The United States and a dozen nations, from Japan in the north to Australia in the south, launched the Indo-Pacific Economic Framework (IPEF) on Monday, built on common interests in the digital economy, climate change, economic resilience, and clean government. “The future of the 21st-century economy is going to be largely written in the Indo-Pacific — in our region,” said President Biden in Tokyo.
U.S. farm groups said they expected IPEF to remove barriers to agricultural exports. IPEF members, who include India and Indonesia, represent 40% of the global economy and 60% of the world’s population. The region was expected to be a major contributor to world economic growth in the decades ahead.
“We will see commitments with IPEF partners that facilitate agricultural trade through science-based decision making and the adoption of sound, transparent regulatory practices,” U.S. trade representative Katherine Tai told reporters. “This will help our farmers, our ranchers, and our fishers gain certainty for getting their products to the region.”
National security adviser Jake Sullivan said IPEF “is not a traditional free trade agreement” because it focused on transformations taking place in clean energy and the digital and technology sectors as well as fortifying nations to cope with fragile supply chains and fighting corruption. “It’s designed as a more innovative and flexible approach, designed to reflect the fact that our economies have changed,” said Commerce Secretary Gina Raimondo.
Eight of the 13 nations in IPEF were part of negotiations for the Trans-Pacific Partnership (TPP) during the Obama era. Advocates said TPP would be a political as well as economic counterweight to China. President Trump, who campaigned against TPP as a poor deal for America, withdrew the United States from the trade pact in 2017. Tai said lack of U.S. support for TPP “informs very much our thinking” about the structure of IPEF, “which is that trade is an important component of this but not the only component.”
“There has been a lot of swirl about the fact that there is not tariff liberalization incorporated into the scope of what we are engaging on here,” said Tai, but there are other types of trade barriers. “And yet, you know, we have farmers who can’t get, for example, a single potato across the border and into the other market.”
The White House listed four “pillars” in the formation of IPEF that would deepen U.S. commitment in the region. They were a “connected economy” with high-standard rules of the road for the digital economy; a “resilient economy” by creating an early warning system of supply chain disruptions and price spikes and diversifying the sources of key minerals; a “clean economy” that tackles climate change with steps such as the development of renewable energy, carbon sequestration, and energy efficiency standards; and a “fair economy” with enforcement of tax, bribery and money-laundering laws to crack down on corruption.
“Trade is critical to the success of U.S. farmers, including improving relationships and reaching new agreements with this region’s countries,” said Zippy Duvall, president of the largest U.S. farm group, the American Farm Bureau Federation. Dairy groups such as the U.S. Dairy Export Council said IPEF should include “meaningful market access improvements and address non-tariff barriers.”
“The IPEF is a new approach to trade negotiations that will hopefully still create the same positive, high-standard outcomes for U.S. farmers as traditional trade agreements,” said Ryan LeGrand, chief executive of the export promoting U.S. Grains Council.
IPEF members were Australia, Brunei, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand, United States, and Vietnam.
A joint statement by IPEF members was available here.
A White House fact sheet on IPEF was available here.
A transcript of a briefing by administration officials about IPEF was available here.