By David Lawder
SAN FRANCISCO, November 17 (Reuters) – The Biden administration has vowed to continue negotiations ambitious Asian trade dealbut election year pressures and resistance to hard commitments from some countries make a deal unlikelybusiness experts and trade groups say.
The Biden administration has emphasized completing key chapters of its trade “pillar” of the Indo-Pacific Economic Framework (IPEF) initiative in time for this week’s. Asia-Pacific Economic Cooperation (APEC) meeting, aiming to offer the region an alternative to China’s growing commercial power.
That effort failed after some countries, including Vietnam and Indonesia, declined to commit to strong labor and environmental standards with mandatory enforcement provisions.
The lack of trade results overshadowed the Commerce Department’s announcement that it had completed two more non-binding IPEF pillars on clean energy cooperation and anti-corruption measures.
Deputy US Trade Representative Sarah Bianchi told Reuters that IPEF partners will “recalibrate” the trade negotiations in 2024.
But it gets tougher from here, said Wendy Cutler, USTR’s former chief negotiator on the Trans-Pacific Partnership trade deal with many of the same countries. TPP succumbed to 2016 election year politics, leading to that of former President Donald Trump American withdrawal immediately after taking office in January 2017.
“My sense is that everyone is trying to put the best face on this, including our trading partners, but privately they are quite discouraged,” said Cutler, the head of the Asia Social Policy Center, who attended the APEC events. in San Francisco.
“They are left with no choice but to continue working with us in 2024, but they recognize that the prospects for solving these problems in an election year are zero,” she added.
IPEF negotiators will face stronger demands for any deal including enforceable labor provisions after Democratic Senator Sherrod Brown urged Biden to drop the trade pillar rather than lower its standards.
POLICY LIMITATIONS
The Biden administration hoped to avoid such a political backlash by limiting the scope of the IPEF trade pillar, excluding any possibility of tariff reductions or market access improvements for Asian countries that could cost American jobs.
But these restrictions do not make it easier for countries to make difficult commitments, trade groups say.
“The lack of ambition in the trade column sort of unites all stakeholders in skepticism,” said Jake Colvin, president of the National Foreign Trade Council, a group representing major U.S. companies on trade issues.
Colvin said it will be a challenge for the Biden administration to satisfy labor and environmental groups with strong protections, while also offering more benefits for businesses and member countries that want fewer barriers to trade in the region.
“Until they do that, the trade pillar will be a tough nut to crack.”
LIMITING PRESSURE
Trade agreements, even limited ones, take a long time to negotiate. The Biden administration launched negotiations in September 2022, leaving an impossibly tight deadline ahead of the APEC Summit, according to some business experts.
“Their mistake was trying to do an entire binding trade deal in just over a year,” said Lori Wallach, director of Rethink Trade, a pro-labor trade advocacy group.
In an ironic twist, the 12 member countries of TPP’s successor trade deal, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) met during the APEC Summit and affirmed their desire that additional countries join after the accession of Great Britain.
Chinese President Xi Jinping said in prepared remarks to US trade executives that China adheres to CPTPP standards to join that group and plans to “expand a globally oriented network of high-standard free trade areas.”
(Reporting by David Lawder Editing by Don Durfee and Josie Kao)
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