US Should Look South, Not Far East, on Trade Pacts
Many economies in the Americas already have bilateral free trade agreements with Washington, offering a stronger base for nearshoring, deeper integration and higher standards.
For more and better trade, Tio Sam should look south.
Photographer: Mark Felix/Bloomberg via Getty Images
The Indo-Pacific Economic Framework for Prosperity (IPEF), a 14-country effort to deepen economic ties with Asia, has become the Biden administration ’ s signature trade initiative. Yet as regional agreements go, the Americas Partnership for Economic Prosperity (APEP), its Latin American complement, holds greater potential. If the US government truly wants to shift trade and secure supply chains, it should zero in on the economies closer to home.
Launched within two weeks of one another, the two trading and investment frameworks are both responses to China’s play for global influence. Both bring together a good number of countries: IPEF counts 14, including Australia, India, Indonesia, Japan, South Korea, Singapore, and Vietnam, and APEP numbers 11, among them Canada, Chile, Colombia, Mexico, Panama, and Peru. The negotiations focus on similar issues: securing supply chains, decarbonizing economies, setting digital rules and other worthy goals. Each allows participants to pick and choose their commitments, many of which are voluntary, setting norms rather than enforceable policies. Both are mum on the more traditional elements of trade agreements such as tariffs and market access, thereby keeping Congress out of the mix — another example of what scholar Kathleen Claussen calls “trade executive agreements.”