USA: Official talks on the Indo-Pacific Economic Framework, the economic component of US President Joe Biden's strategy to counter China in the Indo-Pacific, are set to begin in Los Angeles on Thursday, when US Trade Representative Catherine Tai and Commerce Secretary Gina Raimondo meets with counterparts from 13 other participating countries.
According to trade experts and Biden administration officials, a US priority is ensuring continued access to so-called critical materials.
“We are laser-focused on supply-chain resilience. We are focused on bringing stability and resilience to our supply chains, especially in the production and relocation of critical products,” a senior IPEF official said on Wednesday. important countries."
The official further added, “We need more transparency and we need to have more partners, and that is exactly what we are doing in this framework, be it transport goods, critical goods or critical minerals.
It gives us the opportunity to work together on issues so that we are stronger when new difficulties arise. And I believe that nations are benefiting from it.
A joint statement that specifies the actions that the participating countries should take is expected to come out of the two-day meeting. Those who attended any meetings that followed Biden's IPEF announcement described him as devoid of details.
During a visit to Tokyo in May, Biden touted the idea as one to "write the new rules for the 21st century economy" in the region. The US is building an Indo-Pacific strategy that strengthens ties with longtime allies such as Japan and Australia as well as Southeast Asian countries to counter China's growing economic and security presence.
The administration's focus on "supply chain resilience" of critical materials reflects its large technological conflict with China, which dominates the world market for materials needed to produce a number of high-tech products, including smartphones and hybrid vehicles. Contains rare earth minerals. ,
IPEF has been marketed by US authorities as a framework that would create advantages over traditional trade agreements that are based on tariff concessions and market access.
According to other participants, who claim that this was clarified in earlier discussions, the US does not intend to include any additional market access in this framework.
Any of the IPEF's four policy "pillars" - trade, supply-chain resilience, clean energy, decarbonization and infrastructure, and anti-corruption - may be joined by members.
The first column would be under the control of the US Trade Representative, and the rest under the control of the Commerce Department.
Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam are among 13 countries that have joined the US-led initiative.
Japan has said it will support all four pillars, but it is still unclear how much other nations will contribute.
According to Emily Benson, an international business fellow at the Center for Strategic and International Studies in Washington, the supply chain will be an important area of focus for IPEF countries. Each nation faces unique issues with its supply chains. According to Benson, during the Covid era, they have been affected by supply chain restrictions.
"I think this could certainly be an area where we see quite an immediate movement," she said. "If the parties decide to sign up to share information ... to collaborate more closely on supply chain issues."
Since the business pillar would include many domestic agencies, ministries and stakeholders without the obvious benefits such as offering traditional business deals, according to Deborah Elms, founder of the Asian Business Center, a Singapore-based lawyer and educator for business in Asia, it could be The challenge of attracting members.
To achieve "win-win" results, a business agreement typically brings a lot of things together, Elms noted. This is certainly possible in this area of the IPEF, but the priority areas were determined by American politics rather than by careful scrutiny of the members' shared interests.
The report continued, "Without clear, offsetting market access benefits, it may be challenging for some member governments to describe what benefits their country benefits from IPEF."
Additionally, Benson did not expect "an early harvest" from the trade pillar, which should have seven subunits for negotiation, such as agriculture and climate, according to her.
It is "becoming increasingly clear," according to Benson, that the trade pillar is relatively more complicated than the other pillars, which means that negotiations will take longer.
The anti-corruption and taxation pillar would probably be the most difficult to negotiate, according to Kelly Ann Shaw, a trade negotiator in the Donald Trump administration, "due to IPEF-partner sensitivities and the politics, particularly on tax, here at home."
Shaw, who is now a partner at the international law firm Hogan Lovells, described IPEF as "a modest step in the right direction," but he expressed concern about the lack of safeguards that could guarantee IPEF's efficacy.
A toothless IPEF is disastrous for the US and for our relations with the region, according to Shaw.
"I'm not sure what the "stick" is without market access. There aren't many examples of trade-like agreements with "binding" commitments that aren't subject to the removal of tariff concessions if nations break the rules, the expert observed
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