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A Look at IPEF’s Technology Alliance

May 30, 2022
  • Tang Xinhua

    Associate Researcher, Tsinghua University’s Institute of International Relations

The Indo-Pacific Economic Framework, or IPEF, was formally launched by 13 founding countries during U.S. President Joe Biden’s recent visit to Japan. It’s a plan to advance the five pillars of the U.S. Indo-Pacific Strategy: a region that is open, connected, prosperous, secure and resilient.

Strategically, the goal of the IPEF is to develop an asymmetric technological power advantage and environment for long-term competition with China, and then to build a new rules-based Indo-Pacific order. To promote the framework, the U.S. has incorporated into it the common values of freedom and openness and established a multilayered, multi-functional technology alliance based on those. It has constructed a rules-based barrier to restrict the flow of innovation to China through the formulation of digital trade rules. It has also worked to promote high-tech investment standards as a substitute for Chinese infrastructure investment and to compete for control of high-tech supply chains in the name of making them more resilient. 

Digital trade rules 

The U.S. established the IPEF with a focus on the Indo-Pacific digital economy. The primary issue to be addressed is the construction of cross-border data flow rules in the region. The IPEF proposes creating high-standard rules of the road in the digital economy, focusing on developing standards for cross-border data flows and data localization.

To make this happen, the U.S. Department of Commerce is actively promoting reform of the APEC Cross Border Privacy Rules, with CBPR becoming a ready-made alternative to the rules for cross-border data flows in the Indo-Pacific — a process that will continue to advance at this year’s APEC meetings and at the APEC annual meeting the U.S. will host in 2023.

In addition, based on so-called democratic values, the U.S. divides countries and their enterprises into multiple digital trust levels in accordance with politics and governance, echoing the multilayered structure of technology alliances and partnerships that have different alliance levels corresponding to different technology trust levels, and different technology trust levels determining data elements of varying importance for cross-border flows. Such rules for cross-border data flows will serve as the basic framework for the U.S. to construct a global data transfer mechanism on a broader scale. 

Infrastructure standards 

Infrastructure development in the Indo-Pacific is in a critical period of explosive growth. Reshaping infrastructure standards has thus become an IPEF pillar.

First, green infrastructure standards. IPEF proposes to strengthen cooperation in clean energy, decarbonization and other infrastructure. The Japan-U.S. Clean Energy Partnership, the Japan-U.S. Climate Partnership, the Japan-U.S. Clean Energy and Energy Security Initiative and the Japan-U.S.-Mekong Power Partnership have been established. The Quad (U.S., Japan, India, Australia) has launched the Green Shipping Network and the Clean Hydrogen Partnership.

Second, digital infrastructure standards. To hedge against China’s competitive advantage in 5G technology and products, the U.S. has brought together allies to promote Open-RAN 5G alternatives based on open-standard interfaces. It is promoting the standard through the U.S.-Japan Competitiveness and Resilience (CoRe) Partnership. The Future Internet Manifesto, released in April by the United States and 60 global partners, is essentially an internet within the global internet in which the United States joins allies and partners to develop trusted digital standards based on values and sets the rules that will dominate the global digital economy. 

High-tech supply chains 

To compete for advantages in high-tech supply chains and fill supply chain gaps, the U.S. is actively building technology alliances strategically, rather than basing them on the natural industrial ecology in areas such as semiconductors and critical minerals. The IPEF proposes new supply chain agreements to rapidly develop early-warning systems for critical supply chains.

In April 2022, the U.S. called for the establishment of a Chip Quad Alliance (Chip 4) with Taiwan — together with two countries, the Republic of Korea and Japan — to create a global semiconductor supply chain that excludes the Chinese mainland. Through CoRe, the U.S. and Japan are further strengthening cooperation in supply chains for semiconductors and critical minerals, while the U.S. and the new ROK government have established a strategic economic and technology partnership to enhance cooperation in resilient supply chains for semiconductors, batteries and critical minerals.

Under the IPEF, the U.S. has gathered a wide range of allies and partners in the Indo-Pacific to actively shape technological, economic and trade rules based on technological alliances, thus gradually building a tiered pyramid of technology rules without the participation of China. The emergence of the IPEF signals that competition in the Indo-Pacific based on techno-political strategy is threatening the security and stability of the region and poses a new challenge to the international system based on the United Nations and the international order based on international law.

Science and technology innovation drive the progress of civilization, and the progress of civilization in turn brings sci-tech benefits to all of humanity. To effectively address the clash of civilizations, it is necessary to follow the trend of the times — peace, development, cooperation and mutual benefit — and to adopt a new common approach to security that is comprehensive, cooperative and sustainable. Outdated Cold War mentality should be abandoned. Unilateralism should be opposed. Nations should refrain from bloc politics and camp confrontation while cooperating to create a new phase of international teamwork in science and technology innovation. 

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