Three Dozen Trade Groups Complain TBT No Longer Discussed in IPEF
Trade groups representing major exporters -- including the American Chemistry Council, the National Association of Manufacturers, the U.S. Chamber of Commerce and agricultural interests -- are telling the Biden administration that they are disappointed that regulatory barriers to trade are not being addressed in the Indo-Pacific Economic Framework.
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Tariff reductions were already not on the menu, but U.S. Trade Representative Katherine Tai has argued that exporters often face more problems from technical barriers, such as standards and phyto and phytosanitary rules, than they do from tariffs, and so it was wrong to say IPEF didn't address market access.
The groups sent a letter May 26 to Tai and Commerce Secretary Gina Raimondo saying that the administration's negotiating trends "risk not only failing to deliver meaningful strategic and commercial outcomes but also endangering U.S. trade and economic interests in the Indo-Pacific region and beyond." The risk they point to is in digital trade, which they argue goes far beyond the tech giants to affect manufacturers, who need to share data across borders -- they say reports suggest the administration is "wavering" in its advocacy for high standards.
They said business and agriculture interests are disappointed that the administration is not seeking to lower or remove tariffs to U.S. exports, but even given that constraint, they don't understand why addressing "standards-related and other technical barriers to trade, measures that discourage trade in remanufactured goods, inadequate intellectual property protections, and sector-specific regulatory barriers that impede exports of autos, chemicals, cosmetics, pharmaceuticals, medical devices, and ICT products" are not focuses of the IPEF talks.
Getting the other countries to make commitments in these areas, as well as sanitary and phytosanitary standards "would help facilitate trade in sectors where the competitiveness of U.S. companies is stymied by the proliferation of non-tariff barriers overseas," they argued.
"The administration’s interactions to date with the stakeholder community offer no insight into how or why these non-market access issues of high importance to trade have been left out of the IPEF talks."
The letter reminds Tai and Raimondo that nearly half of the manufactured goods by value is exported, and that for some farmers and ranchers, more than half their sales are exports.
"A 'worker centric' trade agenda must reflect how American companies and the workers they employ suffer together when we are barred from selling the goods and services we produce in foreign markets," they said, and asked the administration to change course in IPEF.
According to a Politico reporter in Detroit on Saturday, when Raimondo was asked about the letter, she said that she had not read the letter but that the arguments were “flatly wrong” and “reflects the misunderstanding of what the IPEF is and what it isn't.”