The US administration has dropped its plans to announce the completion of the Indo-Pacific Economic Framework (IPEF) trade terms in San Francisco this week, the New York Times reported citing government sources.

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The report said pressure from Joe Biden's Democratic party has forced the administration to pull off its hands at the last moment. Also, the current dispensation has been briefing members of Congress and foreign trading partners in recent days on its decision.

Meanwhile, Indian government sources told CNBC-TV18 that the Indo-Pacific Economic Framework for Prosperity's (IPEF) trade pillar is looking at regulatory synchronisation between the partner nation. The sources clarified that the pillar 1 is not exactly for market access, but for regulatory harmony for global investments. They added that if investments are to to come in, the regulatory structure needs to be favourable to all members. Of the 10 agenda points at the IPEF meeting, five are slightly closer to be agreed upon, while five are still far off.

Financial Times on Wednesday, citing sources, had reported that US Trade Representative Katherine Tai informed her counterparts about the administration's decision over the past two days. This comes even as officials say the countries have made significant progress in talks.

Some senators argue that while attempting to promote trade, the lower barriers could hurt American workers by encouraging companies to move jobs overseas. Some senators have announced their opposition to the deal in public.

"I've made it clear that we shouldn’t be signing new trade deals without labour protections. Glad to see the administration listened & isn't moving forward with this deal. We need to strengthen & enforce our current trade laws so Ohio workers can compete," Democratic Senator Sherrod Brown posted on X.

This list also includes another strong opponent - Congressional Senator Ron Wyden who leads the Senate Finance Committee. His opposition to this agreement rests on concern over labour and environmental standards.

“As the administration works to finalise the Indo-Pacific Economic Framework, they should not include the trade pillar," Brown said. “Any trade deal that does not include enforceable labour standards is unacceptable.”

“It’s hard to see how the politics that have guided the Biden administration’s decision-making to date change as the US presidential election approaches,” said Jake Colvin, President of the National Foreign Trade Council.

This trade agreement has long been cited as the Biden administration’s key strategy to counter China’s growing economic clout in the Asia-Pacific region. The US partners in this agreement include Indonesia, Japan, Australia, South Korea and Singapore, among others that together account for 40% of the global economy.

Some US media reports have also claimed a lack of enthusiasm among partners about the IPEF as it does not offer any US market access. However, some partners, including Japan, have hoped that it would provide a bridge to the US joining the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership - a deal that was salvaged from the Trans-Pacific Partnership agreement that the US withdrew in 2017.

IPEF, which was launched in May 2022, comprises 14 member nations — Australia, Brunei, Fiji, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Thailand, United States and Vietnam.

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First Published:Nov 15, 2023 5:12 PM IST