"If the TTIP can be established, it will reinforce the interest bond of the Atlantic community through economic and trade cooperation, which means that Europe and the United States will join together once more to make rules for the world in the post-Cold War era, just like what they did at the Bretton Woods Conference during World War II," said Chen Xiangyang, a researcher on world economic and political studies with the China Institutes of Contemporary International Relations. By then, tariffs between the United States and Europe will be cleared. The two markets will merge to create the biggest free trade area in the world, with unified product safety, service and technology standards and more convenient mutual investment. All these will greatly reduce the costs of trade and investment between the two sides.

But Chen believes that due to the complicated and diverse regulations and standards of each side, as well as differing stances among EU member states, it will be not easy to reach a final agreement by 2014. For example, Chen said France insists on guarding its cultural sector. Also, former U.S. National Security Agency employee Edward Snowden revealed that Washington targeted its European allies in its intelligence programs. The event showed that mutual trust between the United States and Europe is not complete, which could present a great obstacle to building such an ambitious free trade area.

Beyond economic cooperation

The TTIP is not a simple economic bond. Observers claimed that Europe and the United States could use the TTIP to remake global trade rules and gain tremendous economic and strategic advantages. They warned that emerging economies including China must pay close attention to the moves taken by the "rich club" and protect their right to have a say in the construction of future trade and financial markets.

Zhang Monan, a researcher on world economic and political studies at the National Information Center, stressed that by establishing a high-quality free trade area, Europe and the United States can gain the initiative in future global trade negotiations and shape new rules and principles. When Europe and the United States lower thresholds to each other, they raise barriers to countries outside the TTIP, said Zhang, resulting in emerging economies facing more competition from Europe and the United States.

Chen believes the TTIP represents a new direction of free trade development. He noted that emerging economies have been on the rise in the past few years, while Europe and the United States have weakened in their dominance of the world following the financial crisis. Free trade agreements have replaced WTO multilateral trade negotiations to become the most popular trade pattern. "The TTIP is offering a new opportunity to remold the Atlantic community. With the TTIP, Europe and the United States will remain at the center of world technological renovation, production and rule-making. The pact will strengthen Europe and the United States' dominant position in the world economy," Chen said.

By establishing the TTIP, the most developed countries will bond together once more to regain their leadership in the world economy, which is why the TTIP was declared during the G8 Summit, said Wang. He emphasized that the TTIP is more than just a trade agreement. It intends to create an international market with great political significance. As the TTIP aims to realize the common development of Europe and the United States, it will revive the transatlantic relationship that declined at the end of the Cold War. He pointed out that since the economic gap between Europe and the United States is smaller than that among members of the Trans-Pacific Partnership (TPP), the TTIP will be easier to reach. Technically, TPP cannot exclude China's participation, but the TTIP can. So the TTIP will bring more challenges to China, he said.

Chen believes that the TTIP is a strategy for developed Western countries to deal with challenges from emerging economies and developing countries. "By strengthening economic, political and security cooperation and launching the TPP and TTIP, developed economies like Europe, the United States and Japan can integrate their strengths to fight for the global market, co-master rules and regulations of global trade, and raise new industry standards, further pressuring emerging powers' development space," said Chen.

He warned that China, as the biggest emerging economy, should pay great attention to the trend. Once the TTIP and TPP are established, the existing WTO framework will perform practically no function and emerging economies including China will find it hard to benefit from the current trade framework. "If China cannot start other free trade constructions on a similar level, it must join the TPP or TTIP negotiations to be a future rule-maker instead of a follower. China has become a great economic power, so it must play a role befitting its ability and status," Chen stressed.

Wang Junwen, President of the China Association of International Trade, echoed Chen's view, saying that China should actively participate in global free trade negotiations and become one of the policymakers, so as to protect emerging economies' interests. "China should join TPP negotiations as soon as possible to avoid being excluded in future global trade rule-making. It would also be a good opportunity to promote its domestic economic transformation by meeting higher international trade regulations," Wang Junwen said.

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