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13 countries to join new Asia-Pacific trade framework: Biden

13 countries to join new Asia-Pacific trade framework: Biden

24-May-2022 Intellasia |
5:02 AM

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President Joe Biden announced Monday (May 23) in Tokyo that 13 countries have joined a new, US-led Asia-Pacific trade initiative touted as a counterweight to China’s aggressive expansion in the region.

“The United States and Japan, together with 11 other nations will be launching” the Indo-Pacific Economic Framework for Prosperity, or IPEF, Biden said at a press conference alongside Japanese prime minister Fumio Kishida.

“This framework is a commitment to working with our close friends and partners in the region on challenges that matter most to ensuring economic competitiveness in the 21st century,” he said.

Biden was due to make a formal roll-out of the framework later Monday.

He did not say what countries had already signed up to IPEF, which the White House is billing as a framework for what will ultimately become a tight-knit group of trading nations.

Singapore prime minister Lee Hsien Loong has previously said that Singapore intends to join IPEF.

Unlike traditional trade blocs, there is no plan for IPEF members to negotiate tariffs and ease market access a tool that has become increasingly unpalatable to US voters fearful of undermining homegrown manufacturing.

Instead, the programme foresees integrating partners through agreed standards in four main areas: The digital economy, supply chains, clean energy infrastructure and anti-corruption measures.

Biden has pushed to rapidly rebuild strategic military and trade alliances weakened under his predecessor Donald Trump since taking office in 2021.

And IPEF is intended to offer US allies an alternative to China’s growing commercial presence across the Asia-Pacific.

However, there is no political will in Washington for returning to a tariffs-based Asia trade deal following Trump’s 2017 withdrawal from the Trans-Pacific Partnership a huge trading bloc that was revived, without US membership, in 2018 as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

China has criticised IPEF as an attempt to create a closed club. Biden’s national security advisor, Jake Sullivan, rejected this, telling reporters “it is by design and definition an open platform”.

Sullivan said that Taiwan, a self-governing democracy that China claims sovereignty over, has not been brought into the initial line-up despite being an important link in microchip supply chains.

Sullivan said nevertheless that the United States is “looking to deepen our economic partnership with Taiwan, including on high-technology issues, including on semiconductors and supply chains”.

This will happen, however, only “on a bilateral basis”.

Category: FinanceAsia

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