On Tuesday (November 7th), Democratic Party members of Congress stated that the Biden administration has suspended negotiations on some key aspects of its Indo Pacific Economic Framework (IPEF) initiative for digital trade. At present, negotiators from the 14 member countries of the IPEF are in negotiations and hope to reach some agreements before the Asia Pacific Economic Cooperation (APEC) summit next week.
This suspension comes as the Office of the United States Trade Representative (USTR) abandoned the long-standing digital trade requirements of the United States in the World Trade Organization (WTO) last month, no longer insisting on countries protecting free cross-border data flow, prohibiting countries from reviewing data localization and software source code.
The Office of the United States Trade Representative stated that its withdrawal of position is to give Congress more space to introduce stricter technical regulations. This satisfies liberal Democrats who hope to restrict large US technology companies, but also angers a wide range of business groups who believe it undermines decades of US policy as reflected in the 2020 US Mexico Canada Agreement (USMCA).
In a letter to President Biden, Democratic Senator Elizabeth Warren, along with four other senators and seven representatives, expressed their desire to ensure that the digital trade provisions of IPEF align with the government's new views.
These lawmakers wrote, "We thank you for suspending negotiations on IPEF digital texts, which may be used to undermine privacy, artificial intelligence, civil rights and freedoms, antitrust, temporary workers, and other digital protection measures sought by Congress and the government
The Office of the United States Trade Representative and the Department of Commerce will host the seventh round of IPEF negotiations in San Francisco this week, attempting to finalize some agreements that can be announced at the APEC Leaders' Summit hosted by the United States next week.
People familiar with the negotiation situation say that discussions on the digital trade chapter have basically come to a standstill because the US position is unclear and is being reassessed.
A spokesperson for the Office of the United States Trade Representative declined to comment on the IPEF digital negotiations.
After former US President Donald Trump withdrew from the Trans Pacific Partnership (TPP) in 2017, President Biden hopes to make efforts at the beginning of his term to showcase a new economic policy in the most important Indo Pacific region in the world economy and strategy.
IPEF is a landmark measure of the Biden administration's economic cooperation with Asia, aimed at providing alternative solutions for countries to deepen their economic relations with China and counter China's influence in the region. The 'trade pillar' of IPEF will not seek to reduce tariffs or improve market access among its members like traditional trade agreements, but will focus on environmental, labor, and other standards.
Members of Congress, including Democratic Senator Amy Klobuchar and Democratic Representative Pramila Jayapal, have expressed their desire to ensure that the IPEF and other trade agreements do not prohibit antitrust policies, consumer privacy restrictions, and other measures to combat "abuse by large technology companies".
(This article is based on a report by Reuters.)