NVDB005_-_CH_4.002._RCEP_CPTPP_and_IPEF_all_coexist_-_Zhang_Weiwei-3

Diplomatic Briefing — KAS Cambodia and CICP

78 — DP Vol. 05

RCEP, CPTPP and IPEF all coexist, where does Asia-Pacific economic cooperation go from here?

CPTPP on the other hand focuses on higher levels of liberalisation and stricter rules, mainly reflecting the interests of developed economies. The average percentage of trade categories in which member countries have achieved zero tariffs stands over 99%, while the transition period is also short, with more than 85% of product areas immediately witnessing the implementation of zero tariffs. On digital trade, the CPTPP establishes the basic principles of free cross- border data transmission, the removal of localised storage restrictions and the protection of source code. In terms of intellectual property protection, the protection of patents, trademarks and trade secrets has been increased. In relation to state-owned enterprises, a broader definition of “state-owned enterprise” was developed, requiring production and operation to be based on “commercial considerations” and subsidies received to not harm the interests of other member states. In relation to environmental protection, specific obligations were put forward in a number of environ- mental areas. The CPTPP also imposes stricter labour standards and more complex and stringent rules for defining the origin of products, while the IPEF, in line with the Biden administration’s economic policy objectives, focuses on four main areas of so-called “high standards”. The “connected economy”, “resilient economy”, “clean economy” and “fair economy” are

the four pillars of the IPEF. The four pillars of the IPEF include digital trade, supply chain security, renewable energy, taxation and anti-corruption policies, which also encompass “high standards” in the areas of labour and environmental protection. Without ceding US market share, the IPEF will help US companies to more fully mobilise the resources of Asia-Pacific countries and gain an advantage in competitive markets.

RCEP, CPTPP and IPEF together represent a contest between two strands of power in Asia-Pacific regional economic cooperation. One is the demand of regional countries, especially developing countries, to strengthen economic integration and achieve common development, while the other is the “high standard” cooperation model strongly implanted by the US. The CPTPP, which originated from the US TPP initiative, was made more balanced after the US withdrew, freezing 22 provisions in the original TPP text that the US had insisted on and others opposed, reflecting the pursuit of higher levels of trade liberali- sation by the more economically advanced members of the Asia-Pacific region. In contrast, the IPEF has the strongest ‘American flavour’. Official US documents make no secret of the benefits that the framework will bring to US households, but the benefits to Asia-Pacific countries are so far unclear.