The White House said the new Indo-Pacific Economic Framework will help the US and Asian economies work more closely on issues including supply chains, digital trade, clean energy, worker protections and anticorruption efforts.
The details still need to be negotiated among the member countries, making it difficult for the administration to say how this framework can fulfill the promise of helping US workers and businesses while also meeting global needs.
Countries signing on to the framework were to be announced today during Biden’s visit to Tokyo for talks with Prime Minister Fumio Kishida. It’s the latest step by the Biden administration to try to preserve and broaden US influence in a region that until recently looked to be under the growing sway of China.
Kishida hosted a formal state welcome for Biden at Akasaka Palace, including a white-clad military honour guard and band in the front plaza. Reviewing the assembled troops, Biden placed his hand over his heart as he passed that American flag, and bowed slightly as he passed the Japanese standard.
Biden is in the midst of a five-day visit to South Korea and Japan – the first trip to Asia of his presidency – that wraps tomorrow. The White House announced plans to build the economic framework in October as a replacement for the Trans-Pacific Partnership, which the US dropped out of in 2017 under then-President Donald Trump.
The new pact comes at a moment when the administration believes it has the edge in its competition with Beijing. Bloomberg Economics published a report last week projecting US GDP growth at about 2.8 per cent in 2022 compared to two per cent for China, which has been trying to contain the coronavirus through strict lockdowns while also dealing with a property bust.
The slowdown has undermined assumptions that China would automatically supplant the US as the world’s leading economy.
“The fact that the United States will grow faster than China this year, for the first time since 1976, is a quite striking example of how countries in this region should be looking at the question of trends and trajectories,” White House national security adviser Jake Sullivan said.
Critics say the framework has gaping shortcomings. It doesn’t offer incentives to prospective partners by lowering tariffs or provide signatories with greater access to US markets.
Those limitations may not make the US framework an attractive alternative to the Trans-Pacific Partnership, which still moved forward after the US bailed out. China, the largest trading partner for many in the region, is also seeking to join TPP.
“I think a lot of partners are going to look at that list and say: ‘That’s a good list of issues. I’m happy to be involved,'” Matthew Goodman, a former director for international economics on the National Security Council said during President Barack Obama’s administration. But he said they also may ask, “Are we going to get any tangible benefits out of participating in this framework?”
It is possible for countries to be part of both trade deals.
The two leaders were also set to meet with families of Japanese citizens abducted by North Korea decades ago. The Japanese premier took office last fall and is looking to strengthen ties with the US and build a personal relationship with Biden. He’ll host the president at a restaurant for dinner.
The launch of the Indo-Pacific Economic Framework, also known as IPEF, has been billed by the White House as one of the bigger moments of Biden’s Asia trip and of his ongoing effort to bolster ties with Pacific allies. Through it all, administration officials have kept a close eye on China’s growing economic and military might in the region.
And earlier this month, Biden gathered representatives from nine of the 10 members of the Association of Southeast Asian Nations in Washington for a summit, the first ever by the organization in the US capital. Biden announced at the summit the US would invest some $212 million (US$150 million) in clean energy and infrastructure initiatives in ASEAN nations.
Sullivan confirmed yesterday that Taiwan – which had sought membership in the IPEF framework – isn’t among the governments that will be included. Participation of the self-ruled island of Taiwan, which China claims as its own, would have irked Beijing.
Sullivan said the US wants to deepen its economic partnership with Taiwan, including on high technology issues and semiconductor supply on a one-to-one basis.
Infamous bank robbers Bonnie and Clyde shot dead
The centre-left leader of the Australian Labor Party this weekend defeated incumbent Scott Morrison and ended nine years of conservative rule.
Modi, leader of the world’s biggest democracy, has declined to join the US and other allies in levying sanctions against Russia over the invasion of Ukraine. In a video call last month, Biden asked Modi not to accelerate its purchase of Russian oil.