditures during peak troop levels during the Cold War) remain important.
Please post your comments and suggestions to:
benchmarks_de@state.gov
