President Joe Biden on Monday launched a new Asia-Pacific trade initiative in Tokyo, with 13 countries signing up, including India and Japan, although questions remain about the agreement’s effectiveness.
Biden officially unveiled the Indo-Pacific Economic Framework for Prosperity, or IPEF, on his second day in Japan, where he will hold talks with Prime Minister Fumio Kishida before attending a regional quad summit on Tuesday.
“This framework is a commitment to work with our close friends and partners in the region on the challenges that are most important for ensuring economic competitiveness in the 21st century,” he said.
Unlike traditional trade blocs, IPEF members have no plans to negotiate tariffs and facilitate market access – a tool that has become increasingly unpopular with U.S. voters for fear of devaluing domestic production.
Instead, the program predicts integration of partners through agreed criteria in four key areas: digital economy, supply chain, clean energy infrastructure, and anti-corruption measures.
In addition to the United States, the starting list of members includes Australia, Brunei, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Thailand and Vietnam.
Countries have described the IPEF as a framework that will eventually become a tight-knit group of trading nations.
“We share our commitment to a free, open, fair, inclusive, interconnected, resilient, secure and prosperous Indo-Pacific region,” they said in a joint statement.
Deepening economic engagement between partners is critical to sustainable growth, peace and prosperity. “
Biden’s national security adviser, Jake Sullivan, told reporters that together, participants accounted for about 40 percent of global GDP and “there are other countries that can join us.”
Since taking office in 2021, Biden has pushed for the rapid restructuring of the weakened strategic military and trade alliances under his predecessor, Donald Trump.
IPEF aims to offer an alternative to US allies for China’s growing trade presence across Asia-Pacific.
However, after Trump’s 2017 withdrawal from the Trans-Pacific Partnership, Washington has no political will to return to a tariff-based Asia trade agreement – a huge trade bloc that was revived in 2018 under a new name without US membership.
While reducing trade barriers for TPP members, U.S. Commerce Secretary Gina Raymondo told reporters that the IPEF was not designed to go the same way.
“The framework is deliberately designed not to be the same old, the same old traditional trade agreement,” he said.
Nevertheless, Japan’s Kishida says there is still hunger for US involvement in the larger deal abandoned by Trump.
The country welcomes the new structure and will “participate and cooperate,” he said, but “from a strategic point of view, Japan expects the United States to return to the TPP.”
China has criticized the IPEF for trying to create a closed club. “It’s an open platform by design and definition,” Sullivan said.
Taiwan, the self-governing democracy on which China claims sovereignty, has not been brought to the forefront – despite being an important link in the supply chain of microchips.
Sullivan said the United States nevertheless wanted to “deepen our economic partnership with Taiwan, including on high-tech issues, including semiconductors and the supply chain.”
This will happen, however, only on a “bilateral basis”.
The United States has been plagued by suspicion over its lack of incentives to comply with the IPEF’s plan for smooth integration.
Without offering increased access to the huge U.S. market, it is not unclear what key application process can be applied.
But Raymondo said the United States would have suffered “much less disruption” if the IPEF had existed before the Covid-19 epidemic began before the massive economic shutdown.
And more broadly, U.S. trade growth initiatives have been welcomed by businesses that are “increasingly looking for alternatives to China,” he said.
(This story was not edited by NDTV staff and was automatically generated from a syndicated feed.)