US out to counter China in Asia with proposed digital trade deal
- Details of the agreement are still being drafted, but could include Canada, Chile, Japan, Malaysia, Australia, New Zealand and Singapore
- The deal could set out standards for the digital economy, including rules on the use of data, trade facilitation and electronic customs arrangements
White House officials are discussing proposals for a digital trade agreement covering Indo-Pacific economies as the administration seeks ways to check China’s influence in the region, according to people familiar with the plans.
Details of the potential agreement are still being drafted, but the pact could potentially include countries such as Canada, Chile, Japan, Malaysia, Australia, New Zealand and Singapore, according to one of the people, who asked not to be identified because the process is not public.
The deal could set out standards for the digital economy, including rules on the use of data, trade facilitation and electronic customs arrangements, according to another person.
It also would show the Biden administration is interested in pursuing new trade opportunities after spending its first months focused more on enforcing existing deals than advancing negotiations with Britain and Kenya that were inherited from the Trump administration.
Officials at the White House and the Office of the US Trade Representative did not immediately respond to requests for comment.
Advocates for such an accord, including former acting deputy US Trade Representative Wendy Cutler, suggest that it could draw on existing arrangements in the region, including the US-Japan Digital Trade Agreement, as well as other agreements struck between regional nations such as the Singapore-Australia Digital Trade Agreement and the Singapore-New Zealand-Chile Digital Economy Partnership Agreement.
“We’re very much in favour of the negotiation of a digital agreement, particularly in the absence of TPP,” said Charles Freeman, the senior vice-president for Asia at the US Chamber of Commerce in Washington. “We’d like to see some sort of forward-looking, rules-based agreement in the region, in particular as a model for a global agreement. We think the time to do it is now.”
Such an agreement could sidestep at least some of the political pitfalls which have stymied previous trade negotiations, including opposition from labour unions.
It also would not need approval in the US Congress, where opposition among progressive Democrats has blocked some deals for years. Even among Republicans there is little support for comprehensive free-trade pacts after Trump’s criticism of deals reached by his predecessors.
“One of the many challenges with modern trade policy is figuring out how do you balance the various competing interests in a comprehensive deal with manufacturing, labour, agriculture, services, rules for the environment,” said Nigel Cory, associate director of trade policy at the Information Technology & Innovation Foundation, a non-partisan think tank. “It’s a very challenging and complicated task, whereas with digital-trade-specific agreements it’s a little more straightforward.”
Still, the Biden administration will have to square the proposal with its “worker-centred trade policy,” outlined by US Trade Representative Katherine Tai.
Some administration officials have publicly hinted at a potential agreement.
“For the United States to be really effective in Asia we’re going to need to make clear that we have an economic plan, a series of engagements and you will see pieces of that over the course of the next little while,” Kurt Campbell, the White House’s top official for Asia, said last week.
Campbell added that the administration was looking into “what might be possible on the digital front,” without elaborating.