INSIGHTi
Biden Administration Signals Plans for an
Indo-Pacific Economic Framework
December 2, 2021
During the East Asia Summit in late October, President Biden said that the United States wil explore “the
development of an Indo-Pacific economic framework.” In November, he dispatched Commerce Secretary
Gina Raimondo and USTR Katherine Tai to Japan, Malaysia, Singapore, and South Korea to begin
discussions on potential negotiations that could start in early 2022. This announcement marks the
Administration’s first major trade and economic initiative in the region, aside from earlier cooperative
supply chain agreements. Some Members of Congress and U.S. al ies, such as Australia and Japan, have
cal ed for a more active U.S. trade policy, including U.S. leadership in regional trade initiatives. Some
stakeholders have recommended a sectoral approach to start, such as on digital trade issues.
The White House has not offered much detail on what the framework may include, but has indicated
several topics of interest, including trade facilitation, digital trade, supply chain resiliency, clean energy,
infrastructure, and worker standards, suggesting the framework could comprise multiple agreements. U.S.
officials state that they do not envision a “traditional trade agreement,” but have not provided formal
proposals on the legal structure and have not indicated whether they assess that such future agreements
would require congressional approval. Seeking agreements that do not require congressional approval
would limit the scope of potential commitments given Congress’ constitutional authority to regulate U.S.
foreign commerce. Trade Promotion Authority (TPA), which sets congressional trade negotiating
objectives and al ows for expedited congressional consideration of trade agreements when authorized,
expired in July 2021, potential y complicating the congressional approval process for new trade
initiatives.
Relation to the Administration’s Broader Indo-Pacific Strategy
Since President Trump withdrew the United States’ signature from the proposed 12-nation Trans-Pacific
Partnership (TPP) in 2017, many observers have asserted that the United States lacks an economic and
trade strategy sufficient to counter China’s increasing economic influence. These stakeholders lament the
U.S. absence from East Asian multilateral economic agreements, noting that this limits the U.S. ability to
influence the direction of trade policy in the region and to keep pace with technological developments. In
contrast, China and 14 other Asian countries in late 2020 signed the Regional Comprehensive Economic
Partnership (RCEP) trade agreement, albeit more limited in commitments than the TPP, and in fal 2021,
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China formal y requested to accede to the TPP’s successor arrangement, the Comprehensive and
Progressive Agreement for Trans-Pacific Partnership (CPTPP). China also has requested to join the
Digital Economic Partnership Agreement (DEPA) with Chile, New Zealand, and Singapore.
During their trip, Biden Administration officials reaffirmed that the Administration is not currently
interested in joining CPTPP, saying other arrangements are better suited to address the region’s current
economic chal enges. They also indicated that it was necessary to offer trade initiatives that have a
broader base of domestic political support than the TPP had. Thus far, the Administration’s international
economic agenda has focused largely on supply chain security, including, for example, cooperative
initiatives on semiconductor production, and Secretary Raimondo suggested this would continue to be an
area of focus under the new framework.
The absence of a major comprehensive regional trade and economic initiative to date arguably leaves a
gap in the Biden Administration’s efforts to compete holistical y with China. U.S. officials have
articulated a vision of a “free and open Indo-Pacific, where countries follow the rules, cooperate
whenever they can, and resolve their differences peacefully.” Thus far, however, the Administration’s
steps toward enacting its vision have been predominantly diplomatic and military in nature, including:
resolving extant al iance disputes with the Philippines and South Korea; announcing a new Australia-
United Kingdom-United States (AUKUS) security partnership; and boosting and reshaping the
Quadrilateral Security Dialogue (the Quad) among the United States, Japan, India, and Australia.
Options to Advance Digital Trade
The Administration’s recent announcement follows months of speculation regarding a potential U.S.
digital trade pact in the region. In August, Ambassador Tai noted that digital trade “is an area that we are
actively working with our partners to establish rules.” Many members, including the leaders of the House
Foreign Affairs Subcommittee on Asia and Republican members of the Senate Finance committee, have
expressed support for a digital trade agreement. By lowering barriers to digital y-enabled trade and
establishing rules and standards that al ow for non-discriminatory competition, digital trade agreements
may help U.S. companies to compete effectively in the international marketplace, while also expanding
U.S. firm and consumer access to international products that rely on digital technologies. A U.S.-led
digital agreement could help to establish regional and global U.S. leadership on an emerging trade policy
issue and serve as a counterweight to China’s recent advances into regional trade agreements. Some
observers argue that U.S. participation in existing regional digital pacts, such as DEPA, also could
advance U.S. interests.
U.S. commitments in the U.S.-Mexico-Canada Agreement (USMCA) digital trade chapter and in the
standalone U.S.-Japan Digital Trade Agreement build on the existing CPTPP provisions, which the United
States helped craft. They provide for nondiscrimination, consumer protection, and privacy, and prohibit
customs duties and technology transfer requirements, among other obligations. USMCA and the
agreement with Japan also cover financial services data flows and protect software algorithms. The
agreement with Japan could be a template for an Indo-Pacific agreement on digital trade. It did not require
congressional approval in part because it was limited in nature. For example, it omitted dispute settlement
procedures, raising questions about enforceability.
Questions for Congress
As the Administration moves forward with its Indo-Pacific economic framework, questions for Congress
include:

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 What regional and other multilateral trade commitments would best serve U.S. economic
and strategic interests in the region? What role should Congress play in informing and
deliberating on such commitments?
 Wil the announced framework be primarily cooperative in nature, or will it seek specific
and enforceable commitments, such as those included in CPTPP, in key areas to advance
economic growth through greater market access and rules-based trade in the region?
What are the tradeoffs of these approaches?
 How does the expiration of U.S. Trade Promotion Authority (TPA) affect the
Administration’s approach to scoping, negotiating, and enacting trade agreements?




Author Information

Brock R. Williams, Coordinator
Mark E. Manyin
Specialist in International Trade and Finance
Specialist in Asian Affairs


Rachel F. Fefer

Analyst in International Trade and Finance




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