Reimagining the Trans-Pacific Partnership

This week in Australia, the United States and 13 other countries are holding their first negotiating session of the Indo-Pacific Economic Framework for Prosperity (IPEF), an initiative designed to underscore the strong U.S. economic commitment to the region.  Such efforts are long overdue.   

China has substantially stepped up its game in the Indo-Pacific in recent years, including this year’s entry into force of the Regional Comprehensive Economic Partnership (RCEP), the largest trade agreement in the world.  This pact cuts tariffs, harmonizes standards and establishes rules of trade among 15 members, including key U.S. allies like Australia, Japan and Vietnam. This makes it easier for RCEP participants to buy Chinese products instead of American ones, easier to link supply chains with China than the United States, and harder for the United States to promote its market-based economic model, environmental stewardship and respect for workers’ rights, among other core values.   

The Biden administration is focused on reversing this troubling trend with the IPEF through work on resilient supply chains, the digital economy and clean energy. But by not including tariff cuts and related market access provisions, IPEF lacks an important tool to fundamentally shift supply chain decisions, promote U.S. agriculture and manufacturing exports, as well as incentivize other countries to embrace our rules and standards.  

The administration’s increased attention to the region provides an opportune time for U.S. policymakers to reconsider the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP is a trade agreement (previously known as TPP) that the United States pursued previously to remove thousands of tariff and non-tariff barriers to U.S. goods and services and help us promote our market-based economic model and values in the Pacific region.   

A return to the CPTPP would provide an immediate boost to U.S. competitiveness and geopolitical influence. However, the CPTPP also has some serious shortcomings, which led the United States to withdraw from the original agreement in 2017. This includes automotive rules of origin that would allow significant Chinese content in vehicles shipped duty-free to the United States, labor and environmental provisions that fall short of more recent U.S. trade agreements and insufficient elements to fully address non-market economy practices.  

In light of these shortcomings, we do not believe that the United States should rejoin the CPTPP as it now stands, but merely dismissing the agreement is also a mistake. Indeed, the important question for U.S. policymakers to consider is whether it is possible to revise the agreement to meet American interests. We believe that we can.  

To help start the conversation about whether CPTPP can be renegotiated to facilitate potential U.S. re-entry, the Asia Society Policy Institute convened a bipartisan group of leading trade experts to come up a list of needed changes and we tested our ideas with a broad range of stakeholders in the United States and abroad.   

In a new report, “Reimaging the TPP” we identify 12 areas where improvements can make the CPTPP stronger, drawing on the recent bipartisan United States-Mexico-Canada (USMCA) Trade Agreement, IPEF work and other regional agreements.  Among our key recommendations include strengthening provisions on rules of origin, labor, environment and currency; modernizing and enhancing provisions on intellectual property and digital trade; as well as adding new provisions to address supply chain issues and problems associated with non-market economies.   

We do not purport to have all of the answers, but we ultimately believe that a revised CPTPP that includes the changes recommended would meet U.S. economic and strategic interests and could ultimately garner bipartisan support from the U.S. Congress and the American people. Further, we believe that these ideas — although difficult to achieve in some cases — would be viable for current CPTPP participants.   

Just as Democrats and Republicans came together to support USMCA — in itself a renegotiation of an agreement that many believed was seriously flawed — we can do the same with a revised CPTPP. Long-term U.S. economic competitiveness and national security depend on it.  

Wendy Cutler is vice president of the Asia Society Policy Institute.

Clete Willems is a partner at the multinational law firm Akin Gump and an Atlantic Council senior fellow. 

This piece has been updated.