Commerce Secretary Raimondo Spearheads Indo-Pacific Economic Framework

WASHINGTON — While Secretary of State Antony Blinken and Secretary of Defense Lloyd Austin are on their tandem investment visit to the Indo-Pacific, a third Biden administration official, Secretary of Commerce Gina Raimondo, was touting the region as an epicenter of economic growth and dynamism at the Washington, D.C.-based Wilson Center.

“The momentum, the speed, the pace, the urgency with which we are working on this [in the Indo-Pacific] is incredible,” Raimondo shared about the Indo-Pacific Economic Framework for Prosperity, which launched in May 2022.

“Biden announced IPEF in May in Tokyo,” Raimondo said, “and four months later, every country signed on to negotiate, and then a few months after that, we had complete agreement on the supply chain pillar.” 

Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam are now in the IPEF with the United States.

The initiative aims to foster economic partnerships, promote a rules-based order and bolster stability and security in the Indo-Pacific. The 14 IPEF partners represent 40% of global GDP and 28% of global goods and services trade.

Raimondo spearheads the strategy, pushing to drive progress and cooperation among nations.

“Free trade agreements aren’t in favor at the moment. … It is what it is,” Raimondo told the Wilson Center. “But yet, we must be present in the Indo-Pacific.

“These are fast-growing economies, emerging and developing economies,” she said. “We need a framework to have a strong economic strategy within these countries.” 

Through this framework initiative, the IPEF partners aim to offer tangible benefits to each other in four pillars: trade; supply chains; clean energy, decarbonization and infrastructure; and tax and anti-corruption. Though, unlike other economic partnerships, the IPEF is designed to be flexible, so IPEF partners are not required to join all four pillars, and technically, there is no enforceability. 

One of the strengths of the IPEF lies in this deliberately flexible approach, Raimondo explained. 

“Not every country has to be part of every pillar,” she said, enabling nations to participate based on their unique needs and capabilities. This inclusivity could foster a sense of collaboration, where each country contributes to the collective goal of economic growth and prosperity.

But to entice participation, as well as support the implementation of the IPEF, the State Department and the U.S. Agency for International Development are launching a deal accelerator aimed at facilitating partnerships and investments.

“The approach is not heavy handed,” Raimondo said. “It gets us to work together, offering capital, connectivity [and] data. … The end result of which is a more resilient supply chain for all of us and a real U.S. economic presence in the region.”

And while the framework is considered a nontraditional trade agreement, and doesn’t carry enforceability in the typical sense, Raimondo said its compliance and accountability lie in the fact that “countries that don’t follow the rules or live up to their commitments don’t receive the benefits.”

Overall, the most vital aspect of the IPEF is the deployment of capital into the region — with an emphasis on public-private partnerships — especially in sustainable infrastructure and clean energy projects, but also to create stronger and more resilient supply chains. It allows countries economic engagement while ensuring the protection of their interests.

Acknowledging the challenging climate for free trade agreements, Raimondo emphasized the need for the United States to maintain a robust presence in the Indo-Pacific.  

“Quite frankly, [this is about] increased economic presence by the United States in this region,” she said.

According to a White House statement, trade with the Indo-Pacific supports more than 3 million American jobs and is the source of nearly $900 billion in foreign direct investment in the United States. The Indo‑Pacific is projected to be the largest contributor to global growth over the next 30 years.

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