Details Emerge on the US Indo-Pacific Strategy

On February 11, 2022, the Biden administration (the “Administration”) released a statement providing further detail on the Administration’s Indo-Pacific Framework (the “Framework”). The Administration’s strategy is to “more firmly anchor the United States in the Indo-Pacific and strengthen the region in the process.” To do so, the U.S. will pursue an Indo-Pacific region that is “free and open,” “connected,” “prosperous,” “secure,” and “resilient.” A month later, on March 11, the U.S. Department of Commerce (Commerce) requested public comment on “key areas of interest” related to the Framework.

U.S. Indo-Pacific Strategy Overview:

The Administration’s strategy calls for the U.S. to pursue a “free and open” Indo-Pacific region by, among other things, “investing in democratic institutions, a free press, and a vibrant civil society,” improving fiscal transparency, “[e]nsuring the region’s seas and skies are governed and used according to international law,” and advocating for “common approaches to critical and emerging technologies, the internet, and cyber space.”

In order to create a “connected” Indo-Pacific region, the U.S. will target building “collective capacity within and beyond the region,” such as deepening its regional treaty alliances with Australia, Japan, South Korea, the Philippines and Thailand; strengthening relationships with regional partners, including India, Indonesia, Malaysia, Mongolia, New Zealand, Singapore, Taiwan, Vietnam, and the Pacific Islands; supporting India’s “continued rise and regional leadership;” creating connections between the Indo-Pacific and Euro-Atlantic regions; and expanding the United States’ diplomatic presence in the Indo-Pacific region, in particular in Southeast Asia and the Pacific Islands.

As it relates to trade and commerce, the Administration argues that the “prosperity of everyday Americans is linked to the Indo-Pacific,” which requires “investments to encourage innovation, strengthen economic competitiveness, produce good-paying jobs, rebuild supply chains, and expand economic opportunities for middle-class families.” As such, the U.S. wants to “drive Indo-Pacific prosperity” by improving the region’s trade to achieve the following:

• meet high labor and environmental standards;
• promoting “resilient and secure supply chains”;
• making “shared investments in decarbonization and clean energy”;
• “[p]romoting free, fair, and open trade and investment through the Asia-Pacific Economic Cooperation (APEC)”; and,
• in partnership with the rest of the G7, closing the region’s infrastructure gap through Build Back Better World.

Also, in order to make the region more resilient, the strategy calls for the U.S. to work with “allies and partners to develop 2030 and 2050 targets, strategies, plans, and policies consistent with limiting global temperature increase to 1.5 degrees Celsius;” reduce regional vulnerability to the impacts of climate change; and ending the COVID-19 pandemic and bolstering global health security.

Nature of the Framework

It is widely expected that the Framework will not take the form of a traditional free trade agreement. Rather, it may eventually develop into a new type of framework agreement under which its members will agree to general commitments to common goals and can negotiate and agree to additional rules in several specific areas of concern, which are referred to as topic-specific “modules.” These modules may include:

• the digital economy;
• trade facilitation;
• supply chains;
• sustainability;
• worker rights; and
• infrastructure.

Whether the U.S. would offer any market access privileges under the framework remains to be seen, especially in light of the country’s withdrawal from the Trans-Pacific Partnership Agreement (TPP) in January 2017. In this regard, the digital economy module will be most interesting to watch, as it may lead to a new set of rules or norms that would facilitate cross-border digital trade.

Department of Commerce Request for Comment

Commerce has been tasked with leading the Framework’s pillars on supply chain resilience; infrastructure, clean energy, and decarbonization; and tax and anti-corruption. As such, Commerce issued a notice on March 11 requesting public comment on key areas of interest. Commenters are invited to comment on:

1. General negotiating objectives for the IPEF
2. Digital and emerging technologies-related issues
3. Supply chain resilience-related issues
4. Infrastructure-related issues
5. Clean energy-related issues
6. Decarbonization-related issues
7. Tax-related issues
8. Anti-corruption-related issues
9. Issues of particular relevance to small and medium-sized businesses that should be addressed in the negotiations
10. Other issues for consideration

Comments are due by April 11, 2022.