The Race to Finish Indo-Pacific Trade Deals Hits Snags Ahead of APEC Summit
Striving for Progress
The Biden administration is striving to showcase progress on its key Asian economic initiative as Pacific Rim leaders convene in San Francisco. However, significant gaps persist in trade-related chapters, according to insiders familiar with the talks.
Racing Negotiations
Negotiators from 14 countries are racing to finalize chapters of the Indo-Pacific Economic Framework for Prosperity in hastily arranged talks this week. Announcements are anticipated on cooperation to expedite the transition to clean energy and combat corruption and tax evasion.
Showcasing U.S. Leadership
U.S. President Joe Biden is eager to demonstrate that the IPEF is yielding substantial outcomes to leaders of Asia Pacific Economic Cooperation countries. This effort aims to provide them with a U.S.-led alternative to deepening economic ties with China.
Setting Expectations
The launch of the IPEF negotiations in 2023 made it clear that the U.S.-hosted APEC summit was a critical deadline, raising expectations among stakeholders, remarked Wendy Cutler, a former U.S. trade negotiator.
Diverging from TPP
Unlike the abandoned Trans-Pacific Partnership (TPP) free trade deal, IPEF’s scope is more limited, focusing on cooperation in supply chains, clean energy, and higher standards for labor, environment, regulatory practices, and digital trade.
Complex Negotiations
The IPEF negotiations have encountered challenges, with only one of the four pillars having a completed text. The trade pillar, in particular, has proven difficult due to countries’ differing stances on labor and environmental standards.
Digital Trade Dilemma
Negotiations on digital trade standards have hit a roadblock, with the Biden administration suspending discussions on key rules, a move that has sparked mixed reactions from various stakeholders.
Challenges and Determination
Early enthusiasm surrounding the IPEF trade pillar has given way to frustration over the complexity of the issues involved. However, the Biden administration remains determined to announce some agreements on the trade pillar, with the most likely deals seen in the area of trade facilitation measures.
Long-Term Perspective
“Trade negotiations take a long time, even when you’re offering market access,” said Cutler, emphasizing the need for patience and perseverance in such complex negotiations.
