On May 23, 2022, President Biden announced the launch of negotiations for the long-awaited Indo-Pacific Economic Framework for Prosperity (“IPEF”). The IPEF had been under consideration for some time, but was finally announced during the President’s first trip to Asia.
These negotiations are beginning with a total of 12 countries in addition to the United States: Australia, Brunei, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. Many of the countries on the list had been predicted (e.g., Australia, Indonesia, Japan, Korea, New Zealand and Singapore), but some were unexpected (e.g., Brunei and the Philippines). While Taiwan had indicated interest in joining, it was excluded from this launch largely because of concerns that its inclusion would prove an irritant to China, which might in turn dissuade other countries from joining. Nevertheless, there appears to be support in the Administration and elsewhere for continued bilateral engagement on trade and investment issues. On May 27, 2022, Fiji also joined the IPEF, the first Pacific Island nation to join the framework.
As announced by the Administration, the IPEF will cover four “pillars”:
- “Connected Economy,” which will cover digital trade, e-commerce and cross-border data flow issues, but also encompassing labor and worker standards, trade facilitation, transparency and good regulatory practices, and corporate accountability.
- “Resilient Economy,” which will focus on supply chain resilience through “an early warning system, mapping critical mineral supply chains, improving traceability in key sectors, and coordinating on diversification efforts.”
- “Clean Economy,” whose goals will be commitments on “clean energy, decarbonization, and infrastructure,” while also pursuing efforts to address climate change, including “renewable energy, carbon removal, energy efficiency standards, and new measures to combat methane emissions.”
- “Fair Economy,” which will seek commitment on “to enact and enforce effective tax, anti-money laundering, and anti-bribery regimes,” to include “provisions on the exchange of tax information, criminalization of bribery in accordance with UN standards, and effective implementation of beneficial ownership recommendations.”
No specific timetable was announced for negotiations.