Since the end of the Cold War, the economies of the United States and Europe have experienced a period of accelerated integration interlinked by growing ties in trade, investment, and related employment. Today, despite the recent global economic upheaval, the United States and the 27-member European Union (EU) continue to share a comprehensive, dynamic, and mutually beneficial economic partnership. Not only is the EU-U.S. commercial relationship, which advocates refer to as the transatlantic economy, the largest in the world, but for many practitioners in the transatlantic community it is also arguably the most important. Although hard hit by the current global economic downturn, the transatlantic economy continues to dominate the world economy by its sheer size and prosperity. The combined population of the United States and EU now approaches 800 million people who generate over half the world's production and are responsible for $4.4 trillion in commercial exchanges annually. Transatlantic markets are among the most open in the world and are deeply integrated through investment flows, affiliate sales and related-party trade. The transatlantic economy generates an estimated $4 trillion in commercial activity per year and accounts for close to 60% of global GDP and roughly 40% of world trade. The United States and EU are each other's largest overall markets for a host of goods and services, ranging from agricultural products to high-tech goods and services. Large values of goods such as chemicals, transportation equipment, computers, and processed food as well as transportation and financial services are traded in record amounts. More significant as the pillars of transatlantic commercial activity and the driving forces behind deepening transatlantic economic integration over the past decade have been foreign direct investment (FDI) and the interrelated activities of foreign affiliates. In contrast to trade, mutual U.S. and European FDI results in "direct participation in each other's domestic economies." The fact that each side has a major ownership stake in the other's market may be the most distinctive aspect of the transatlantic economy. At the end of 2007, the total stock of two-way direct investment reached $2.7 trillion (composed of $1.4 trillion of U.S. direct investment in EU countries and $1.3 trillion of EU direct investments in the United States), making U.S. and European companies the largest investors in each other's market. Roughly 47% of all U.S. foreign direct investment is located in Europe, while EU member states supply 42% of global FDI in the United States. European affiliate income in the U.S. reached $82 billion in 2007 while U.S. affiliate income in Europe increased to $147 billion during that same period. However, the global economic downturn has resulted in U.S. foreign affiliate income earned in Europe peaking in 2007 and actually declining by 2% by mid-2008. European affiliate earnings in the United States were reported to be flat in 2008. This massive amount of ownership of companies in each other's markets translates into billions of dollars of sales, profits, production, and expenditures on research and development. In addition, an estimated 6-7 million Americans are employed by European affiliates operating in the United States, and almost an equal number of EU citizens work for American companies in Europe. In the current global economic crisis, these figures have declined somewhat but will still constitute significant transatlantic economic and financial activity. The combined weight of these two economic superpowers means that how the United States and EU manage their relationship and the difficult issues involving domestic regulations, competition policy, and foreign investment often helps determine how the rest of the world deals with similar issues. As the figures might suggest, both the United States and EU have implemented policies that are receptive to expanding the commercial relationship. In theory, both sides have appeared to acknowledge that there is nothing to gain from protectionist investment policies. This theory is being tested in the current global financial environment as both sides of the Atlantic have flirted with some forms of protectionist policies (i.e., "buy America" provisions included in the U.S. stimulus legislation). Leaders in both Washington and Brussels have cautioned and urged restraint in implementing such policies seeking to ensure that cooperation which could help one another emerge from the current crisis is not impeded in any manner. The success of economic integration achieved thus far, however, does not guarantee that the transatlantic economies will continue to deepen. The current global economic crisis has had a negative impact on the transatlantic economy. Regulatory irritants and barriers to greater commercial ties on both sides of the Atlantic remain to be adequately addressed. A key measure of the strength of the transatlantic relationship has been the ability of both sides to work with each other throughout the current financial storm in such a way that would permit further integration and would promote expanded regulatory cooperation, as both sides of the Atlantic begin to experience an economic recovery. This report is intended to serve as a companion piece to CRS Report RL34717, Transatlantic Regulatory Cooperation: Background and Analysis , by [author name scrubbed], which provides an introduction and primer on the issue of transatlantic regulatory cooperation. The main focus of this report is on (1) the creation of the Transatlantic Economic Council; (2) the role of legislatures in the regulatory process; and (3) the Transatlantic Legislators' Dialogue and its new role as an advisor to transatlantic regulatory efforts. Because many U.S. and European industries are already deeply integrated with each other and most tariffs are low, non-tariff and regulatory barriers are increasingly recognized as the most significant trade and investment impediments to the creation of a more integrated transatlantic market. A recent study carried out at the request of the European Parliament identifies non-Tariff Measures (NTM) in EU-US Trade and Investment that affect trade between the EU and the US, and estimates their economic impact. NTMs are all about regulations, from product-specific technical standards to economy-wide regulations that may hamper trade. The purpose of the study was to estimate by how much regulatory differences increase the cost of doing business across the Atlantic, and to assess what impact they have on economic welfare in both economies. Estimates in the study were derived from a number of assumptions and were based in part on perceptions from industry; their translation into figures; an element of judgment on how to measure the impact of the reduction of individual NTMs and on whether and to what extent they can be reduced. In June 2005, a report issued by the Organization for Economic Cooperation and Development (OECD) estimated that certain structural reforms in both the United States and EU that included the reduction of competition-related regulations, tariff barriers, and restrictions on foreign direct investment could lead to permanent gains in GDP per capita on both sides of the Atlantic of up to 3 to 3.5 percent. However, some observers believe that while regulatory divergence does present an obstacle to trade, it does not automatically mean that the alignment of regulations in all sectors is possible or even desirable. In addition to domestic regulations, non-tariff barriers consist of elements such as safety norms, differences in health, environmental or engineering standards, rules of origin, or labeling requirements. Such measures are due in part to different societal preferences and priorities, but also, to a significant degree, a lack of coordination or adequate information exchange between U.S. federal and state as well as EU and member state regulators and legislators on each side of the Atlantic all of whom are subject to different legal mandates or engaged in different oversight procedures. One problem in addressing these different perspectives is the fact that the United States and Europe have very different regulatory processes and structures making attempts at regulatory convergence difficult. There have been a number of previous attempts to reduce existing non-tariff and regulatory barriers to trade. The aim of such efforts has been to reduce costs to businesses on both sides of the Atlantic, improve consumer welfare, and facilitate higher levels of economic growth. Attempts to seek meaningful regulatory cooperation began in 1995 when U.S. and European leaders launched the New Transatlantic Agenda (NTA). This initiative was designed to raise the U.S.-EU relationship to a new level of dialogue and decision-making in four areas including economic cooperation. Since then, the United States and the EU have launched several additional initiatives such as Mutual Recognition Agreements (1997), the Positive Economic Agenda (2002), the Transatlantic Economic Partnership (2004), and the Transatlantic Economic Agenda (2005) which included the formation of the High Level US-EU Regulatory Cooperation Forum. Each of these projects has contributed in some way to achieving limited progress towards reducing regulatory burdens. However, both European and U.S. companies heavily engaged in the transatlantic marketplace argue that the results have not proved materially significant. For instance, there seems to have been some improvements in areas such as competition policy and financial services, but progress in other areas such as chemicals has not been accomplished. In January 2007, German Chancellor Angela Merkel, upon assuming the rotating six-month presidency of the EU, proposed further liberalization of transatlantic trade and investment barriers by elevating the existing cooperation among U.S. and EU regulatory agencies. Building on the Merkel initiative, the April 2007 U.S.-EU Summit adopted a Framework for Advancing Transatlantic Economic Integration . The framework affirmed the importance of further deepening transatlantic economic integration, particularly through efforts to reduce or harmonize regulatory barriers to international trade and investment. A new institutional structure, a Transatlantic Economic Council (TEC), was established to advance the process of regulatory cooperation and barrier reduction by encouraging both U.S. and EU regulators to move forward on issues outlined in the framework. The 2007 Framework presented the TEC with two priorities. The first was to build upon the established sectoral dialogues which had been taking place between U.S. and European Commission regulatory experts.