November 3, 2023 — The American Association of the Indo-Pacific (AAIP) has sent an urgent letter to Ambassador Katherine Tai, the United States Trade Representative, raising deep concerns over the USTR announcement last week that it has withdrawn its support for core proposals in the World Trade Organization e-commerce negotiations.

AAIP is particularly concerned that the withdrawal will have implications for the United States’ support for a strong digital chapter under the Indo-Pacific Economic Framework for Prosperity (IPEF), and that it may withdraw similar proposals in the IPEF negotiations.

AAIP Interim President Jackson Cox stated:

“The IPEF negotiations have gone through six rounds. The administration underlined early on that the agreement would effectively write the rules of the road on trade in the 21st century, but in withdrawing its support for trade rules on cross-border data flows, data localization, and the protection of source code, the U.S. will cede the field to others.

“Withdrawing support for these key provisions in the IPEF will undermine U.S. economic interests. This move not only hurts the U.S. e-commerce and technology sectors, which are significant drivers of U.S. economic growth, but all other industries that operate internationally and depend on data flows.

“The U.S. must deepen economic engagement in the region and needs to put forward rules and norms that will do precisely that—and not undermine the positive role of U.S. business across the Indo-Pacific.

“AAIP urges the USTR to clarify its position on the digital economy in the IPEF negotiations—and more broadly—going forward.”

The American Association of the Indo-Pacific (AAIP) is a member-based organization that represents U.S.-headquartered companies that have operations across the Indo-Pacific region. AAIP manages the IPEF Taskforce and has supported the IPEF from the start by bringing technical and practical recommendations forward and encouraging bold and binding IPEF agreements.