Commerce Secretary Raimondo Talks About New Indo-Pacific "Economic Framework"

During an interview at the Bloomberg New Economy Forum in Singapore Wednesday, Commerce Secretary Gina Raimondo was asked to clarify the U.S. approach to trade relations in Asia, including its interest in the CPTPP or some alternative, and China's role in this regard. In response, she explained that the United States would be pushing for an agreement that, while not a free trade agreement, would address issues such as supply chains, digital trade, tech standards, interoperability, and decarbonization. She also indicated that "[w]e're likely to launch ... a more formal process in the beginning of next year, which will culminate in a proper economic framework in the region."

In a TV interview earlier in the week, Raimondo had been quoted as saying that while the United States would not be rejoining the CPTPP, it nevertheless envisions an economic framework that "could be even more robust in some ways than the traditional free trade agreement," and that "[w]e look forward to signing an agreement with the economies in the region which is a robust economic framework." In response to questions at the Bloomberg forum asking to clarify these statements, she emphasized a number of points.

First, while the United States will not be rejoining the CPTPP, "[w]e are very serious in reengaging economically with the Indo-Pacific." She said that the topics covered would be "broader in some ways, and a little bit less restrained or constrained than a traditional Free Trade Agreement," and she cited issues such as supply chains, digital trade, tech standards, interoperability, and decarbonization.

When asked if this is "the trade equivalent" to a "coalition of democracies," with "America and its allies in Asia, getting together in an economic way," and involving "a series of kind of complicated alliances," Raimondo said it was "exactly that."

She also said that "[w]e're likely to launch ... a more formal process in the beginning of next year, which will culminate in a proper economic framework in the region," and that the process would involve an "actual agreement."

In respect of China's interest in joining the CPTPP, she noted that "China is going to do what China is going to do. And whether or not the current members of CPTPP allow China to come in, that will be as it will be."

The full text of the exchange is below.

Q:

You said in Japan that you wanted to form an economic framework that would be even better than CPTPP, or the Comprehensive and Progressive Agreement for Trans Pacific Partnership. And you said it'd be even more robust in some ways than the traditional free trade agreement. And this is this Indo Pacific framework, which America has been talking about. And I think many of the business people here would say, "Look, we would rather have a trade pact. That's what we want." And I know that's difficult politically. But maybe you could spell out exactly what this means and why it is better.

Raimondo:

Look, I understand that. You know, I began my week in Tokyo, I'm here now, I'll be heading off to Malaysia. I'm meeting also, while I'm here, with my counterparts from New Zealand and Australia. And we hear that, you know, CPTPP, we want America in.

Here's what I would say. For various reasons, you know, that is not going to happen now.

But President Biden is crystal clear. When he says America is back, he means back with our allies, and back in this region. So since he's been in office, the Vice President has been in Vietnam, the Secretary of Defense has been here, I am here. USTR Tai is here. We are very serious in reengaging economically with the Indo Pacific. And when we talk about the topics, it is broader in some ways, and a little bit less restrained or constrained than a traditional Free Trade Agreement. For example, we can talk about partnerships around the supply chain, specific partnerships around working together to make sure that we and our allies in the region have a redundant and secure supply chain. You know, Australia has critical minerals that we all need. We can talk specifically and somewhat more flexibly about partnerships.

Interoperability, which is critical to facilitate digital trade, tech standards. You know, we were talking backstage about artificial intelligence. You know, you wouldn't see setting tech standards in a traditional free trade agreement, but it is vital. Who's going to write the rules of the road for emerging technology. We want to write the rules of the road with our like minded allies in this region. Semiconductors ... decarbonisation and green ...

Q:

Should we see this as sort of the trade equivalent of what people talked about, at one time, have a kind of coalition of democracies, this is America and its allies in Asia, getting together in an economic way, which does not involve a specific trade pact, but which involves a series of kind of complicated alliances building up to that.

Raimondo:

I think that is well said. And, you know, I'm here in the region, beginning the discussions, laying the groundwork. We're likely to launch, you know, a more formal process in the beginning of next year, which will culminate in a proper economic framework in the region.

Q:

And does that mean an actual agreement?

Raimondo:

Yeah, exactly.

Q:

Do you accept that part of the cost of this is, as you know, China, and for that matter, Taiwan, that both applied to join the CPTPP, that that could be a consequence of it, that China becomes part of the trade agreement that America left under Donald Trump?

Raimondo:

Yeah. So I will say this, China is going to do what China is going to do. And whether or not the current members of CPTPP allow China to come in, that will be as it will be. What I'm talking about is working with our allies in the region, allies we've had for decades, in an incredibly important and fast growing region. In the Indo Pacific 940 million people are entering the middle class in the next seven to 10 years. You know, it's 4.6 billion people. Here in Singapore, some of the best innovation and technology in the world. So this isn't about China. This is about developing robust commercial and economic relationships with our partners in the Indo Pacific where we have had a robust relationship for a long time, but for the past few years, I mean, the elephant in the room, the reality is, America has been absent, largely absent in the past few years. And when I am here in the region, there seems to be a strong pull to have us back. And so we want to work towards this agreement.