Raimondo Says Most of IPEF Negotiations Should Conclude by Late November
Commerce Secretary Gina Raimondo, whose department is responsible for three of the four pillars in the Indo-Pacific Economic Framework, told a think tank audience that she is "determined to finalize agreements with all of these countries on all three pillars I’m managing" by a summit at the end of November. The IPEF, which does not liberalize tariffs but does seek to lower non-tariff barriers in its trade pillar, also includes a tax and anti-corruption pillar, an infrastructure and decarbonization pillar, and a supply chain pillar, which was already agreed to earlier this year.
Raimondo, whose question-and-answer session was interrupted by climate change activists during the July 25 event at the Wilson Center in Washington, spoke with Sadek Wahba, chair of the think tank's Wahba Institute for Strategic Competition and a major private equity investor in sustainable infrastructure in IPEF countries. Raimondo told Wahba she would like to have more investment commitments like his to announce by November, as well.
Wahba said "free trade agreements are not in favor these days," and noted that it's not just higher tariffs on Chinese imports, but that the U.S. also hiked tariffs on European exports and that there are more barriers between the European Union and the U.K. since the U.K. exited the EU.
"You're right, free trade agreements aren’t in favor at the moment," Raimondo said. "Some people think that’s a bad thing, some people think that’s a good thing … it is what it is."
She said the previous administrations neglected economic engagement in the IPEF countries, which she said are fast-growing economies, "chock-full of innovation."
Although Raimondo acknowledged that IPEF is not enforceable in the same way that the Trans-Pacific Partnership and other traditional trade agreements are since there are no tariff benefits to suspend in response to violations, she also said that having a more flexible agreement that addresses a few specific problems allows negotiators to move faster.
She said, "nothing happened to TPP [negotiations] in a matter of months."
Raimondo added that her pillars matter to trade and investment. "Every American company I talked to says we would do more business in, fill in the blank -- India, Indonesia, Malaysia, Thailand -- if there were less corruption, a fair court system, tax structure that is fair and transparent and consistent." She said pillar four addresses those problems, and that the countries want foreign investment so they can "race towards a carbon-free world."
Wahba asked Raimondo about competition with China, and she said she plans to travel to China later this summer. She said "we need to do business with China wherever we can," adding, "but we need to protect where we must."
Raimondo said she wants to promote exports of food, entertainment and health and beauty products to China. "There’s a lot of benefit to doing business where we can," she said. But she added that the Commerce Department must decide which technologies -- whether it's artificial intelligence, software, hardware, or semiconductors -- can't be sold to Chinese customers, because the Chinese government wants to use those technologies to advance their military capability.
"We need to have eyes wide open about the threats of strategic competition," she said, but said that the best thing the government can do is invest in U.S. productiveness, such as the Chips Act. Federal investment "doesn’t get enough attention when we say: 'How are we going to compete with China?' Bet on us," she said.