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A two-day ministerial meeting under the U.S.-led Indo-Pacific Economic Framework initiative begins in San Francisco, November 13, 2023.
One of President Biden’s great accomplishments has been to move away from the corporate use of trade policy to advance corporate interests at the expense of the public interest. But the Biden administration can’t seem to get its act together on a pending deal known as the Indo-Pacific Economic Framework (IPEF).
This saga gets a little wonky but is important because it is emblematic of the divisions in both the administration and the Democratic Party, as well as the immense power of Big Tech to turn government policy to its own use.
The backstory: Trade traditionalists cooked up IPEF as a sequel to the failed Trans-Pacific Partnership (TPP) of the Obama era. Unlike its predecessor, IPEF isn’t exactly a trade deal—it contains no tariff cuts or market access rules—rather it’s an “economic framework” with 13 Pacific Rim “partners,” and doesn’t require the approval of Congress.
The tech lobby has viewed IPEF as a useful vehicle to undercut regulation of platform monopolies by both the U.S. and other nations, in such areas as privacy, antitrust, and national security. However, despite spending a small fortune to influence IPEF, tech has been outplayed.
The Office of the U.S. Trade Representative has blocked Big Tech’s agenda, both on the trade provisions of IPEF and in parallel negotiations at the World Trade Organization. This has left tech champions in Congress, notably Sen. Ron Wyden (D-OR), livid. Meanwhile, on the progressive side, Sen. Sherrod Brown (D-OH) is just as appalled that IPEF contains no provisions on labor rights and has threatened to sink the whole deal.
IPEF was supposed to be completed in time for this week’s Asia-Pacific Economic Cooperation summit, to be personally unveiled by President Biden. Three of the major IPEF “pillars” are complete, on supply chains, cooperation on clean energy, and fighting corruption and tax evasion. These are the province of the Commerce Department.
But the trade pillar is still the subject of fierce infighting, and it’s not clear who at the White House is in charge of coming up with a unified position. National Security Adviser Jake Sullivan (who has a few other things on his mind) is said to be friendlier to the view that trade policy should not carry water for Big Tech, while National Economic Council director Lael Brainard is more of a trade traditionalist. She happens to be married to Kurt Campbell, President Biden’s nominee to be deputy secretary of state. Campbell, in the Obama administration, was a big booster of TPP and of the tech world’s self-serving conception of digital trade.
For now, the plan is to kick the can down the road: delay releasing the contentious trade provisions of IPEF, let the infighting continue, and release the texts of the other three pillars. It would not be so bad if the result of all of this were to stop doing trade deals. They do little for the U.S. or the world economic system; they are mostly about optics, and they are constantly at risk of being captured.
