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US Prez Biden to lay out new Indo-Pacific trade pact during Quad summit

White House says the new Indo-Pacific Economic Framework will help the United States and Asian economies work more closely on issues including supply chains, digital trade, clean energy

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Joe Biden | United States | Australia

AP  |  Tokyo 

Photo: Bloomberg
Photo: Bloomberg

President on Monday is set to launch a new Indo-Pacific trade pact designed to signal US dedication to the region and address the need for stability in commerce after the chaos caused by the pandemic and Russia's invasion of Ukraine.

The White House says the new Indo-Pacific Economic Framework will help the 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 Monday 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.

Biden is in the midst of a five-day visit to South Korea and the first trip to Asia of his presidency that wraps on Tuesday. 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 U.S. GDP growth at about 2.8 per cent in 2022 compared to 2 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 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," said White House national security adviser Jake Sullivan.

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,'" said Matthew Goodman, a former director for economics on the National Security Council 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.

Biden was scheduled to visit Emperor Naruhito of at Naruhito's residence on the grounds of the Imperial Palace on Monday before diving into wide-ranging talks with Kishida about trade, Russia's invasion of Ukraine, the North Korean nuclear threat, the two countries' COVID-19 responses and more.

Kishida and Biden will also 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.

In September the U.S. announced a new partnership with and Britain called AUKUS that is aimed and deepening security, diplomatic and defense cooperation in the Asia-Pacific region. Through that AUKUS partnership, will purchase nuclear-powered submarines, and the U.S. is to increase rotational force deployments to .

The U.S. president has also devoted great attention to the informal alliance known as the Quad, formed during the response to the 2004 Indian Ocean tsunami that killed some 230,000 people. Biden and fellow leaders from the alliance, which also includes Australia, and Japan, are set to gather in Tokyo for their second in-person meeting in less than a year. The leaders have also held two video calls since Biden took office.

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 USD 150 million in clean energy and infrastructure initiatives in ASEAN nations.

Sullivan confirmed on Sunday 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.

Biden will wrap up his five days in Asia on Tuesday with the meeting and one-on-one talks with India's Prime Minister Narendra Modi and Australia's newly elected prime minister, Anthony Albanese.

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.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Mon, May 23 2022. 08:08 IST
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