President Joe Biden last month announced a new trade deal with 12 countries in the Indo-Pacific Economic Framework (IPEF), representing 40% of the world GDP.
The deal, though, was missing its most consequential component. After years of negotiations and days before the announcement, the U.S. pulled out of the agreement’s trade provisions.
What You Need To Know
- The U.S. pulled out of the “trade pillar” of the Indo-Pacific Economic Framework (IPEF) days before last month’s Asia-Pacific Economic Cooperation Summit
- The action was largely due to pushback from Sen. Sherrod Brown, D-Ohio
- The Biden administration says they will continue discussions on the trade pillar
The action was largely due to vocal pushback from Sen. Sherrod Brown, D-Ohio. Brown said the agreement lacked sufficient labor standards, which would allow foreign manufacturers to pay workers less and thus put Ohio manufacturers on an unfair playing field.
In recent decades job outsourcing has hurt manufacturing in Rust Belt states, hitting Ohio the hardest. In 1990, 22% of Ohio’s jobs were in manufacturing. By 2022 that number had fallen to 12 percent, representing hundreds of thousands of jobs lost.
“I’m thankful that they backed off of the so-called ‘trade pillar,’” Brown said. “We saw by boneheaded decisions and sellouts by presidents of both parties, we saw what that did to our manufacturing companies, what it did to our communities, what it did to so many workers and their families.”
Brown also has political reasons to oppose the trade deal. His comments come as the Democrat heads into a reelection bid next year in an increasingly red state where worker protections are popular with voters.
The Office of the United States Trade Representative said the framework’s other three pillars—supply chains, tax and anti-corruption, and clean energy, decarbonization and infrastructure—would “advance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness for our economies.”
The White House has been hesitant to criticize Brown’s tanking of the deal’s trade pillar, highlighting the importance of his race in maintaining a Democratic majority in the Senate, especially in light of Democratic Sen. Joe Manchin’s retirement announcement.
“Places like Ohio, Montana and Arizona, where you have Democratic-held seats that are extremely important for the Democratic Party to hold because with Manchin going, Democrats have to save every single seat that’s up for reelection,” said Dave Cohen, professor of political science at the University of Akron.
Pro-trade groups have slammed the about-face on the trade pillar, saying it would hurt U.S. workers in the long term.
The U.S. Chamber of Commerce wrote in a May letter supporting the deal,
“A “worker centric” trade agenda must reflect how American companies and the workers they employ suffer together when we are barred from selling the goods and services we produce in foreign markets.”
The Biden administration has stressed that discussion will continue on trying to salvage some of the agreement’s trade provisions.