Biden launches Indo-Pacific agreement without market access
President Biden today, May 23 in Tokyo launched the Indo-Pacific Economic Framework for Prosperity (IPEF), a new trade partnership that he noted “covers half the population of the world and more than 60 percent of the global GDP,” but does not include increased market access or a goal of tariff reductions.
Agriculture groups have pushed for increased market access and reductions in tariffs in other countries, but including those elements would require congressional approval and that would be elusive in the current political climate in the United States.
U.S. Trade Representative Katharine Tai said today in an on-the-record call organized by the White House that the agreement “will see commitments with IPEF partners that facilitate agricultural trade through science-based decision making and the adoption of sound, transparent regulatory practices. This will help our farmers, our ranchers, and our fishers gain certainty for getting their products to the region.”
Asked on the call about the Trans-Pacific Partnership, which would have included market access, Tai said, “With respect to TPP, I think that the biggest problem with it was that we did not have the support at home to get it through.”
“If you look back at the years 2015 and 2016, and despite Herculean efforts, it could not be gotten through Congress. And then, in 2017, it was President Trump who took the United States out of it.
“I think that there’s a very, very strong lesson there: that TPP, as it was envisioned, ultimately was something that was quite fragile and that the United States was not able to deliver on. And that informs very much our thinking about bringing the Indo-Pacific Economic Framework, as it’s designed here, to the region — which is that trade is an important component of this, but not the only component. So that we are bringing in more robust and comprehensive approach to our partners in this region.
“There has been a lot of swirl about the fact that there is not tariff liberalization incorporated into the scope of what we are engaging on here. And I think that also goes to the fact that the kinds of trade agreements, the traditional ones that we’ve done before, are very much a part of the practice that has brought us to where we are, both in terms of the fragility of where that trajectory has taken us.”
Biden pointed out that the framework will “start with new rules governing trade in digital goods and services so companies don’t have to hand over the proprietary technology to do business in a country..commitments to eliminate bottlenecks in critical supply chains … [and] first-of-its-kind commitments to clean energy and decarbonization.”
Commerce Secretary Gina Raimondo also mentioned on the White House call that there will be “new measures to combat methane emissions,” but did not go into detail.
Biden said that the countries launching the agreement with the United States are Australia, Brunei, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam.
On the call, National Security Adviser Jake Sullivan added that “this is an open platform. So there are other countries that could conceivably join us as we move forward.”
Neither Biden nor Sullivan mentioned that Taiwan has been excluded from the pact, apparently out of fear that it would upset Chinese leaders who consider Taiwan a part of China.
Senate Finance Committee Chair Ron Wyden, D-Ore., today praised the launch of discussions “to strengthen supply chains and create a more resilient economy for American workers and families.”
“The Indo-Pacific Economic Framework is a chance for the U.S. and our allies to write the rules of the road for trade, undermining China’s ability to spread its authoritarian model, and improve supply chain routes with like-minded countries in Asia. It’s a crucial counterweight to the Chinese government’s model of trade cheating, government subsidies and repression,” Wyden said.
“I commend President Biden — and the other 12 countries joining the IPEF discussions — on recognizing the need for a fresh and innovative approach to trade policy and trade agreements that puts American values first. That means placing the needs of workers front and center and ensuring that climate impacts are not only discussed, but actually addressed through active decarbonization efforts.
“And it means putting the drivers of the 21st century economy — from digital trade to international standards — at the heart of the discussions. I continue to urge full consultation and transparency with stakeholders and Congress throughout this process, to ensure that these agreements truly support American workers, farmers and consumers alike.”
American Farm Bureau Federation President Zippy Duvall today called the launch of the IPEF “a positive step.”
“The launch of the new Indo-Pacific Economic Framework is a positive step, and we hope additional progress will quickly follow,” Duvall said in a news release.
“Trade is critical to the success of U.S. farmers and ranchers, including improving relationships and reaching new agreements with this region’s countries. The IPEF will help reduce barriers, improve the adoption of science-based standards and grow American agricultural exports to the region.
“We urge the administration to work with other nations through the new Indo-Pacific Economic Framework to expand access to American goods throughout the world.”
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