CTA to Commerce: Use Indo-Pacific Framework to Bolster Supply Chains

Development of an Indo-Pacific Economic Framework (IPEF) to bolster U.S. economic relations in the Indo-Pacific region would be “a durable and sustainable forum for aligning the values of dynamic and growing economies in the Indo-Pacific region with those of the United States,” said CTA in comments posted Tuesday in docket ITA-2022-0001. Comments were due Monday to help the Commerce Department develop U.S. positions in the IPEF negotiations.

Though free trade agreements were a “tool” of the 20th century, “there is no other viable mechanism at the present time to secure favorable market access commitments from trading partners,” said CTA. “Without market access, potential trading partners in the Indo-Pacific may be unable to make general, unilateral commitments on framework rules and principles when they stand to get nothing in return.”

CTA urges the Biden administration “to use the IPEF to eliminate tariffs on consumer technology products in key growth markets in the Indo-Pacific region and beyond,” said the association. “For the IPEF to succeed, it must be a venue for opening new markets and negotiating high standard, binding and enforceable trade commitments.” The IPEF also should build on existing U.S. trade agreements in the region, it said.

It’s “urgent” that the U.S. develop trade leadership across the Pacific, especially considering “the rapid rise in new Indo-Pacific trade agreements” in which the U.S. isn't a party, including the Comprehensive and Progress Trans-Pacific Partnership (CPTPP), said CTA. “Where possible, the IPEF should be a launch pad for negotiating new free trade agreements, even serving as a staging ground for negotiated U.S. entry into the CPTPP,” it said. “To be clear, CTA strongly urges the Administration to negotiate U.S. entry into the CPTPP, which would be the best opportunity to open new markets and establish high standard, binding and enforceable trade rules that reflect U.S. values and priorities.”

The COVID-19 pandemic “revealed numerous issues that can disrupt supply chains for U.S. consumer technology products and their inputs,” said CTA. The U.S. should seek to incorporate “lessons learned” from these issues into the IPEF, it said.

CTA urges the administration to use the IPEF “to establish a network of officials or agencies that can move quickly to identify and mitigate shutdowns of supply chain-critical facilities that result from events such as public health emergencies or natural disasters,” it said. “Such a network would create a ready list of contacts within and between governments that can be quickly activated to mitigate supply chain disruptions.” It suggested creating the network “under the IPEF itself,” or in coordination with other organizations, such as the World Bank.

Designated officials in the network would be able “to work across agencies, coordinate across different levels of government, and act as points of contacts for businesses wishing to inform governments of an impending or current facility disruption,” said CTA. “The network could also identify long-term areas of collaboration to strengthen the resilience of IT supply chains, from semiconductors to the broader IT ecosystem.”