There has, of course, been a stable trade relationship between the US and Luxembourg for decades. As Tereba notes, the US is the first trade partner for the grand duchy, outside the EU, for goods, and the second most important one when it comes to services.
Moreover, there’s a “very high” level of foreign direct investment from Luxembourg to the US and vice-versa.
US exports to Luxembourg have included ICT equipment and aircraft, for example, and the recent signature of both countries on the Artemis Accords only reaffirms the two countries’ commitment to a collaboration on space strategy. According to the US Department of State, US firms are also among the “most prominent foreign investors” in the grand duhy.
Indeed, as Tereba summarises, overall “trade relations are very strong and important and have not been so far impacted, let’s say too much, by the current…elections.”
Pick up where TTIP left off?
But if one thorn in the side could be named, it may well be the Transatlantic Trade and Investment Partnership (TTIP), an initiative launched under former US president Barack Obama in 2013 and halted by current US president Donald Trump after he took office.
It would have been the single largest bilateral trade agreement of its kind, had it gone through--the European Commission estimated at the time that EU exports to the US would have increased by 27%, and vice-versa by 35.7%.
“For a country like Luxembourg, which is very open in terms of exporting and importing, TTIP was great opportunity to develop trade with the US,” Tereba says. “The first Trump election impacted the basis for new trade developments heavily.”
An EU Council decision on 9 April 2019 rendered the negotiating directives for TTIP obsolete, adding that despite the depth of bilateral investment and integrated economies between the US and EU, the council stated it was a “relationship which could be further improved”. It added, “Past efforts with the [US] have demonstrated difficulted in negotiating mutually acceptable commitments in areas identified as priorities by the [EU]”, with sensitivities in areas such as fishery and energy product sectors.
Tereba hopes that some sort of negotiations could continue under “[Joe] Biden, who is much more in favour of multilateralism” and “is not hostile to multinationalism”, but adds as a caveat: “of course, we don’t have any certainty or confirmation about that.”
Connecting with Wisconsin
Tereba says the covid-19 pandemic kickstarted some companies to consider going more international. “There are certain sectors in Luxembourg which really use[d] the opportunity to continue export activities, and the US [was] one of the markets they targeted in the first place,” she says. And, fortunately, the regulatory and legal environment for getting established in the US has broadly remained more or less the same from one administration to the next.
While the Chamber of Commerce and its partners like the economy ministry and Luxinnovation have been operating increasingly in the digital arena for trade events, with in-person missions greatly scaled back, one of its last incoming visits included stakeholders from Wisconsin, a Midwestern state which has a strong tie to the grand duchy through the Luxembourg-American Cultural Center, whose Roots and Leaves Museum also celebrates this shared heritage. “We have already a good exchange also with the investment development authorities of Wisconsin,” Tereba says. “Culturally this is an interesting opportunity to connect, also on the economic level.”
She adds that a country seminar-style event on Wisconsin is in the pipeline “to identify opportunities and hopefully prepare them for a visit in the real world”, which could allow local companies to explore sectors such as healthcare, fintech and energy abroad.
But she cannot say when they’ll start travelling again--not just because of the health crisis, but also because.”it’s not a good climate…you can feel it when you talk to your partners abroad… we try to propose the right way of connecting with our partners.”