Liberty Mutual Insurance Issues Public Comment to U.S. Trade Representative

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WASHINGTON, April 18 -- Liberty Mutual Insurance, Boston, Massachusetts, has issued a public comment to the Office of U.S. Trade Representative. The comment was written on April 11, 2022, and posted on April 14, 2022:

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From: Liberty Mutual Insurance

To: Office of the U.S. Trade Representative

Re: Comments on the Indo-Pacific Economic Framework

Liberty Mutual Insurance (LMI) appreciates the opportunity to comment on the Biden-Harris Administration's proposed Indo-Pacific Economic Framework (IPEF). By way of introduction, LMI is the largest U.S. based global property and casualty (P&C) insurer, and sixth largest global P&C insurer overall. We provide an array of consumer and commercial products in the U.S. and globally, and we have significant existing business operations in Australia, India, Malaysia, Singapore, Thailand, and Vietnam, focused on serving customers in that region.

General negotiating objectives for the proposed agreement

* Due to the highly regulated nature of the insurance industry and the importance of proximity to customers, U.S. insurers that wish to operate in a foreign market often have no choice but to establish a local presence in the market. For that reason, amongst others, binding rules subject to dispute settlement are critically important for U.S. insurers.

* We understand that consideration is being given to allowing states to choose a la carte the IPEF modules that they wish to join. In that scenario, it will be important to ensure that a state that joins any module - including the module on fair and resilient trade - agrees to negotiate and be bound by high-standard rules, and further, that all the rules negotiated in the module apply to all states participating in that module. In addition, there should be on-ramps for states that are not prepared to agree to join a module on these terms to join later - for example, provisions calling for future negotiations.

* Based on prior trade-related initiatives we have observed, it seems important to provide incentives for states to agree to join the trade module - which is a major priority for the U.S. government and stakeholders - because some states may otherwise be inclined to join other modules and omit the trade module.

Labor-related matters

* The IPEF trade module should recognize and support meaningful labor rights protections that raise living standards and ensure a level playing field.

Environment and climate-related matters

* P&C insurers like LMI are at the forefront of addressing risks associated with climate change. By facilitating the removal of barriers for U.S. insurers in the Indo-Pacific region, the IPEF trade module can enable consumers and businesses to better protect themselves from disruptions resulting from climate change.

* The IPEF trade module should facilitate public-private coordination to improve climate-related data collection and monitoring. This could include joint efforts to help build physical climate databases in the region, which are important to resilience efforts, but which often are lacking or weak in countries that have low insurance uptake and for hazards that are not insured.

* Lastly, the IPEF trade module can and should support a just transition with respect to climate.

Digital economy-related matters

* The IPEF trade module should establish high-standard digital disciplines based on the USMCA and the U.S.-Japan Digital Trade Agreement, including disciplines related to data flows and cybersecurity. The United States should also mine innovative provisions from the Digital Economy Partnership Agreement, the Singapore-Australia Digital Economy Agreement, the UK-Singapore Trade Agreement, and other recent agreements that, for example, address artificial intelligence and other emerging technologies.

* Importantly, these digital rules should fully apply to the insurance sector.

Transparency and good regulatory practice issues

* The IPEF trade module should include binding rules to promote transparency and accountability in the development and implementation of regulations on services and technologies. It should also provide adequate notice and consultation periods to encourage robust stakeholder engagement.

* It would be prudent to use the provisions in the USMCA transparency and good regulatory practices chapters (and provisions tailored for the insurance sector and the broader financial services sector in the USMCA financial services chapter) as a starting point.

Customs and trade facilitation issues

* Numerous insurance products facilitate trade, including export credit insurance. The IPEF trade module has a role to play in shaping a regulatory environment in the Indo-Pacific region conducive to these types of products.

* The United States should also consider novel approaches to trade facilitation, including negotiating rules or principles supporting e-signatures and e-invoicing.

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Thank you for your consideration of these initial comments on the IPEF. We look forward to engaging with the Office of the U.S. Trade Representative on an ongoing basis regarding this important initiative.