Disagreements between US, Asian nations complicate IPEF negotiations

The challenges underscore the scheme’s ambitious nature and ‘great difficulty in reaching agreements among a very heterogeneous group of countries’, say analysts

The roadblocks also mean the US would likely not be able to offer Apec trade ministers material to endorse when they meet in Detroit this week

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US President Joe Biden, India’s Prime Minister Narendra Modi and Japan’s Prime Minister Fumio Kishida attend the Indo-Pacific Economic Framework for Prosperity launch event in Tokyo, Japan on May 23, 2022. Photo: Reuters

Published: 5:58pm, 23 May 2023

Snags in the negotiations for the US-led Indo-Pacific Economic Framework (IPEF) could impact Washington’s ability to meet the deadlines it had set for the Apec gathering it is hosting this week, trade experts and negotiators have said.

Launched in May last year and hailed as a revival of the US’ economic pivot to Asia, the IPEF was set to be a centrepiece at the Asia-Pacific Economic Cooperation (Apec) meeting. But the third discussion round in Singapore last week revealed challenges between the United States and the other 13 countries in the framework to agree on complex issues such as labour laws.

These roadblocks mean the US would likely not be able to offer Apec trade ministers preliminary material to endorse when they meet in Detroit at the end of this week, or to wrap up discussions by the time Apec leaders meet in November.

Local labour leaders, environmental advocates, and economic justice activists in the US call for the IPEF to include strong, enforceable labour and environmental terms and no special privileges for Big Tech. Photo: AP

Analyst Amitendu Palit, who had followed the Singapore discussions, said the difficulties underscored the scheme’s ambitious nature and the “great difficulty in reaching agreements on standards among a very heterogeneous group of countries”.

“As of now, it does look like reaching ambitious outcomes in all pillars by the November Apec leaders’ meeting will be difficult,” said Palit, the research lead in trade and economics at the NUS Institute of South Asian Studies in Singapore. “If indeed outcomes are arrived at in haste, they might be shallow and suboptimal.”

The way things are developing could lead to disappointment for the US, executive director of the Asian Trade Centre, Deborah Elms said.

“I think it will be a real problem not only when it doesn’t come through but if it ends up being a very thin, weak and light agreement if it does come through – especially because it’s been sold as if it is the next most amazing thing ever,” she said.