LATEST ROUND OF IPEF TALKS GET UNDERWAY: U.S. trade officials are in Bali, Indonesia, this week for the latest round of negotiations over the Indo-Pacific Economic Framework. The Commerce Department and Office of the U.S. Trade Representative have each dispatched delegates for this set of talks, which will cover all four of the agreement’s pillars: trade, supply chains, clean energy and taxes. The talks begin today and conclude March 19. The 13 countries participating in the IPEF negotiations have already floated text for many parts of the agreement, and it’s expected that even more proposals will be put on the table in the coming days. U.S. officials are pressing forward with an aggressive timeline that would see much of the agreement finished before the end of the year. Digital deal: Several industry groups are specifically eager to see progress on the chapter dedicated to digital trade. That’s expected to be one of the more consequential but also contentious parts of the pact as negotiators forge an agreement that accommodates countries at varying stages of development. Jason Oxman, president and CEO of the Information Technology Industry Council, said in a statement that IPEF represents “an important forum for the United States to push for strong digital trade commitments.” Those commitments should cover data flows, technical standards, tech supply chains and more, the group argues. Bits from Bali: Are you reading this newsletter from an Indonesian hotel room because you’re participating in or observing the talks? Your host back in chilly Washington would love to get the download from on the ground. Drop me a note. THE WORLD RECKONS WITH BANK COLLAPSE: The collapse of Silicon Valley Bank on Friday may have most heavily shaken the U.S. tech industry — sparking a chaotic weekend for companies, investors, regulators and lawmakers — but the potential for aftershocks had capitals and financial institutions around the globe also on high alert. In London, the U.K. government was scrambling on Sunday to limit the fallout for the British tech sector and developing a plan to backstop the cash flow needs of affected companies, POLITICO Europe’s Annabelle Dickson reports. The government is treating the potential reverberations as "a high priority,” U.K. Chancellor of the Exchequer Jeremy Hunt said in a statement Sunday. The International Monetary Fund also said it was keeping an eye on turbulence in the financial markets, though it told news outlets in a statement that the global finance institution’s leaders trusted U.S. authorities have the situation under control. “We are closely monitoring developments and potential financial stability implications, and have full confidence that policy makers in the United States are taking appropriate steps to address the situation,” an IMF spokesperson said in a statement. Sunday solace: Federal authorities announced Sunday night that the resolution of the bank would be completed without depositors or taxpayers bearing the cost. The action was designed to give confidence to financial markets and banks ahead of the start of business Monday. Treasury Secretary Janet Yellen said in an interview on CBS’ “Face the Nation” earlier Sunday that a federal bailout wasn’t an option and stressed that the U.S. banking system is “safe and well-capitalized.” In short, she said, this is not the 2008 financial crisis. U.S., EU BROKER A GREEN DEAL: President Joe Biden and European Commission President Ursula von der Leyen took steps Friday to shore up the trans-Atlantic relationship and show a united front against Russia’s war in Ukraine and the possibility of China providing military aid. Von der Leyen, following a meeting at the White House, told reporters they will launch talks on a critical minerals agreement that will allow EU manufacturers to qualify for more electric vehicle subsidies under the Inflation Reduction Act passed by Congress last year. The pact would allow critical raw materials, such as lithium, cobalt and nickel “that have been sourced or processed in the European Union” to be treated under IRA the same “as if they were sourced in the American market,” von der Leyen said. A breakthrough: The meeting was a positive step toward addressing trade tensions sparked by the United States’ landmark climate law and the billions of dollars in subsidies it will unleash for American industry. European countries have raised concerns that the industrial policy push by the U.S. will attract investment out of Europe where companies are facing higher energy costs because of Russia’s war in Ukraine. To address those concerns, the leaders also launched a “Clean Energy Incentives Dialogue” to better coordinate the massive subsidies that the two sides will be providing for a variety of clean tech industries under IRA and the EU’s Green Deal Industrial Plan that is still being developed. “For us, it’s important on both sides of the Atlantic to know what kind of incentives are being given to the clean tech industry,” von der Leyen said. CALIFORNIA CALLING: Biden is in San Diego, Calif., today for a meeting with U.K. Prime Minister Rishi Sunak and Australian Prime Minister Anthony Albanese. Their trilateral defense partnership, known as AUKUS, is the subject du jour. But we’ll be listening for any trade chatter on the sidelines. BEIJING TAPS NEW TRADE TSAR: The new slate of Chinese government leaders was made official over the weekend. He Lifeng is now the country’s vice premier and chief economic tsar. In that position, he’s expected to engage with U.S. Trade Representative Katherine Tai and other senior U.S. economic officials. He was described as a “confidant” of President Xi Jinping in a Reuters profile last October and was previously tasked with managing Beijing’s influential state planning agency, the National Development and Reform Commission. Fresh face: He takes over the role formerly held by Liu He. Readers will recall that Liu was Tai’s counterpart when the countries resumed discussions in October 2021 over the Phase One agreement, the Trump-era trade deal that required China to buy more U.S. exports that never fully came to fruition. But Reuters noted in its profile that Liu had an “unusually powerful portfolio” for vice premier and it’s possible that some of his duties could be redistributed to other senior leaders, including the newly installed Premier Li Qiang. What to watch: The formal installation of China’s new cabinet opens the door for meetings between senior leaders, including on trade. Tai told POLITICO in a recent interview: “Once that transition is finalized, we may be able to have a better sense for what next steps look like on trade.” BIDEN APPOINTS USTR ADVISORY COMMITTEE: The White House unveiled the new members of a committee meant to advise the U.S. trade representative on policy — roughly two years into the administration’s pivot to a “worker-centered” trade policy that focuses on labor rights and supply chains rather than tariff reduction. “Developing a worker-centered trade agenda means bringing together a range of perspectives and backgrounds to design and implement our policies,” Tai said in a statement. “President Biden has nominated a diverse group of men and women that will help us carry out his vision for sustainable, inclusive and durable trade policy in 2023 and beyond.” The Advisory Committee for Trade Policy and Negotiations dates back to 1975 and, per its charter, meets two to three times per year to give guidance on the nation’s trade negotiations and their impact on various sectors of the U.S. economy. Meet the committee: The CEO of manufacturing company Flex, Revathi Advaithi; the president and CEO of the Natural Resources Defense Council, Manish Bapna; Wilson, Sonsini, Goodrich & Rosati senior counsel Timothy Broas; international president of the United Steelworkers union, Thomas Conway; Carnegie Mellon University engineering professor Erica Fuchs; Motley Rice partner and South Carolina state Sen. Marlon Kimpson … President and CEO of the U.S. Grains Council, Ryan LeGrand; president of food and beverage company K&R Hospitality, Kerman Maddox; president of the International Brotherhood of Teamsters, Sean O’Brien; managing partner at Impact Master Holdings, Javier Saade; 360 Total Concept CEO Shonda Scott; AFL-CIO President Liz Shuler; Raleigh-Durham Airport Authority Board director Nina Szlosberg-Landis; and Corning CEO Wendell Weeks.
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