Discussions on the Indo-Pacific Economic Framework in Los Angeles aim to establish a broad platform for market-based economies to engage in trade and data flows, environmental and labor standards, supply chains and anti-corruption efforts.
The talks will be chaired by US Trade Ambassador Catherine Doi and Commerce Secretary Gina Raimondo. President Joe Biden launched the Indo-Pacific Initiative during a trip to Tokyo in May, but some critics have questioned its value to participating countries.
Not TPP 2.0
Since former President Donald Trump pulled out of the 12-nation Trans-Pacific Partnership (TPP) trade deal in 2017, Washington has been missing an economic pillar for its Indo-Pacific engagement.
More than two years of negotiations on the TPP led to an agreement in 2015, but Congress failed to ratify it because tariff reductions did not favor free trade agreements, and the country was accused of diverting jobs and investment to low-wage countries.
Biden’s trade chief also eschewed new trade deals, instead pursuing a series of talks with the European Union focused on labor, regulation and other non-tariff issues.
Ministers from Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand and Vietnam will participate in this discussion. Together with the United States, the participants represent about 40% of global GDP.
But it is unclear whether all countries will participate in the four negotiating streams: trade, labor and digital standards; clean energy and decarbonisation; supply chain resilience; and tax and anti-corruption efforts. Countries can choose from those “pillars” to ensure broad participation.
The talks come at a time when the China-led Regional Comprehensive Economic Partnership free trade agreement was launched in January, reducing tariffs for many IPEF participants. The remaining TPP countries have also initiated a limited trade agreement.
A senior Biden administration official told reporters Wednesday that the IPEF platform is not a substitute for trade with China.
“This initiative really shows that the US has a solid economic agenda in the region,” the official said. “It’s about engaging the Indo-Pacific economies. It’s not a choice between the US and China.”
Lori Wallach, president of Rethink Trade, a group that advocates against corporate influence on trade policy, welcomed the decision not to offer tariff cuts, but questioned whether it would benefit workers.
“The ‘hyperglobalization’ enabled by these agreements over three decades has already made the old trade model politically toxic,” Wallach said in a statement. “Then, the crisis in the supply chain revealed by Covid further fueled the need for a new approach that would reverse the concentration of production of goods and services on which we all depend on so many companies in so few countries.”
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