Biden Officials Announce Indo-Pacific Trade Deal, Clashing With Industry Groups

The Biden administration on Saturday agreed with 13 other countries in the Indo-Pacific region to adjust supply chains in an effort to reduce dependence on China for critical products and enable them to better weather crises such as war. announced that it had reached Pandemic and climate change.

The Supply Chain Agreement is the first fruit of the administration’s trade initiative in the region called the Indo-Pacific Economic Framework. Negotiations continue on the other three pillars of the deal, which focus on promoting trade and improving conditions for workers, expanding access to clean energy, tax reform and combating corruption.

Commerce Secretary Gina Raimond said the supply chain agreement will deepen economic cooperation between the United States and its partners in the Indo-Pacific region, help U.S. companies do business in the Indo-Pacific region, and increase the U.S.’s international competitiveness.

“Basically, this is about increasing the economic presence of the United States in the region,” he said in a conference call with reporters on Thursday.

But high-profile business groups were skeptical of the Indo-Pacific deal, with more than 30 of them sending an open letter to the government on Friday, saying the negotiations prioritized traditional U.S. trade that could help U.S. exporters. He said the matter was left behind. This included not only lowering tariffs on its own products, but also limiting other regulatory barriers to trade and establishing stronger intellectual property protections.

The Biden administration argues that past trade deals containing these clauses have facilitated outsourcing and hurt American workers. Business leaders argue that without these agreements, the Indo-Pacific pact would ultimately have little impact on how these countries do business.

Regulatory barriers to trade could undermine efforts to strengthen supply chains and undermine the effectiveness of the administration’s new deal, the business group letter said. He also expressed concern over the administration’s failure to promote digital trade rules that would help businesses by ensuring that data flows freely across borders.

“The content and direction of the government’s proposal for consultation not only risks not delivering meaningful strategic and commercial results, but also jeopardizes U.S. trade and economic interests in the Indo-Pacific region and beyond,” the letter said. “We are raising concerns that we may be exposed,” the letter said. , the American Chamber of Commerce, the National Association of Manufacturers, the Business Roundtable, and others.

Raimond met trade ministers from participating countries in Detroit on Saturday and said the group’s characterization of the agreement was “completely wrong and reflects a misunderstanding of what the IPEF is and what it is not.” only,” he said.

During the Obama administration, the United States began negotiating a more traditional trade deal in the Pacific called the Trans-Pacific Partnership. The agreement aims to strengthen US commercial ties in the Pacific as a bulwark against China’s growing influence in the region. A number of changes were made, including lowering tariffs on auto parts and agricultural products and establishing stronger intellectual property protections for pharmaceuticals.

But the Trans-Pacific Partnership ended up creating a deep rift between Republicans and Democrats, with some politicians from both parties arguing that the deal would hollow out American industry. Former President Donald J. Trump withdrew the United States from the pact, and Japan, Australia and other member states entered into force the pact without the United States.

The Indo-Pacific Framework includes India, Indonesia, South Korea, the Philippines, Thailand, and some of the same countries in the Pacific Pact. The Biden administration, however, insists the deal is intended to better protect American workers and the environment.

“The IPEF is not a traditional trade deal,” US Trade Representative Catherine Tai said Saturday in Detroit. “This is our vision, our new vision of how our economies can work together to provide real opportunities for our people.”

“We are not just trying to maximize the efficiency of globalization,” added Tai. “We seek to promote sustainability, resilience and inclusivity.”