Running head: IS THE USA WEAKER THAN THE EU?

Is The USA Weaker Than The EU?

IS THE USA WEAKER THAN THE EU? 2

Is The USA Weaker Than The EU?

The United States and the European Union are undoubtedly among the largest economies

in the world. Even though they operate under different models, these two economies have

exhibited healthy competition fueled by ties and corporation in various sectors including trade,

politics and the military among others. After the Cold war, the measure of strength among states

slowly moved from military power to economic strength. The determination of strength has been

extended to areas such market strength, production, employment rates and political unity (Bayne

& Woolcock, 2011). Therefore, to answer this question, I will discuss various aspects of the two

unions including, the gross domestic product, political stability, and market competitiveness.

Since 1980, there has been a steady increase in the Growth Domestic Product (GDP) of

both the USA and the EU. In spite of this, occasional fluctuations have allowed one to overtake

the other at different points depending on their economic strengths. The growth in the American

GDP largely depends on the efficiency and improvement of its distribution networks even

though the production has been slow. The EU, on the other hand, has been characterized by

production, a ready labor force with the incorporation of technology into its production systems

helping to boost the levels. Furthermore, the establishment of a free trade area and the

harmonization of economic policies among member states has allowed for the free flow of goods

across borders (Campos, Coricelli, & Moretti, 2014). It is because of these reasons that the EU

has been able to stay ahead of the USA for a significant part of the past three decades.

The collaboration among the EU member states is limited to only economic and political

spheres with the major aims of the union being to steer economic growth and peaceful

coexistence between the member states. However, whereas there has been attempts to extend the

collaboration to other areas that would strengthen the unity of the bock, various factors have
IS THE USA WEAKER THAN THE EU? 3

come up that seem to have threatened the very existence of the union and its effectiveness in

achieving its original purpose. The sovereignty of member states and their ability to selectively

agree to treaties is key among them (Pomfret, 2007). The obvious effort by Britain to leave the

EU has further contributed to significant stability in the region thereby weakening the union. The

weak migration laws in place within the EU has further served to destabilize the region as it has

allowed for an influx of undocumented persons. In this regard, the USA has definitely been

stronger than the EU.

The economic rivalry between the USA and the EU has existed for a very long time now

even though it has been a very friendly one. This competition has stimulated steady growth in the

GDP of the two regions which has been estimated by the International Monetary Fund to stand at

$20.7trillion for the US and $20.1trillion for the EU. However, this is expected to change greatly

over the next few years in light of the newly adopted trade policies that have put in place market

entry barriers and stringent conditions for foreign companies and traders within its jurisdiction.

The EU on the other hand, has minimized regulatory barriers likely to discourage production and

the harmonized various economic and political systems between member states thereby allowing

for a competitive market (Gutiérrez & Philippon, 2018). This has further reduced the lobbying

and political expenditure incurred by investors in the region.

In conclusion, the rivalry between the USA and the EU is one that cannot be conclusively

determined for eternity because the social, economic and political factors keep changing on

either sides. However, as things stand with regard to all the ongoing Brexit negotiations, the EU

has been greatly destabilized hence adversely impacting the economy with the full extent of the

consequences yet to be determined. The above factors serve to prove that the US is stronger than

the EU.
IS THE USA WEAKER THAN THE EU? 4

References

Bayne, N., & Woolcock, S. (Eds.). (2011). The new economic diplomacy: decision-making and

negotiation in international economic relations. Ashgate Publishing, Ltd.

Campos, N. F., Coricelli, F., & Moretti, L. (2014). Economic growth and political integration:

estimating the benefits from membership in the European Union using the synthetic

counterfactuals method.

Gutiérrez, G., & Philippon, T. (2018). How EU markets became more competitive than us

markets: A study of institutional drift (No. w24700). National Bureau of Economic

Research.

Pomfret, R. (2007). Is regionalism an increasing feature of the world economy? World Economy,

30(6), 923-947.