Commerce Department Receives Comments on Indo-Pacific Economic Framework – International Trade and Investment

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On April 11, the United States Department of Commerce (the “Department”) and the Office of the United States Trade Representative (“USTR”) closed their public comment period on the draft Indo-Pacific Economic Framework (“IPEF”) of administration. Feedback provided during the period will help the Department and USTR set goals for the final agreement.

Context of the comment period

The IPEF is designed as a joint effort between the Department of Commerce and the USTR, with each agency overseeing separate “pillars” of the agreement. The USTR will take care of the “fair and resilient trade” pillar and the Department will take care of the supply chain resilience pillars; infrastructure, clean energy and decarbonization; and taxation and the fight against corruption.1 For more information on IPEF, please refer to our previous newsletter entry.

The two organizations sought public input on the following 10 elements:

  1. General negotiating objectives for IPEF.

  2. Issues related to digital and emerging technologies.

  3. Supply chain resilience issues.

  4. Infrastructure issues.

  5. Clean energy issues.

  6. Decarbonization issues.

  7. Tax issues.

  8. Issues related to the fight against corruption.

  9. Issues particularly relevant to small and medium enterprises that should be addressed in the negotiations.

  10. Other issues to consider.2

Summary of Comments

The Commerce Department received 60 comments during the public comment period, and several trends emerged in the submissions. The USTR received 1,300 comments, although many of these comments were form letters dealing with labor rights provisions. This summary focuses on major trends in comments submitted by industry associations, human rights groups and companies; complete filings are available online at regulation.gov for the Department of Commerce and USTR.

To begin with, there was broad agreement among commentators on the need for trade negotiations in the Indo-Pacific region. Several commentators have noted the lack of U.S. participation in trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”) and the Regional Comprehensive Economic Partnership (“RCEP”),3 but labor rights groups focused on the shortcomings of previous negotiations in the region, such as the Trans-Pacific Partnership, and hoped that workers’ rights would be protected in those negotiations.4Commentators generally hoped for broad participation in IPEF among countries in the region, who would sign on to all the pillars of the agreement, rather than just one à la carte participation option.5

Industry associations and companies urged negotiators to reduce non-tariff barriers to trade and establish uniform regulatory standards across all participating IPEF countries, which would increase certainty in the trading environment.6 Securing multilateral participation in export control regimes was a popular example of regulatory streamlining that negotiators should pursue according to commentators.seven Several commentators have suggested redirecting trade facilitation and digital trade standards into already existing agreements, such as the United States-Mexico-Canada Agreement (“USMCA”) and the Asia-Pacific Economic Cooperation Forum (“APEC”). “).8 However, some human rights groups have noted that agreements like the USMCA do not address data privacy concerns, and further standardization of this model in another trade agreement would be detrimental.9

Technology groups have been particularly active in suggesting infrastructure provisions, noting that the Asia-Pacific region presents unique challenges like reliance on offshore cable lines and cloud computing that a deal should address. .ten In addition, technology groups have also called for the agreements to consider technology training programs among IPEF participants to develop a skilled workforce capable of engaging in digital commerce.11

Finally, with regard to supply chains, some commentators have expressed concern about an “overemphasis on sourcing only from the US domestic market”, advocating instead for a more flexible approach to supply chain management. ‘supply.12 These groups hoped for a “Friendshoring” approach, where US companies would continue to source supplies from overseas, but primarily through allied countries, and added that an early warning network for supply chain disruptions supply would help industry predictability.13 Human and labor rights groups have advocated for forced labor provisions to be included in the final agreement.14

Next steps

The relevant agencies will now review the comments and develop a negotiation strategy for the agreement. President Biden officially launched IPEF on May 23, 2022, during his trip to Tokyo.

Footnotes

1 85 Fed. Reg. 13971 (11 March 2022).

2
Identifier.

3 For instanceConsumer Technology Association, Request for Comments on the Indo-Pacific Economic Framework, ITA-2022-0001-0056, at 8 (hereinafter CTA Comment); United States Chamber of Commerce, Office of the United States Trade Representative: Comments on the Proposed Fair and Resilient Trade Pillar of an Indo-Pacific Economic Framework (FRN File No. USTR-2022-0002)ITA-2022-0001-0024, at 2 (hereinafter US Chamber Comment).

4 For instance. Alliance for American Manufacturing, Subject: Request for Comments on the Indo-Pacific Economic Framework (ITA-2022-0001)ITA-2022-0001-0048, p. 2-3 (hereinafter AAM Comment).

5 For instance. CTA comment at 4.

6 For instance. Indo-Pacific American Association, U.S. Federal Register Comments: Indo-Pacific Economic Framework File No. ITA-2022-0001ITA-2022-0002-0058 (hereinafter AAIP Comment).

seven US House Comment at 18; National Foreign Trade Council, Comments regarding the Indo-Pacific economic frameworkITA-2022-0002-0057, at 19 (hereinafter NFTC Comment).

8 For instance. US House Comment at 4; NFTC Commentary.

9 For instancepublic citizen, Comments from a public citizen regarding the proposed economic framework for the Indo-PacificITA-2022-0001-0033, p. 5 (hereinafter Public Citizen Comment).

ten For example Microsoft,
Microsoft Corporation’s Response to the Office of the United States Trade Representative’s Request for Comments on the Proposed Fair and Resilient Trade Pillar of an Indo-Pacific Economic Framework and the United States Department of Commerce’s Request for Comments on the Indo-Pacific Economic Framework, ITA-2022-0001-0034, at 6 (hereinafter Microsoft Comment); Google, Comments regarding the Indo-Pacific economic frameworkITA-2022-0001-0046, p. 8 (hereinafter Google Comment).

11
For instance. Microsoft comment at 3-4; Google comment at 3.

12 NFTC comment at 15.

13
ID. at 16 years old ; CTA comment at 7.

14 Citizen public comment at 3; AAM comment at 5.

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This article by Mayer Brown provides information and commentary on interesting legal issues and developments. The foregoing is not a complete treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action regarding the matters discussed here.

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