IPEF at the Crossroads

Public Citizen News / May-June 2022

By Karolina Mackiewicz

This article appeared in the May/June 2022 edition of Public Citizen News. Download the full edition here.

U.S. Trade Representative (USTR) Katherine Tai has stated repeatedly that the Biden administration’s vision for trade will not repeat the past mistakes of prioritizing large business interests above all else, but will serve workers, consumers, and the environment. This is a welcome change after decades of U.S. trade policies that have offshored jobs to countries with exploitative labor conditions, encouraged polluting industries, and constrained domestic consumer policies.

In October 2021, President Biden introduced the Indo-Pacific Economic Framework or IPEF. Little is known about IPEF as of now, including which countries will be participating in the framework.

It could be an opportunity to realize a new, lasting vision for trade that deserves broad support. However, the notion of an IPEF did not come from consumer advocacy organizations, environmental groups, or organized labor. And one thing we do know about IPEF is that mega corporations are hoping to use it to solidify their power.

Big Tech’s “Digital Trade” Power Grab

At a recent Senate Finance hearing, U.S. Sen. Elizabeth Warren (D-Mass.) warned Tai that “lobbyists for the giant corporations are celebrating IPEF as the second coming of the [Trans-Pacific Partnership] TPP… Tech companies like Facebook and Amazon… are involved in spreading misinformation, mistreating workers, and squashing competition. They also hire hordes of lobbyists to protect their way of doing business.”

An initial review of public comments submitted by the Chamber of Commerce, PhRMA, and other corporate interests justifies Warren’s concern. Industry lobbyists are pushing for IPEF to emulate the TPP, a proposed pact that never earned majority support in Congress because it would have offshored jobs to countries that use forced and child labor, locked in high medicine prices, and threatened public interest safeguards.

In particular, the so-called “digital trade” proposals Big Tech is pushing are not focused on remedying actual problems related to the online sale of imported goods, such as tariff evasion and product safety. Instead, tech companies hope to use IPEF to lock in binding international rules that limit governments from regulating online platforms and from fighting corporate concentration and monopoly power. They seek to undermine domestic policy space on important issues like gig economy worker protections, discrimination and algorithm transparency, competition policy and anti-trust, corporate liability, and consumer privacy.

Trade for People and the Planet

In comments submitted to the USTR, Public Citizen described the vision needed for IPEF to succeed in terms of policy and politics. Key components include a transparent and participatory negotiating process; strong labor and environmental standards based on key international agreements; and digital rules that prioritize workers’ rights and privacy over corporate interests.

Whether this vision will be shared by all administration officials involved in IPEF remains to be seen. Ambassador Tai, who will lead one of IPEF’s four pillars, often speaks of a new type of trade policy that uplifts workers across borders and tackles climate change head-on. However, the other three pillars of IPEF will be led by Commerce Secretary Gina Raimondo, a former venture capitalist and “free trade” fanatic.

Warren and U.S. Sen. Robert Casey (D-Pa.) recently sent to each of the administration leads joint letters that reflect this internal division. Their letter to Tai voiced support for her goal of “worker-centric” trade, while the letter to Secretary Raimondo was much more critical of her enthusiasm for “traditional free trade agreements [which] have been terrible for workers, consumers, and the environment.”

On May 12, the United States will be hosting a meeting of the Association of Southeast Asian Nations (ASEAN), a political and economic union of ten countries in the region. This may be an opportunity for the administration to announce some or all of the countries that will be part of IPEF negotiations. The countries involved will give more information about the scope of the agreement and issues to be included.

Public Citizen will closely monitor the negotiations and ensure the public is apprised of how terms of a potential IPEF will affect people’s jobs, health and safety, and the environment. We will fight fiercely to realize our new vision for trade, and to avoid IPEF replicating past failed trade-pact models that have benefited large commercial interests to the detriment of most.