WASHINGTON, D.C., July 6, 2023 — A report published today by the American Association of the Indo-Pacific (AAIP) underscores the imperative of robust digital trade standards in the upcoming Indo-Pacific Economic Framework (IPEF) agreement negotiations, advocating for their vital role in economic growth in the U.S. and Indo-Pacific region, particularly for small enterprises.

Jackson Cox, the Interim President of AAIP, said, "Global commerce now thrives on the digital economy. This is where innovation breathes and inclusivity thrives. Digital trade is a powerful tool that can revolutionize the growth trajectory of MSMEs, as well as women- and minority-owned businesses."

The AAIP report emphasizes the importance of upholding the strong standards outlined in the United States-Mexico-Canada Agreement (USMCA) in the IPEF. Cox noted, "The USMCA serves as an effective model that guides IPEF countries in the evolution of digital regulations, fostering cross-border data flows and creating a balanced framework." He strongly cautioned against diluting these commitments, stating, "Any move to soften these rules could inhibit U.S. economic interests and limit our competitiveness in a sector that's pivotal for our growth and innovation."

Warning against the risks of not reaching an agreement on the IPEF, Cox said, "In the absence of a firm agreement on the IPEF, we risk ceding rule-making to other countries and blocs that may not share our vision for a vibrant, competitive digital economy."

While advocating for firm standards, the report recognizes the need for flexibility for IPEF members to adhere to higher benchmarks. "While maintaining a high bar, we understand the necessity for phased adaptation, technical assistance, or other flexibilities to ensure broader participation," Cox noted.

Discussing the potential impact of a weak digital chapter, Cox said, "The IPEF presents an incredible opportunity for promoting a liberal and open approach to digital trade across the Indo-Pacific region. But if negotiators veer toward a restrictive or even 'lowest common denominator' approach, it could significantly impede U.S. companies operating in the region."

With the upcoming IPEF negotiations in Busan, the AAIP urges all parties to prioritize a robust digital trade chapter that fosters future economic growth, sparks innovation, and champions inclusivity in the global economy.

Click here to download the IPEF report, “Digital Trade: The IPEF Keystone”

For further information, to request a copy of the full report, or to speak to AAIP’s experts, contact:

Jackson Cox, Interim CEO
president@americanindopac.com

Khalil Manaf Hegarty, Senior Policy Advisor
policy@americanindopac.com