Cage Analysis Administrative

The second element of the CAGE analysis is the administrative distance between two countries. In this case we will be discussing the administrative distance between Germany and the United States. First of all Germany and United Stated do not belong to a common trade block. Although lately rumors occurred of the European Union and United Stated creating a free trade area called the Transatlantic Free Trade Area (TAFTA) or Transatlantic Trade and Investment Partnership (TTIP). However it seems highly unlikely of that free trade are coming into existence due to a number of differences in regulations, trade barriers, etc. Tariff barriers such as the ones imposed on agriculture are politically sensitive. Disagreements exist on regulatory policy. Food safety or environmental standards are another issue. To complicate matters further, the responsibility for regulation is split in the European Union between European and national levels, and in the United States between the federal and state governments. Negotiating with the right people about the right subjects seems to be a challenge. Investment barriers, especially in terms of infrastructure and transport sector ownership, will be very difficult to tackle.

United States belongs to the North American Free Trade Arrangement (NAFTA) and Germany to the European Free Trade Association (EFTA). In terms of the 2012 Competiveness indices published by the World Economic Forum, Germany obtained the 6th place and United States 7th place. We can therefore say that in terms of competiveness Germany and United States are evenly qualified.

Relations between the European Union and the United States are the bilateral relations between the European Union (EU) and the United States of America (USA). Due to the EU not having a fully integrated foreign policy, relations can become more complicated where the EU does not have a common agreed position.

The relationship between the EU and the US is one of the most important bilateral