What You Need to Know About the Indo-Pacific Economic Framework Before the ASEAN Summit

Conflicting Goals for IPEF Inside and Outside the Administration

Contact: Matt Groch, mgroch@citizen.org, (603) 560-0847

MEMO TO REPORTERS

The May 12-13 ASEAN Summit in Washington, D.C., and President Joe Biden’s upcoming trip to Japan later in the month may be opportunities for him to announce negotiating partners for his still-amorphous Indo-Pacific Economic Framework (IPEF), first proposed in Oct. 2021 as the centerpiece of his economic strategy toward the region.

IPEF negotiations could provide a forum for the administration to flesh out the details of its much anticipated “worker-centered” trade approach. U.S. Trade Representative Katherine Tai, who will lead the “fair and resilient trade” pillar of IPEF, explained at a March 31 congressional hearing that, “We are not doing a traditional trade agreement here, because we’ve seen what happened the last time we did this.” This administration’s goal will be an IPEF that “goes beyond what we’ve done traditionally with all of the traditional trappings and the traditional pitfalls.”

However, others in the administration may be less enthusiastic about this approach. U.S. Commerce Secretary Gina Raimondo will negotiate the agreement’s other three pillars: supply chain resilience; infrastructure, clean energy, and decarbonization; and tax and anti-corruption. 

U.S. Sens. Elizabeth Warren (D-Mass.) and Bob Casey (D-Penn.) recently sent to each of the administration lead joint letters that reflect this internal division. Their letter to Ambassador 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.”

Competing goals for IPEF also were revealed in public comments submitted to the two agencies. Public Citizen, the Citizens Trade Campaign, and the United Steelworkers – on behalf of the Labor Advisory Committee on Trade Policy and Negotiations (LAC) and other civil society groups – submitted comments with several common themes, including the desire for: 

  • A transparent and participatory negotiating process — a departure from the closed-door process under which traditional trade agreements have been negotiated, with 500 corporate advisors and Congress and the public locked out.
  • Strong labor standards consistent with the International Labor Organization (ILO) Conventions and building off the floor set by the improved labor terms in the U.S.-Mexico-Canada Agreement. 
  • Strong environmental standards consistent with Multilateral Environmental Agreements, as well as a climate peace clause to shield government programs to address climate from any trade-pact challenges.
  • The exclusion of Big Tech-friendly “digital trade” terms, including terms that would:
    • Prioritize corporate interests ahead of labor rights, anti-offshoring measures, and the protection of gig economy workers;
    • Help corporations hide the discriminatory effects of source code and algorithms through “trade secrets” provisions;
    • Undermine consumer privacy and data security by prohibiting limits on data flows or rules on the location of computing facilities;
    • Shield firms from corporate accountability via overly broad content liability waivers; or
    • Promote corporate consolidation by banning limits on size and services offered by tech conglomerates or by limiting other antitrust measures in any form.

However, after reading through IPEF public comments submitted by corporate interests, Public Citizen found demands at odds with the policy proposals offered by groups representing workers, consumers, and the environment. The corporate wishlist for IPEF includes:

  • A return to the controversial Trans-Pacific Partnership (TPP) or its successor, CPTPP – an idea Biden has repeatedly rejected. The TPP never won 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; 
  • Restrictions on the ability of governments to regulate where our personal data is stored and how it is maintained. Countries that have superior privacy laws could see their data protection rules undermined, while U.S. congressional efforts to introduce privacy rules could be thwarted;
  • A broad platform liability shield to shirk responsibility for discriminatory, fraudulent, or defamatory content on their platforms. Many prominent public interest groups focused on issues such as civil rights, democracy, and the market power of tech platforms have spoken out against including a corporate liability waiver (like Section 230 of the Communications Decency Act) in trade agreements;
  • Extreme intellectual property (IP) rules on medicines and other critical technologies. Even as expansive IP rules are extending the COVID-19 pandemic, a number of corporate interests seek to expand their monopoly power; and 
  • Other corporate-giveaways inserted into previous pacts, including Investor-State Dispute Settlement (ISDS) and back-door attacks on public interest protections. Under the guise of “regulatory cooperation” or eliminating “technical barriers to trade,” corporations have long used FTAs to propel a race to the bottom for consumer and other safeguards. 

If the administration announces a list of countries that intend to participate in IPEF negotiations,that list and any other information provided could offer clues as to which approach the administration intends to take. It also will be important to watch whether the administration breaks with past practice of closed-door trade negotiations that privilege corporate interests and instead replaces the corporate advisory system with an on-the-record public process. Such a process would include public hearings to formulate U.S. positions and obtain comments on draft and final U.S. text proposals and consolidated texts. Only by issuing detailed goals and making draft texts available will the American public know in whose interest the negotiations are being conducted.

Please contact Matthew Groch to speak with an expert.

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