Complexities of negotiating trade arrangements

The Indo-Pacific Economic Framework (IPEF) has got a lot of attention in recent times. The reasons are many - the composition of the participants, geo-political ramifications, the nature of the arrangement as compared to a traditional free trade agreement, the subjects it intends to cover and the potential it has for the future as a template for high-standard trade arrangements.

What got my attention this week was a brilliantly written piece by Stephen Olson on the challenges of the United States in implementing the IPEF framework. Titled "Indo-Pacific Economic Framework - Negotiating and Implementing challenges for the US", it covers a range of issues surrounding the IPEF. It brings out how domestic interests impact international negotiating positions, the different approaches of trade negotiation (a traditional free trade agreement with binding rules and dispute settlement as compared to a low standard setting arrangement without enforceability), how trade policy, strategies, priorities and approaches can change at the national level over time based on national interest, the diversity in international negotiation strategies (single undertaking versus silo approach), the novelty of non-market access trade negotiations and non-trade issues in trade negotiations. 

Another interesting aspect is the tension between supporting one's business interests in a multilateral/plurilateral forum and domestic opposition to those very businesses. This is especially seen in the tech sector with Big Tech (making digital trade rules to further national players/companies vis a vis domestic regulatory control concerns from within). This tension is brought out here by the piece:

In order to ensure at least a requisite level of domestic US support for the digital provisions of the IPEF, US negotiators will need to structure nuanced positions that will be acceptable to both Big Tech and the various interests that would like to reign them in. The IPEF negotiating partners are unlikely to accept these US proposals at face value and will counter-propose modifications or alternative provisions. Any digital agreement the US is ultimately able to secure with its IPEF partners could prove to be far from acceptable to one or more of the strong advocacy interests in the US that will pore over every small detail in the digital trade section of the agreement. 

Such tensions are common in international trade negotiations. Whose interests is one pursuing in trade negotiations? How does one balance consumer interests, State regulatory control and business interests while pursuing a negotiating position? Does it depend on the sector and the weight of the business interests or does consumer interest override business interests. How do we take care of middle level and small business interests in trade negotiations? What role do business associations play in this canvas?

Hat tip to R.V.Anuradha for a reference to the above piece that caught my attention.