The Latest on Southeast Asia: September 15, 2022
On September 8 and 9, Commerce Secretary Gina Raimondo and U.S. Trade Representative Katherine Tai hosted counterparts from 13 countries in Los Angeles for the first minister-level negotiations on the Indo-Pacific Economic Framework (IPEF), a follow-up to several informal meetings since IPEF was launched in May 2022. Seven Southeast Asian countries were represented in the meeting: Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. Cambodia and Laos are so far not participating partners in IPEF, and Myanmar will not be involved given the ongoing civil war. The 14 countries involved in IPEF represent 40 percent of global GDP.
Participants held discussions about the scope and negotiating process for the four pillars of IPEF—trade, supply chains, clean energy, and fair economy. The major takeaway is that every member except one, India, has agreed to join negotiations on all four pillars. India will take part in all but the trade pillar. The ministerial brings the Biden administration one step closer to filling in the details of its economic strategy in the region, though the details of each pillar remain unclear.
At the end of the two-day gathering, the participants produced a joint statement of negotiating objectives in each of the four pillars. The topics to be negotiated in each pillar remain unchanged from earlier statements. Based on the ordering of the statements, the U.S. government’s top priorities in the trade pillar remain labor and environmental standards. Digital economy issues remain part of that larger trade pillar—a disappointment but not a surprise to those in the United States and among partner nations who have argued it should be a standalone pillar. And the U.S. government remains firm that IPEF will not include market access to the U.S. economy.
Future negotiations will focus on what concrete benefits—mostly in the form of U.S.-funded programs—could incentivize concessions on standards that the Biden administration seeks. As a start, the Commerce Department announced a new upskilling initiative focused on gender equity and digital skills. In addition, ministers from Vietnam, Singapore, and Brunei held a sideline discussion with Secretary Raimondo regarding the implementation of an initiative to strengthen clean energy collaboration by early 2023.
It remains to be seen whether any early harvests will come from the negotiations in the next year or if talks will be finished by the U.S. government’s target of November 2023. Raimondo noted that if any early opportunities for early harvest agreements do arise, they would likely be in the supply chain pillar. The ministerial was intended to get partners to align their visions for the framework. In that, it seems to have been a step in the right direction.
For more political, economic, and security analysis on the region, check out our blog series, The Latest on Southeast Asia. To hear the latest news on the region and hear from Southeast Asia experts, listen and subscribe to the Southeast Asia Radio podcast on any streaming platform.