Pacific Trade Pacts Reconciled?

The global trading system stands at a crossroads with the emergence of two significant trade frameworks in the Pacific region. During a panel discussion in the Trade Winds event series on Wednesday, experts and former trade officials from the United States and South Korea discussed the roles and potential impacts of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Indo-Pacific Economic Framework (IPEF).

The panel said that both frameworks have the potential to address pressing and long-term challenges in the global trading system.

South Korea's former Trade Minister, Yeo Han-koo, emphasized that the IPEF could be particularly effective in managing new supply chain shocks, a task not fully addressed by current free trade agreements.

Former acting deputy U.S. Trade Representative Wendy Cutler agreed, suggesting that the IPEF and CPTPP could coexist and benefit a shared group of seven countries. However, Cutler noted a level of confusion among IPEF member countries regarding the specific trade benefits that the agreement could offer.

Eunice Huang, Head of Asia-Pacific Trade and Competitiveness Policy at Google, pointed out the opportunity for the IPEF to supplement areas not adequately covered by the CPTPP, such as digital trade, data flows and storage, and cybersecurity.
However, potential challenges were also identified, with Yeo cautioning that the IPEF must avoid becoming a tool of American unilateralism and respect the interests of all its Asian partners.

The discussion concluded with a consensus that integrating the two frameworks to maximize their collective benefits could be the most productive way forward. The event was part of the Trade Winds series of the Peterson Institute, which explores the evolving landscape of international trade in the Pacific region, with particular focus on the potential of these two major trade frameworks.

[Link to Event]