Legal Expert Looks at the Future of Trade Agreements
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The structure of trade agreements will play a critical role in shaping the future of supply chains, especially amid a shifting sourcing landscape. That’s according to Nicole Bivens Collinson, president of international trade and government relations at Sandler, Travis & Rosenberg P.A., who joined Sourcing Journal’s Global Outlook last month.
Covering 40 percent of the world’s GDP, the Indo-Pacific Economic Framework includes Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand and Vietnam, as well as the U.S., with Canada, Bangladesh, Laos, Myanmar and Cambodia expressing interest in joining. Despite the breadth of the framework’s reach, Bivens Collinson said little is known of what the deal announced in May last year actually entails. “It’s something that everyone wants to know, because no one is really quite sure exactly what it is,” she said.
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The fine points of the deal are still being hashed out after three rounds, with a fourth round in South Korea later this year. Outside of India, all partners have agreed to the main pillars laid out in IPEF, which include trade, supply chain resiliency, clean energy and decarbonization, and taxation and anticorruption measures.
The trade agreement overlaps to some degree with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which the U.S. abandoned during the Trump administration. IPEF now represents the main U.S. economic initiative in Asia, aiming to unite member nations and “promote sustainability, resilience and inclusiveness,” USTR Katherine Tai said earlier this year.
IPEF countries have so far “substantially concluded” negotiations on the supply chain pillar, U.S. Commerce Secretary Gina Raimondo reported in May. A supply chain council, crisis response network and labor rights advisory board will be established after domestic consultations and a comprehensive legal review in the coming months.
The U.S.-Taiwan initiative on 21st Century Trade is a trade agreement that “could be causing some consternation between the United States and China’s relationship,” Bivens Collinson said. The deal developed last year covers customs administration and trade facilitation, good regulatory practices, services, domestic regulation, anti-corruption and small-and-medium-sized enterprises.
The legislation was borne “outside of the normal framework” for a U.S. trade agreement, Bivens Collinson said, in that Congress hasn’t given President Joe Biden authority to negotiate it. “There’s a bit of a push and pull between Congress and the administration right now,” she added. In June, the Senate Finance Committee and the House Ways and Means Committee approved legislation to reassert the role of Congress as the sole authority over international trade. House lawmakers voted to approve the first drafted agreement, which will streamline customs, fight corruption and help SMBs navigate regulations across both markets. While it aims to bolster the relationship between the U.S. and Taiwan, it does not include market access provisions.
