U.S. senators call for considering digital trade agreement through APEC

Washington – The U.S. Senate Committee on Foreign Relations on Friday called for pursuing through a forum of Pacific Rim economies the possibility of a digital trade agreement, amid concerns that the United States may be falling behind China in taking the lead in writing key trade rules in the region.

“We write to urge you to utilize and work with the Asia-Pacific Economic Cooperation … to encourage strong outcomes” in the next leaders’ meeting, Democratic Sen. Robert Menendez, chairman of the committee, and Republican Sen. James Risch, the ranking member of the committee, said in a letter to Secretary of State Antony Blinken.

Among the priorities the administration of President Joe Biden should work on with other APEC peers, which include countries such as Japan and Australia, are promoting a “common set of technology standards, including the possibility of a digital trade agreement,” the two said.

The letter also called for improving efficiency in semiconductor supply chains and cybersecurity as well as advancing cooperation that reduces barriers to cross-border investment in emerging markets.

The calls from the senators came as China is stepping up its trade diplomacy in the region, applying in September to join a Pacific free trade agreement currently known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, from which the United States pulled out in 2017.

The deal, involving 11 countries such as Japan and Australia plus the United States, was expected to serve as a counterweight to China’s growing economic clout. But former President Donald Trump described it as a “job-killing” arrangement.

The United States is also not part of a mega trade deal involving 15 Asia-Pacific countries including China, Japan and South Korea, which was signed in November. Beijing, meanwhile, said in November that it has applied to join an agreement between Singapore, Chile and New Zealand that aims to collaborate on digital trade.

While many experts in the United States believe it will be difficult to win a congressional majority for a comprehensive free trade agreement anytime soon, concerns are growing that the United States is giving way to China in trade-rule setting efforts.

A group of Republican lawmakers of the Senate Committee on Finance also sent a letter in November to Biden requesting that the administration begin digital trade negotiations with U.S. allies and partners in Asia to set “high standard rules” in the region.

Digital rules should be worked out to reflect American values, such as by ensuring free flows of data, promoting cybersecurity, protecting human rights and combating censorship, they said.

APEC groups Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, the United States and Vietnam.