While the European Union and the Euro Zone create many common features across much of Europe, cultural and market distinctions are still very common across the continent and need to be taken into consideration by proactive exporters. The U.S. and the 27 member states of the European Union share the largest economic relationship in the world. U.S. goods two-way trade with the European Union totaled an estimated $1.1 trillion in 2021, according to the American Chamber of Commerce to the European Union. After a strong first half of the year, real GDP growth is projected at 3.3% in 2022 and only 0.5% in 2023 due to the Russia-Ukraine conflict, monetary policy tightening, and the global slowdown. While the war in Ukraine may slow some economic growth, pent-up demand post-pandemic and continued Wisconsin export growth to European markets suggest that consumer demand is still high, and many industries are looking for new opportunities for growth. With roughly 750 million people in Europe and a high standard of living, the potential for growth in these markets always remains.

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 UNITED KINGDOM

While Brexit seemed to be on a slow boil for several years between the June 2016 referendum and the Christmas Eve deal with the EU struck at the end of 2020, the COVID-19 pandemic’s impact on the UK economy came on rapidly, and many forecasters are predicting that the UK will be bouncing back faster than expected as well. The International Monetary Fund predicts that the UK will go from one of the hardest-hit Western economies in 2020 to the fastest-growing G7 country in 2022. While often in the news for economic and political uncertainty in recent months, the UK, with a population of 67 million people and a GDP of over $3 trillion in 2021, is still a major economic force, and one of the largest trading partners for the U.S. and Wisconsin. The UK boasts the second-largest economy in Europe and led the G7 in GDP growth in 2021.

The UK is an attractive market for Wisconsin exporters, not only as a large and sophisticated market but also as one that is recognized for its ease of doing business–particularly for U.S. companies, with longstanding relationships, close cultural links, a shared language and strong trade links across multiple sectors. The UK’s departure from the EU continues to prompt UK companies to reevaluate their sourcing strategies. Similarly, Wisconsin firms will want to review their distribution and service strategies in Europe. Traditionally, Britain’s strong manufacturing base has attracted Wisconsin industrial machinery suppliers and advanced manufacturing companies, particularly those serving the aerospace, defense, and security sectors. Current trends have British partners seeking out Wisconsin companies in life sciences, water technology, and the service industries.

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 BENELUX

While each of the Benelux countries (Belgium, the Netherlands, and Luxembourg) have strong national and cultural identities, distinct languages, and different economic strengths, there are also very close ties between them, and many U.S. companies employ a regional approach when doing business in the three countries. Careful consideration should be given regarding the market differences when employing a regional strategy at a consumer and individual business level, but there are definite advantages in consolidating operations. The location and logistics infrastructure in the Netherlands and Belgium make them ideal locations for broader European distribution facilities. Luxembourg has long been a world banking, finance, and insurance center. Belgium placed among the top 10 destinations for Wisconsin exports in 2021, with the Netherlands ranking #11—and, when treated as single market, the region purchases more Wisconsin exports than Germany, Wisconsin’s fourth-highest export destination. The Benelux countries all have favorable tax climates, well-educated and English-speaking workforces, and a favorable Ease of Doing Business Ranking from the World Bank.

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 GERMANY

Germany is home to both reliable customers of Wisconsin exporters and some of the toughest competition. With a population of 82 million, Germany is the largest consumer market in the EU. Economically, Germany is Europe’s powerhouse, constituting alone 21 percent of the EU economy. This makes it the largest economy on the continent and the fourth largest economy worldwide. Germany’s total trade is surpassed only by China and the United States. However, the world’s fluctuating economic situation and the Brexit have had its effect on the German economy as well, leading to an economic slowdown in 2018 and 2019. Due to the effects of the pandemic, in 2020, Germany’s economic output declined for the first time in ten years. However, the outlook for 2021 is more positive.

Wisconsin has been called one of the most German states in the U.S., thanks to its long history of German immigration and much of its manufacturing and agricultural heritage claiming German roots. In addition, Wisconsin and the German state of Hessen boast the longest-running sister state partnership between a German and U.S. state, dating back to 1976. In both Germany and Wisconsin, businesses value quality and productivity, and are characterized by a strong work ethic. Despite an overall recession slowing economic growth for the German market, export prospects remain strong for Wisconsin companies.

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ITALY

The Italian economy is the eighth-largest in the world and third largest in the European Union, with a GDP of $2.1 trillion ($35,551 per capita) in 2021 according to trade.gov. Although it is the 18th-largest market for U.S. export goods, Wisconsin has seen tremendous growth in exports to Italy (an increase of 54% in 2021 alone). Many U.S. firms have opportunities and success in Italy, typically where technological, design, or price advantages exist.

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 FRANCE

France is one of the most modern countries in the world and is a leader among European nations. The government has partially or fully privatized many large companies, including Air France, France Telecom, Renault, and Thales. However, the government maintains a strong presence in some sectors, particularly the energy, public transportation and defense industries. France is the most popular tourist destinations in the world, so the lifting of many pandemic-era restrictions has had a positive impact on the French economy. France is a large market, the sixth-largest economy in the world and second-largest population in the EU. It is also the largest country geographically in the EU. France holds the advantage of having the most borders with other European countries, such as Belgium, Germany, Luxembourg, Switzerland, Spain, and Monaco, and shares a language with several of them, leading to a vast amount of cross-border trade. With an enviable logistics network, sophisticated consumer base, and the second-strongest industrial base in Europe, France has long attracted U.S. exporters with innovative technology and service offerings.

France imports nearly $500 million Wisconsin goods every year. As a powerhouse of EU agriculture, France is a natural primary export target market for Wisconsin companies. But France also is home to world leaders that act on a global stage, from EDF (the world’s second-largest in electricity and nuclear power generation) to LVMH (the global leader in luxury goods). French businesses boast particular strength in aeronautics, defense, retail, consumer and luxury goods, building materials and construction. Having entered the French market, Wisconsin companies can often benefit from their partners’ global reach to enter new markets.

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The views or opinions expressed here are solely those of the author(s) and do not reflect those of WEDC. WEDC is not responsible for the contents nor does WEDC guarantee the accuracy, completeness, timeliness or reliability of this information.