Negotiations on the Indo-Pacific Economic Framework are set to resume this week but members of Congress are already setting the stage for a showdown over the initiative with the White House.
IPEF was launched this past spring with the aim of strengthening U.S. ties to the region and creating a stronger, fairer, more resilient economy for families, workers, and businesses. Australia, Brunei, India, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam are the current participants, and each of them except India has pledged to take part in all the initiative’s four pillars: trade (which India opted out of), supply chains, clean economy, and fair economy. An initial ministerial meeting held in September outlined the objectives in each of these areas.
The first in-person negotiations are slated to begin Dec. 10 in Australia, and the U.S. has reportedly prepared negotiating texts on many of the topics to be discussed as part of an effort to secure an agreement sooner than later. None of these texts have been made public, however, and in the interim a regional trade group recently issued a detailed list of IPEF provisions it would like to see. Highlights of these recommendations include the following.
- simplify customs procedures for shipments with values above de minimis levels but below an agreed formal clearance threshold
- market liberalization (including tariff reductions) in specific sectors to promote domestic manufacturing for growth industries
- expand the unified entry process based on the single window concept for all partner government agencies
- permit mutual recognition of authorized economic operators across IPEF members
- establish a trusted partner designation for critical goods and healthcare, potentially based on the AEO or CTPAT model
- provide a “fast pass” mechanism for trusted importers of specified goods (e.g., critical items, medical supplies)
- develop a blacklist of firms and entities that participate in the predatory theft of intellectual property along with potential sanctions
- endorse the validity and acceptance of electronic documents to facilitate customs clearance
- remove discriminatory and protectionist barriers to data flows and prohibit data localization
- ensure non-discriminatory treatment of delivery service providers
U.S. Trade Representative Katherine Tai said when the IPEF was launched that whether Congress will ultimately need to approve any resulting initiatives will depend on “where these negotiations take us.” However, a bipartisan group of senators recently objected to that position, stating that IPEF will require congressional approval because it aims to regulate foreign commerce and reshape international trade flows, authorities that the Constitution reserves for Congress. Similar concerns were raised by a separate group of lawmakers in August.
For more information on IPEF, please contact Nicole Bivens Collinson at (202) 730-4956 or via email.
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