IGI | INSIDE GLOBAL ISSUES
Policy Brief No. 201655
November 15, 2016
Transatlantic FTA would remake global trade rules
After seven years, negotiations for the EU-Canada free trade deal, known as the Comprehensive Economic and Trade Agreement (CETA), were concluded on October 30. Like any free trade agreement (FTA), this one is believed to bring substantial benefits to both sides. In addition, it is of a high standard and will have a greater say in the making of international trade rules in the future. Many Chinese people won't be paying much attention to the EU-Canada deal, as it is transatlantic, and geographically speaking, unlikely to affect China's economic strategy in the Asia-Pacific area. But is that really the case?
If the EU-North America FTA were to take effect, an invigorated transatlantic economy would be unleashed as its member nations are highly competitive in innovation and in the services and manufacturing industries. Furthermore, investment across the region is already extremely active. This new market would compete with the trans-Pacific economy, especially the Asia-Pacific region. Even though at present the market scale and manufacturing development in the Asia-Pacific and transatlantic regions are neck and neck, the former still lags behind in innovation and the services industry which would make it even more difficult for less developed economies to catch up to developed economies.