On April 11, the US Department of Commerce (the “Department”) and the Office of the US Trade Representative (“USTR”) closed their public comment period for the administration’s proposed Indo-Pacific Economic Framework (“IPEF”). The comments provided during the period will help the Department and USTR set goals for the final agreement.
Background on Comment Period
The IPEF is designed as a joint effort between the Department of Commerce and USTR, with each agency overseeing separate “pillars” of the agreement. USTR will handle the pillar on “fair and resilient trade,” and the Department will handle the pillars on supply chain resilience; infrastructure, clean energy, and decarbonization; and tax and anti-corruption.1 For more information on IPEF, please refer to our previous newsletter entry.
Both agencies sought public input on the following 10 items:
- General negotiating objectives for the IPEF.
- Digital and emerging technologies-related issues.
- Supply chain resilience-related issues.
- Infrastructure-related issues.
- Clean energy-related issues.
- Decarbonization-related issues.
- Tax-related issues.
- Anti-corruption-related issues.
- Issues of particular relevance to small and medium-sized businesses that should be addressed in the negotiations.
- Other issues for consideration.2
Summary of Comments
The Department of Commerce received 60 comments during the public comment period, and several trends emerged across the submissions. USTR received 1,300 comments, although many of those comments were form letters discussing workers’ rights provisions. This summary focuses on broad trends in comments submitted by industry associations, human rights groups, and corporations; the full dockets are available online at regulations.gov for the Department of Commerce and USTR.
To start, there was widespread agreement among the commenters on the need for trade negotiations in the Indo-Pacific region. Several commenters noted the lack of US participation in trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”) and the Regional Comprehensive Economic Partnership (“RCEP”),3 but labor rights groups focused on the shortcomings of previous negotiations in the region, like the Trans-Pacific Partnership, and hoped that workers’ rights would be protected in these negotiations.4 Commenters in general hoped for widespread participation in the IPEF among countries in the region, who will sign on to all pillars of the agreement, rather than an a la carte participation option.5
Industry associations and corporations urged negotiators to reduce non-tariff barriers to trade and set uniform regulatory standards across participating IPEF nations, which would increase certainty in the business environment.6 Ensuring multilateral participation in export control regimes was a popular example of regulatory streamlining that commenters argued negotiators should pursue.7 Several commenters suggested repurposing standards for trade facilitation and digital trade in already existing agreements, like the US-Mexico-Canada Agreement (“USMCA”) and Asia-Pacific Economic Cooperation forum (“APEC”).8 However, certain human rights groups noted that agreements like the USMCA fell short on data privacy concerns, and further standardizing that model in another trade agreement would be damaging.9
Technology groups were particularly active in suggesting infrastructure provisions, noting that the Asia-Pacific region presents unique challenges like reliance on offshore cable lines and cloud computing that an agreement would need to address.10 In addition, technology groups also asked that the agreements consider technology training programs among IPEF participants to develop a skilled workforce able to engage in digital trade.11
Finally, looking at supply chains, certain commenters were concerned about a “too-heavy focus on only supplying from the US domestic market,” instead advocating for a more flexible approach to supply chain management.12 These groups hoped for a “friendshoring” approach, where US companies would still source from abroad, though primarily through allied countries, and added that an early warning network for supply chain disruptions would help industry predictability.13 Human and labor rights groups advocated for forced labor provisions to be included in the final agreement.14
The relevant agencies now will review the comments and develop a negotiating strategy for the agreement. President Biden formally launched IPEF on May 23, 2022, during his travel to Tokyo.
3 E.g. Consumer Technology Association, Request for Comments on the Indo-Pacific Economic Framework, ITA-2022-0001-0056, at 8 (hereinafter CTA Comment); US Chamber of Commerce, Office of the US Trade Representative: Comments on the Proposed Fair and Resilient Trade Pillar of an Indo-Pacific Economic Framework (FRN Docket No. USTR-2022-0002), ITA-2022-0001-0024, at 2 (hereinafter US Chamber Comment).
6 E.g. American Association of the Indo-Pacific, Comments to the US Federal Register: Docket No. ITA-2022-0001 Concerning the Indo-Pacific Economic Framework, ITA-2022-0002-0058 (hereinafter AAIP Comment).
10 E.g. Microsoft, Microsoft Corporation’s Response to Office of US Trade Representative Request for Comments on the Proposed Fair and Resilient Trade Pillar of an Indo-Pacific Economic Framework and US Department of Commerce Request for Comments on the Indo-Pacific Economic Framework, ITA-2022-0001-0034, at 6 (hereinafter Microsoft Comment); Google, Comments Regarding the Indo-Pacific Economic Framework, ITA-2022-0001-0046, at 8 (hereinafter Google Comment).