“The US is our most important economic partner outside of Europe”

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Luxembourg’s strong political and economic ties with the US have set a stable foundation for bilateral trade and investment that will continue to grow in the transatlantic partnership context, says Foreign Minister Jean Asselborn

How do Luxembourg’s historic ties with the US help boost bilateral relations?
A bond of profound and sincere friendship, stretching over generations, unites our countries. US soldiers liberated Luxembourg during World War I and World War II. Earlier, in the 19th century, about 70,000 Luxembourgers emigrated to the rural Midwest and Chicago. Today, around 350,000 descendents of these Luxembourgers live in the US. In 2010, we supported a Luxembourg American Cultural Center in Belgium, Wisconsin. Many Americans of Luxembourg heritage have taken advantage of new laws letting them reclaim their ancestors’ nationality.

How important are bilateral trade relations with the US for Luxembourg?
The US is our most important economic partner outside of Europe. Bilateral ties run from steel to financial services and from e-commerce to biotech, ICT and commerce. Over 3.7% of exports (€438.76 million) go to the US, and 5.9% of our imports (€1.05 billion) come from there. High-grade steel beams from our ArcelorMittal’s facility in Differdange were used in building New York’s Freedom Tower, and Minneapolis’ U.S. Bank Stadium. Trade in services is even more important: €4.69 billion in exports and €8.68 billion in imports, half in financial services.

How significant is American investment in Luxembourg at present?
Luxembourg’s fund industry is the second largest after the US. We’ve also become the US’ third-largest source of FDI stock after the UK and Japan, with investments topping $417.38 billion in 2016. Luxembourg’s JAB Holding acquired US brands Peet’s Coffee & Tea, Caribou Coffee Company and Krispy Kreme for $30 billion. Our manufacturers in the US include steel giant ArcelorMittal, which operates 27 facilities, employing over 18,000. Mid-sized niche firms include the blast furnace and steelmaking equipment manufacturer Paul Wurth, and honeycomb material manufacturer Euro Composites. SES, the world’s largest commercial satellite operator, and Cargolux, Europe’s largest air-freight carrier, are also in the US.

What role does Luxembourg play in the transatlantic alliance?
Luxembourg is a committed NATO ally and contributes to the multinational battalion in Lithuania, providing satellite capacities. Luxembourg hosts NATO’s Support and Procurement Agency, and is the registration State for the E-3A component of NATO’s Airborne Early Warning fleet (AWACS).

How important is the EU for US trade?
The EU and US form the world’s most integrated economy, creating $5.5 trillion in commercial sales yearly, employing 15 million people. It’s the world’s largest and wealthiest market, equaling over 35% of world GDP in purchasing power – though the combined populations of 830 million is just over 11% of the global population.

How prominent is US investment in Luxembourg?
US investment here totals $607.84 billion. Firms like Goodyear, Amazon, G4S Security Solutions, DuPont de Nemours and Guardian Industries use Luxembourg as a base to serve European markets. ICT companies here include Cisco Systems, Hewlett-Packard, Microsoft, PayPal, Oracle and Rovi. US banks here include JP Morgan, John Deere, State Street Bank, The Bank of New York Mellon Luxembourg International, Brown Brothers Harriman and PayPal Europe. US insurance companies like AIG have subsidiaries here. And US investment funds account for 20.6% (€832 billion) of all locally managed assets, which reached a total of €4 trillion by the end of October 2017.

What are the most promising fields for US investment, beyond finance?
Space mining and intercontinental logistics are attractive. US firms like Planetary Resources, Deep Space Industries, and Spire Global have their European bases in Luxembourg. More private investment in space firms means new opportunities for US investors. Second, as an intercontinental logistics hub, we stand out due to our central location in the EU, our extensive air and rail links, multimodal transport infrastructures, advanced ICT and a top quality, multilingual, and stable business climate. US providers like CH Robinson, Expeditors and UPS now run their European logistics services from Luxembourg, while US manufacturers like Innovation First and Ampacet also host their European distribution centers here. And Amazon is managing its European Fulfilment distribution network here too.