Washington’s anti-China economic structure offers nothing to potential members

By Timur FomenkoA political analyst

During his first official visit to Japan on Monday, US President Joe Biden announced the launch of a new project called the Indo-Pacific Economic Framework, which the White House claims is an economic vision for Asia. And against China. With the exception of India, Japan, South Korea, Australia, New Zealand and Myanmar, Cambodia and Laos (who were expelled for being too pro-China), 13 countries have signed the agreement.

But what does this agreement mean? And what does it offer and consist of? This is a good question, and most people are surprised by the same thing. The Indo-Pacific Economic Framework (IPEF) is not a trade agreement, not an investment agreement, not an agreement and not an institution; It is, at best, an American slogan, a slogan that focuses on indirectly attacking China rather than actually making any serious economic promises, a recognition that they have long since lost the Asian economic debate, but are still unwilling to do much about it. It is

Why is the United States proposing such a bizarre and absurd initiative? At the moment, American trade and economic policy is in a quandary. Because of the legacy of former President Donald Trump, U.S. domestic politics is strongly focused on trade protectionism called ‘America First’, which has developed into a bipartisan opposition to free trade and a belief that American jobs should be prioritized and established where possible. . Large free trade agreements, as it turns out, are reasonable to weaken America’s trade competitiveness, unless they are secured unilaterally by the United States.

In line with this, the Trump administration immediately withdrew the United States from the initial anti-China trade agreement created by the Obama administration, known as the Trans-Pacific Partnership (TPP), now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. . CPTPP). After securing the Regional Comprehensive Partnership (RCEP) with other Asia-Pacific countries last year, China now wants to join the remaining agreement on its own.

This has left the United States cold – Beijing has no economic answer to Washington in the geopolitical competition in Asia, but the domestic political picture cannot make serious promises because it bans it. Free trade agreements require reciprocity, but the United States cannot tolerate the idea of ​​recognizing market access in another cheap labor economy, such as Vietnam or India.

The result is the Indo-Pacific Economic Framework, an economic policy by slogan that promises to write Asia’s economic rules according to American preferences, including proposing an anti-China supply chain (marketed as resilience).

There are multiple things wrong with this. First, the Asia-Pacific economy, in terms of geography, is deeply integrated with China, which is their largest trading partner. These include close US allies such as Japan, and of course South Korea, whose new pro-US president, Eun Sook-eol, has pledged to join the deal. For comparison, trying to get these countries to abandon economic ties with China is like asking the Netherlands to sever Germany; This is impossible, because at the regional level, economic growth and prosperity require a ‘relative gain’ between countries as opposed to a zero-sum policy. Because China is the largest economy, the largest population and the largest market in the region, it is the effective center of the regional economy. Not the United States.

Considering that the Indo-Pacific Economic Framework does not promise any funding, there is no way to facilitate a serious joint venture, and in fact the United States cannot persuade its members to allow Taiwan to join, even considering China, Is dead on arrival.

While China-backed projects such as the Belt and Road Initiative have brought in trillions of dollars worth of funds, serious entities such as the Asian Investment and Infrastructure Bank (AIIB) exist, the Indo-Pacific economic structure is best embellished, Marketing efforts to do, and we’ve already got plenty – all of which deliberately target China, such as the ‘Blue Dot Initiative’, the ‘Build Back Better World’, etc. – but where are they now?

The IPEF seems to be the latest tactic in this conveyor belt of anti-China proposals, and like the rest, it may fade in the end because they are not game changers and do not make serious promises, just as the United States largely expects the Beijing sector to work up, non-military. State funds are not committed to the issue, and, of course, reject China’s own emergence and the economic reality of other countries’ interests in order to maintain relations with Beijing.