The Indo-Pacific Economic Framework in 2023: What to Look for this Year

• From February 8 - 11, 14 nations met in New Delhi, India for a special negotiating round for the Indo-Pacific Economic Framework for Prosperity (IPEF). The Department of Commerce led these talks on behalf of the United States with a focus on advancing the framework’s supply chains, clean economy, and fair economy pillars.
• The IPEF is the centerpiece of the Biden-Harris Administration’s economic strategy in the Indo-Pacific. The talks convened 14 nations (Australia, Brunei, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, Vietnam, and the U.S.) that collectively represent 40% of all global trade. More information on the Framework’s vision, goals, and pillars can be found at CMI’s prior post on the IPEF.
• The IPEF is a new and unique form of multilateral trade and economic relationship, distinct from traditional free trade agreements. As such, the IPEF is broader than a traditional free trade agreement, more fluid, and more dynamic, while also expected to contain fewer binding commitments than those traditional agreed to between bilateral trade partners.
• The February round saw American officials from the Departments of Commerce, Agriculture, Energy, Homeland Security, Labor, State, and Transportation as well as members of the Office of the U.S. Trade Representative and the National Security Council meet with over 300 officials from IPEF member governments. All parties tabled text at this round, and negotiators will review for the next several weeks to determine what is and isn’t feasible. Additionally, negotiators continued to seek ‘early harvests’ in a number of areas. The next negotiating round will occur in Bali in March.
• The IPEF’s success or failure will impact the future of similar economic arrangements, such as the Americas Partnership for Economic Prosperity (APEP) and the U.S.-Taiwan Initiative on 21st-Century Trade. The administration hopes to conclude and sign all three initiatives by the end of 2023, meaning that progress will have to be made quickly at upcoming negotiating sessions, which have not yet been  
• Crowell and Moring International is tracking all IPEF developments at our IPEF tracker, accessible here.

Beginning on February 8, the members of the Indo-Pacific Economic Framework (IPEF), the Biden-Harris Administration’s signature economic initiative in the Asia-Pacific, held the next framework negotiating round. This round advanced the arrangement’s supply chains, clean economy, and fair economy pillars and continued to build on the negotiating text that was tabled at the last negotiating round. Notably, it did not include negotiations on the trade pillar, of which India is not a member. The Asia-Pacific Economic Cooperation (APEC) Leaders’ Summit, which will be held in San Francisco in late 2023 has been cited as a tentative target date by which the parties hope to conclude the negotiations.

At the negotiating round in New Delhi, all member parties of the IPEF tabled negotiating text. Negotiating teams took these texts back to review domestically which provisions are and aren’t feasible, decisions that are expected to be made public at the upcoming Bali negotiating round in March. Additionally, according to the readout from the Indian government, negotiators continue to seek ‘early harvests’ on issues such as capacity building, technical assistance, the sharing of expertise and best practices, investments, and other areas. Lastly, it was revealed that Singapore is expected to host a negotiating round in the near future. The pace of negotiations is expected to continue increasing throughout the rest of the year.

There is the potential for the IPEF to be far more all-encompassing than a traditional trade agreement due to its structure as an ‘executive agreement’; but critics and supporters alike also worry it may not prove as durable. The success or failure of the IPEF will have a significant impact on the remainder of the Biden-Harris Administration’s trade and international economic policy more broadly, either proving the executive agreement format to be feasible in an era of protectionist, anti-trade agreement sentiment, or not.

The target conclusion date of November, 2023, means that rapid progress will have to be made in the near term. More will be known about specifics on the thorny issues in the trade pillar in the coming months. Crowell and Moring International will continue to provide updates and regular tracking of IPEF developments on our IPEF tracker.

Please visit the tracker here.