Work on three of the four pillars of the Indo-Pacific Economic Framework is now all but done but participants have yet to reach agreement on trade issues.
IPEF was launched in May 2022 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 taken part in all the initiative’s four pillars: trade (which India opted out of), supply chains, clean economy, and fair economy.
On Nov. 16 the IPEF participants issued a joint statement announcing that negotiations on clean economy and fair economy have been substantially concluded. A supply chain agreement was concluded earlier this year and signed this month. Next steps include preparing final texts, concluding domestic processes for signature, and ratifying, accepting, or approving the agreements, which the participants said they hope to do “as soon as practicable.”
There was no word from the Biden administration as of Thursday morning on the status of the negotiations on trade, though they are expected to continue despite some recent vocal opposition. When the IPEF was first announced the U.S. indicated that goals in this area included establishing enforceable, high-standard commitments with respect to digital economy and e-commerce, supply chain resiliency, trade facilitation, agricultural trade, and corporate accountability. As with the other trade initiatives being pursued by the Biden administration, tariff liberalization is not among the objectives.
Highlights of the efforts contemplated under the clean economy and fair economy agreements include the following.
- bolster the supply of and demand for low- or zero-emissions goods and services, including by reducing potential non-tariff barriers
- strengthen clean energy supply chains by securing more diversified and sustainable sources of critical inputs, including critical minerals or materials
- facilitate cross-border business through collaboration on infrastructure, technologies, and mutually-recognized standards, methodologies, and certifications
- decarbonize and otherwise reduce the climate impact of the transportation sector, including through efforts related to the establishment of green shipping corridors
- enhance efforts to effectively prevent, detect, investigate, prosecute, and sanction corruption offenses, including through adopting or maintaining and effectively enforcing measures concerning domestic and foreign bribery and money laundering
- encourage the private sector to implement internal controls, ethics, and compliance programs that contribute to preventing and detecting corruption including bribery
- adopt or maintain criminal, civil, or administrative measures to address corruption, fraud, and other illegal acts in government procurement
- promote contracting with suppliers that use good business practices
For more information on IPEF, please contact Nicole Bivens Collinson at (202) 730-4956 or via email.
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