Thirteen countries joined a new U.S.-led trade initiative designed to reengage the U.S. in the Indo-Pacific and counter China’s influence in the region, according to Axios.
Who’s in: Initial partner countries in the Indo-Pacific Economic Framework for Prosperity (IPEF) are Australia, Brunei, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand, the U.S. and Vietnam.
- Current participants represent about 40% of global GDP, and other countries may join the pact as its framework is developed.
Why it’s happening: According to a White House statement, the framework was created to address several 21st-century economic challenges.
- The IPEF will seek to set fair rules and regulations for the digital economy, ensure secure and resilient supply chains, create major investment in clean energy infrastructure and raise standards for transparency, fair taxation and anti-corruption.
- It will not currently include market access or other components of a traditional trade agreement.
What they’re saying: “This framework is intended to advance resilience, sustainability, inclusiveness, economic growth, fairness and competitiveness for our economies,” the White House said in a statement. “Through this initiative, we aim to contribute to cooperation, stability, prosperity, development and peace within the region.”
Why it matters: America’s manufacturers depend directly on exporting their products to markets in the Indo-Pacific.
- The region is crucial to the success of manufacturers in the U.S., accounting for about 40% of U.S. manufacturing trade and supporting approximately 2 million American jobs.
- The region is projected to be the largest contributor to global economic growth over the next 30 years.
NAM’s influence: In February, NAM President and CEO Jay Timmons laid out the NAM’s recommendations for the U.S. approach to economic engagement with the Indo-Pacific region, including a call for robust market access and openings.
- Additional recommendations included eliminating trade barriers that undermine manufacturers in the U.S., provide for supply chain information sharing, strengthening regulatory standards across the board and securing commitments to end forced labor in regional supply chains.
- The NAM also submitted more detailed comments on the IPEF in April to the Office of the U.S. Trade Representative.
Our take: “Manufacturers are encouraged that the [Indo-Pacific Economic Framework for Prosperity] will address key manufacturing priorities we have outlined in areas such as digital economy, resilient supply chains and transparency and good governance,” said NAM Vice President of International Economic Affairs Ken Monahan.
- “As discussions continue, we’re looking for U.S. leaders to support manufacturing jobs by taking an approach that opens markets, strengthens U.S. innovation and technology leadership, raises global standards and establishes best-in-class trade rules.”