Japanese trade minister Yasutoshi Nishimura and U.S. Commerce Secretary Gina Raimondo agreed Wednesday that the two countries will aim to launch formal negotiations under an Indo-Pacific initiative that seeks to build a rules-based economic order in response to China's rising clout in the region.
Nishimura and Raimondo held talks a day before ministers from 14 member countries of the Indo-Pacific Economic Framework, or IPEF, hold a two-day meeting in Los Angeles, its first in-person ministerial session, in which they are expected to declare the start of formal negotiations for the U.S.-led initiative.
Since IPEF is not a conventional trade deal, market access and tariff cuts are off the table.
Instead, it focuses on setting high standards in new areas like the digital economy and strengthening supply chains for semiconductors and other strategically important materials, especially as Russia has curbed energy supplies to Western countries in retaliation for the imposition of sanctions over its war in Ukraine.
Besides the Ukraine crisis, the vulnerability of the chip supply chain has come under increasing scrutiny as the coronavirus pandemic has driven a global shortage of the essential components used in various products, from smartphones to cars.
"We would like to build a framework capable of addressing challenges in the 21st-century economy, including supply chain resiliency and decarbonization, among others," Nishimura, minister of economy, trade and industry, told reporters after the talks with Raimondo.
The Japanese and U.S. ministers also affirmed that cooperation and rules are essential in the framework to realize a high-quality and inclusive membership, according to Nishimura.
In a separate meeting, Nishimura and New Zealand's trade minister Damien O'Connor reached a similar agreement, according to Nishimura.
Earlier Wednesday, U.S. Trade Representative Katherine Tai, co-host of the IPEF meeting with Raimondo, underscored the benefits the framework will bring to the region.
"What we're really trying to do is -- in partnership with these other countries -- to establish rules to create workstreams" that will allow members to promote "sustainability, resilience, and inclusive prosperity for our economies and for this region," Tai said in an online event.
The launch of the framework aspiring for high economic standards was announced during U.S. President Joe Biden's visit to Japan in May and is shaping up as a key part of his administration's strategy for the Indo-Pacific.
In the IPEF meeting, the member states are expected to discuss the framework's four pillars -- trade, supply chain resiliency, clean energy and decarbonization, as well as measures against tax avoidance and corruption -- in preparation for launching formal negotiations.
In a demonstration of the framework's flexibility, members can choose to join one or more of the pillars.
Among the four pillars, supply chain issues are "where we're really seeing countries respond to wanting to partner with the United States," a senior Biden administration official told reporters.
The member states plan to release a ministerial statement at the end of the meeting, including a list of countries participating in each of the four pillars.
U.S. business leaders are looking for the L.A. meeting to deliver a roadmap that offers prospects for commercially-meaningful commitments on trade and supply chain issues of vital products such as semiconductors and critical minerals.
The 14 current IPEF members -- Australia, Brunei, Fiji, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand, the United States and Vietnam -- account for about 40 percent of world gross domestic product.