On May 23, 2022, in Tokyo, the United States, together with Australia, Brunei Darussalam, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam, launched the Indo-Pacific Economic Framework for Prosperity (IPEF).Footnote ¹ A little more than two weeks later, on June 8, at the ninth Summit of the Americas, in Los Angeles, President Biden announced the Americas Partnership for Economic Prosperity (APEP), with participants to be named later.Footnote ² Neither the IPEF nor the APEP is a trade agreement offering tariff reductions or other forms of market access. Neither requires congressional approval.Footnote ³ And neither establishes binding obligations on its participants. Both are political declarations that set out blueprints for future discussions on economic policy and cooperation, and indeed both are meant to serve as substitutes for traditional trade deals, like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which the administration has decided not to join.Footnote ⁴ As Secretary of Commerce Gina Raimondo remarked, the IPEF “is intentionally designed not to be a ‘same old, same old’ traditional trade agreement.”Footnote ⁵ Instead, “it's designed as a more innovative and flexible approach, designed to reflect the fact that our economies have changed.”Footnote ⁶ National Security Advisor Jake Sullivan emphasized the point: the IPEF is “a 21st century economic arrangement designed to tackle 21st century economic challenges.”Footnote ⁷ Seeking to counter China's growing economic influence in the Pacific and the Americas,Footnote ⁸ the IPEF and APEP also signal what the U.S. government considers are the likely opportunities and threats in trade and investment during the coming years. They show as well the effect of domestic U.S. politics, manifested most clearly in the election of Donald Trump and his decision that the United States would not become a party to the Trans-Pacific Partnership, on the content and form of contemporary U.S. trade deals.

The IPEF Statement declares that it marks the initiation of “collective discussions [among its participants] toward future negotiations” in order to “strengthen economic cooperation” in four areas.Footnote ⁹ These four “pillars” are: “Trade,” “Supply Chains,” “Clean Energy, Decarbonization, and Infrastructure,” and “Tax and Anti-Corruption.”Footnote ¹⁰ For each, the Statement articulates the partners’ commitments to principles and their goals going forward. Regarding trade, they announced: “We seek to build high-standard, inclusive, free, and fair trade commitments and develop new and creative approaches in trade and technology policy that advance a broad set of objectives that fuels economic activity and investment, promotes sustainable and inclusive economic growth, and benefits workers and consumers.”Footnote ¹¹ On supply chains, the partners undertook to “improv[e] transparency, diversity, security, and sustainability in our supply chains to make them more resilient and well-integrated . . . [and will] seek to coordinate crisis response measures; expand cooperation to better prepare for and mitigate the effects of disruptions to better ensure business continuity; improve logistical efficiency and support; and ensure access to key raw and processed materials, semiconductors, critical minerals, and clean energy technology.”Footnote ¹² Concerning clean energy, decarbonization, and infrastructure, they “plan to accelerate the development and deployment of clean energy technologies to decarbonize our economies and build resilience to climate impacts . . . [which will] involve[] deepening cooperation on technologies, on mobilizing finance . . . and on seeking ways to improve competitiveness and enhance connectivity by supporting the development of sustainable and durable infrastructure and by providing technical assistance.”Footnote ¹³ And pertaining to tax and corruption, they “committed to promoting fair competition by enacting and enforcing effective and robust tax, anti-money laundering, and anti-bribery regimes in line with existing multilateral obligations, standards, and agreements to curb tax evasion and corruption in the Indo-Pacific region.”Footnote ¹⁴

There is significant overlap between the IPEF and the APEP.Footnote ¹⁵ The APEP identifies three “areas of focus” that are similar to those in the IPEF: “Ensuring Sustainable and Inclusive Trade”; “Making More Resilient Supply Chains”; and “Creating Clean Energy Jobs and Advancing Decarbonization and Biodiversity.”Footnote ¹⁶ And the APEP's aspirations in these areas are described in ways that are consistent with, and sometimes identical (or nearly identical) to, those in the IPEF. Thus, on clean energy, the APEP partners will “work together to accelerate clean energy technology . . . .[and] will work to decarbonize our economies . . .[,] build resilience on carbon impacts . . .[,] deepen cooperation on technologies and best practices, mechanisms to increase public and private investment, and explore technical assistance to advance quality infrastructure.”Footnote ¹⁷ And on supply chains, the APEP asserts that: “Our economic security rests on supply chains that are diverse, secure, transparent, and sustainable. We recognize the importance of diversifying and rebalancing our supply chains to minimize disruption risks.”Footnote ¹⁸

The IPEF and the APEP also share an “open architecture”—a flexible approach to participation and implementation. Partners can select the pillars in which they wish to take part. India, for example, is not currently joining the IPEF's trade pillar because the pillar links environmental and labor issues to trade.Footnote ¹⁹ The legal effect of the agreements that will be negotiated will vary too, with some binding and some not. And the type of substantive commitments (policy promulgation and regulatory alignment, elaboration of shared standards, information sharing and transparency, financial and technical assistance and capacity building, and investment facilitation and promotion) will vary as well. Since the IPEF's announcement, an informal ministerial discussion of the trade pillar took place on June 11 in Paris, a virtual ministerial took place July 26, and an in-person ministerial took place September 8–9 in Los Angeles.Footnote ²⁰ At the September meeting, the IPEF partners issued ministerial statements outlining their negotiation objectives for each of the four pillars.Footnote ²¹ All participants have joined all pillars, aside from, as noted, India. U.S. Trade Representative Ambassador Katherine Tai stated that: “Our intention now is to move towards negotiations with our partners on each pillar, with the first round of discussions taking place after this ministerial.”Footnote ²² An APEP ministerial is envisioned for fall 2022 following “conversation[s] . . . [with] countries in the region . . . as well as U.S. stakeholders ranging from friends in Congress to labor and industry stakeholders.”Footnote ²³

For all the similarities, there are differences too between the two initiatives. Some of these are substantive. The APEP covers two topics not mentioned in the IPEF: “Reinvigorating Regional Economic Institutions and Mobilizing Investment” and “Updating the Basic Bargain.” The first focuses on “pivot[ing] our public institutions and financing mechanisms to leverage far greater levels of private investment . . . [and] reinvigorat[ing] the hemisphere's regional economic institutions . . . including through reforms to drive climate ambition, social inclusion and private sector development.”Footnote ²⁴ The second prioritizes “[p]ublic investments and innovations in public administration” and underscores the importance of “cooperation and infrastructure investments in areas such as migration, education, health, unemployment and retirement, childcare, and women's economic empowerment.”Footnote ²⁵ An administration official, referring to these themes, said that “two fifths of [the APEP pillars] are totally bespoke to the hemisphere.”Footnote ²⁶ Other divergences between the APEP and IPEF are procedural. Thirteen states together issued the IPEF joint statement, whereas the United States alone announced the APEP.Footnote ²⁷ The IPEF thus constituted a commitment by a collective. The APEP in contrast was a unilateral declaration by President Biden, which anticipated subsequent “initial consultations with partners in the hemisphere and . . . stakeholders on [the APEP's] areas [of focus].”Footnote ²⁸ No specific APEP country partners were mentioned by the president, though an administration official indicated that discussions would “begin[] with a set of . . . . likeminded partners where . . . we already have existing FTAs. . . . This really is about kind of updating a foundation laid by the several FTAs that we have in the region.”Footnote ²⁹

There has been no shortage of criticisms of these initiatives. Not unexpectedly, China has sought to undermine them. Even before the IPEF was formally announced, Foreign Minister Wang Yi stated that “the Indo-Pacific Strategy concocted by the United States is keen on creating various sorts of small cliques by ganging up on others under the banner of ‘freedom and openness.’”Footnote ³⁰ It is, he continued, “in essence a strategy that creates divisions, incites confrontation and undermines peace. No matter how the strategy is airbrushed or disguised, it is bound to be a failed strategy.”Footnote ³¹ The China Daily criticized the APEP as an attempt to “contain China by driving wedges between China and its partners.”Footnote ³² It was, the paper continued, “the latest version of the Monroe Doctrine.”Footnote ³³ Members of Congress were no less critical, although for different reasons. A group of Republican senators argued that the IPEF, by failing to follow the trade agreement model of tariff reductions and binding commitments, would not succeed. “Advancing U.S. economic interests,” they wrote, “requires meaningful and enforceable market access commitments. . . . The lack of ambitious market-opening initiatives not only disadvantages U.S. workers, farmers, ranchers, and businesses today, it jeopardizes America's competitiveness, resilience, and security in the long-term.”Footnote ³⁴ The IPEF, these senators concluded, “is not a credible counterweight to the market-opening agreements that other countries, including China, are actively advancing.”Footnote ³⁵ A group of Democratic members of Congress expressed concern that the administration was “seeking to negotiate trade agreements without undertaking robust consultations with Congress and outside stakeholders and without respecting Congress’ constitutional authority to set the terms of foreign commerce.”Footnote ³⁶ “Previous administrations,” they noted, seemingly alluding to agreements like those with China and Japan negotiated by the Trump administration, “have attempted to skirt Congress’ authority and avoid the public scrutiny with respect to various bilateral, issue-specific ‘executive agreements.’ The IPEF and APEP mark a significant and concerning expansion of this approach to trade negotiations.”Footnote ³⁷ These members also urged the administration to maintain in the IPEF and APEP its “commitment to worker-centered trade policy” and to not “undermine the enormous progress . . . made in securing key labor and environmental provisions” in the United States-Mexico-Canada Agreement (USMCA).Footnote ³⁸

The IPEF and APEP represent a new U.S. approach to trade deals. This stems in part from the administration's view of trade's future. As National Security Adviser Sullivan stated, “we and our [IPEF] partners . . . agree that much in the coming decades will depend on how well governments harness innovation, especially the transformations underway in clean energy and the digital and technology sectors, while at the same time fortifying our economies from a range of threats from fragile supply chains, to corruption, to tax havens.”Footnote ³⁹ It stems too, as Ambassador Tai explained, from a rethinking of the assumption, fundamental to today's multilateral trading system, that “trade [is] something that needs to be liberalized maximally . . . that all we needed to do was just to trade a lot, trade more, and trade freely, in as unfettered a way as possible. And the more of these connections were generated, the more we would rely on each other, and the better off we would all be. That this was the path to a better, more secure world.”Footnote ⁴⁰ That imagined world, she said, was disrupted by Brexit, the election of Donald Trump, the COVID-19 pandemic, and Russia's invasion of Ukraine. As a result, “this ‘free trade equals good, protectionism equals bad’ dichotomy is one that . . . we need to revisit.”Footnote ⁴¹ Instead, she concluded, “what we really need to think through is how can we adapt the rules of trade to incentivize firm behavior to take into account more than just efficiency, but to promote and reward decisions that are made to pursue sustainability for our people and for our planet.”Footnote ⁴² It thus connects with a broader set of administration actions and policies centering workers and the environment put forward in the President's 2022 Trade Policy Agenda.Footnote ⁴³ And it stems from a belief that traditional market-access trade agreements are, according to Deputy Secretary of Commerce Don Graves, “things that we can't do right now given the state of politics, particularly on the Hill.”Footnote ⁴⁴

The IPEF and APEP reflect too the administration's overall China policy and its related focus on the Indo-Pacific region.Footnote ⁴⁵ A key part of that policy, Secretary of State Anthony J. Blinken announced in a major address in May, shortly after the IPEF was unveiled, is to “align our efforts with our network of allies and partners, acting with common purpose and in common cause.”Footnote ⁴⁶ The IPEF was the first example he gave. For Secretary Blinken and others in the administration, the IPEF and the APEP provide attractive counter-models to China's. The U.S. model, he declared, is “one of a free and open Indo-Pacific where rules are developed transparently and applied fairly; where countries are free to make their own sovereign decisions; where goods, ideas, and people flow freely across land, sky, cyberspace, the open seas, and governance is responsive to the people.”Footnote ⁴⁷ Ambassador Tai has made a similar point, arguing that there was “a real opportunity for collaboration between the United States and our partners here on challenges that we face together from China's non-market policies and industrial policies.”Footnote ⁴⁸ For Secretary Raimondo too, the IPEF provides “an alternative to China's approach to . . . critical [economic] issues.”Footnote ⁴⁹ The same applies to the APEP, which a senior administration official described as an “affirmative vision for the region economically” and “the best antidote to China's inroads” in the Americas.Footnote ⁵⁰