Domestic Perspectives on IPEF’s Digital Economy Component

by Aidan Arasasingham , Emily Benson , Matthew P. Goodman , and William Alan Reinsch

January 26, 2023

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The Indo-Pacific region’s digital economy is rapidly evolving. Unless the Biden administration offers a compelling vision for the future of the digital economy in its Indo-Pacific Economic Framework for Prosperity (IPEF) that addresses varied U.S. business, labor, and congressional interests, alternative models crafted by Beijing and Brussels stand to become the regional defaults. Based on conversations with representatives of nearly three dozen domestic stakeholders, this brief summarizes domestic perspectives on digital trade in IPEF. The U.S. government can enhance its chances of securing domestic buy-in for IPEF’s digital agreement by

passing comprehensive federal digital privacy legislation while also negotiating an IPEF digital component;

fostering democratic values in the digital economy, such as human rights, internet access, and democratic governance;

aiming for free data flows in line with the United States-Mexico-Canada Agreement (USMCA) and U.S.-Japan Digital Trade Agreement (USJDTA) while balancing domestic concerns;

updating digital trade language and enhancing regional cooperation on emerging technologies, such as artificial intelligence and algorithm-based workplace management software;

promoting digital upskilling, infrastructure, and inclusion at home and abroad through parallel investments in regional and U.S. workers and communities; and

seeking further input from business and labor, as well as congressional approval, to deepen consultation with and secure further buy-in from domestic stakeholders.

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