Biden launches new Indo-Pacific trade initiative to contain China
The Indo-Pacific Economic Framework for Prosperity is not a free trade agreement. Its 13 members include India. Its focus is on international standards for investments in infrastructure, supply chains and the digital economy, but without tariff reductions it may not work. China speaks out against attempts to sow division and confrontation.
Tokyo (AsiaNews) – The Indo-Pacific Economic Framework for Prosperity (IPEF) is not a grand free trade agreement.
As the White House pointed out in a statement, the initiative US President Joe Biden announced yesterday during his visit to Japan has a more modest aim, namely enhancing trade cooperation between the United States and several Asian countries, with focus on “issues ranging from climate change to supply chain resilience and digital trade”.
In addition to the United States, 12 countries are party to the IPEF: Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and Vietnam.
With this project, Biden is adding a trade component to US Indo-Pacific strategy aimed at containing the geopolitical rise of China, hitherto limited to the diplomatic-military field.
With this initiative, the US president falls far short than the Trans-Pacific Partnership (TPP) now called Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), former President Barack Obama launched, from which Donald Trump pulled out in 2017.
In Congress, both Democrats and Republicans are by and large opposed to opening the US market to competitive Asian products, fearing job losses.
Without the mutual reduction of trade barriers and tariffs, Asian members will see little benefit in the IPEF, and this could sink the project, critics argue.
India and Southeast Asian countries will have to accept environmental, social and labour standards defined by the United States and other advanced nations. Without them, they may be denied access to greater US investments in infrastructure and technologies.
US Commerce Secretary Gina Raimondo said the IPEF is meant to be an alternative to China's Belt and Road Initiative, which many observers consider lacking in transparency and unsustainable.
China has shown no interest in joining Biden's scheme; according to the US, this is precisely because the IPEF requirements for international investment standards make it unattractive to Chinese interests.
Beijing immediately distanced itself from an initiative it perceives as another US attempt to counter its interests in the Indo-Pacific, like two US-leader military initiatives in the region.
The first one, the Quadrilateral Security Dialogue, colloquially called the Quad, is a forum to discuss strategic security between Australia, India, Japan, and the United States, which Beijing fears might turn into an “Asian NATO”.
The second, AUKUS, is a trilateral security pact signed in September 2021 between Australia, the United Kingdom, and the United States, to help Canberra obtain nuclear-powered submarines.
Yesterday, Foreign Minister Wang Yi said that China welcomes initiatives conducive to strengthening regional cooperation but “opposes attempts to create division and confrontation”.
To avoid tensions with Beijing, Washington excluded Taiwan from IPEF discussions for now; however, National Security Advisor Jake Sullivan stressed that the US will boost trade ties with Taiwan on a bilateral basis.