The US is pushing FTAs in various directions, aiming at removing all barriers, including seeking congressional approval of FTAs with Columbia, Panama and South Korea, promotion of the Trans-Pacific Partnership in Asia, “modernization” of North American Free Trade Agreement (NAFTA), and now launching of the US-EU FTA negotiations. Compared with the US, the EU, entangled in a serious debt crisis and economic recession, shares the same goal, although at a slightly slower pace.
The EU, for its part, has rich experience in regional market and economic integration. As a result, there is nothing strange in the two cooperating against external pressures. The FTA negotiations that are being ambitiously promoted by the US and EU will inevitably promote global trade liberalization. This will bring a new driving force for China to enter further into globalization as well as more challenges.
There has already been close cooperation between the US and the EU, and the lowering of trade and investment barriers will tend to increase merchandise and capital flows between the two, which will bring side effects to external players such as China. In addition, both the US and EU have been seeking to build new trade rules through regional trade arrangements. Although China has entered into the inner circle of world trade, it has limited power in setting rules, and the new conditions related to environment, labor and so on will pose further challenges.