Biden to unveil business dialogue outlines with Indo-Pacific nations
US President Joe Biden will unveil his administration’s long-awaited Indo-Pacific economic framework on Monday, seen as a key step in US efforts to re-engage with Asian countries on trade more than five years after pulling out of a comprehensive trade pact in the region.
Observers can expect to see a statement of broad principles laid out under four distinct pillars: fair and resilient trade; supply chain resilience; clean energy, decarbonization and infrastructure; and taxation and the fight against corruption.
The statement, which Biden will deliver in Japan, is non-binding; rather, it is a roadmap for cooperation on issues under the pillars, all of which will be subject to negotiation.
Unlike other trade agreements, the Indo-Pacific Economic Framework, or IPEF, is not expected to contain measures to expand market access by removing tariffs and other trade restrictions. This frustrates many proponents of broader trade.
“Multilateral trade agreements are not seen as beneficial to American workers,” Sheila A. Smith, Asia-Pacific research fellow at the Council on Foreign Relations, told VOA. “I think it’s the wrong choice. I think we need to engage more aggressively in trade access and trade negotiations with our partners in the region. But our policies are not aligned with that at the moment. “
It was still unclear how many countries should sign the joint declaration. Reports suggest the administration was hoping for as many as 10 or 11.
The Biden administration has been criticized for taking so long to establish an economic strategy in the Pacific, especially given China’s growing influence in the region.
The IPEF unveiling comes more than five years after former President Donald Trump withdrew from the deal that would become the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, an 11-nation bloc that is now one of larger free trade areas. in the world.
Experts see the IPEF as the start of a much longer dialogue with countries in the region on how to better align policies and practices.
“It’s going to be kind of a norm-setting and norm-creating effort,” Smith said. “The main objective here is to be inclusive. This does not just mean that countries which are more democratically inclined will set the rules. It means that finding a common basis of understanding of standards in these new areas of trade will be really important.”
The Biden administration said the IPEF will seek to “define our shared goals around trade facilitation, standards for the digital economy and technology, supply chain resilience, decarbonization and clean energy. , infrastructure, labor standards and other areas of common interest”.
While some experts doubt that much progress can be made in areas such as labor rules and decarbonization without promises of expanded market access, gains are still possible.
According to Niels Graham, deputy director of the Atlantic Council GeoEconomics Center, “trade facilitation”, the alleviation of administrative burdens that slow or block the exchange of goods and services, could be one of the most promising areas. covered by IPEF.
In an article published by the Atlantic Council, Graham wrote: “For large developing countries – like Vietnam, Indonesia and Thailand – to see the value of signing on to the framework, the United States must offer clear benefits that match their priorities”.
According to Graham, recent survey data indicate that aid for trade facilitation is an area of ”high interest” for developing economies.
“To effectively encourage developing economies’ participation in the IPEF, the United States should pay particular attention to the framework’s trade facilitation chapters under the fair and resilient trade pillar,” he said. writing. “If the United States can facilitate a successful arrangement surrounding the trade facilitation portions of the framework, it will help build a broader economic partnership in the region.”
Digital Trade Agreement
“Given that market access is not on the table at the moment, I think the real question will be: what are the commercially meaningful results?” Jake Colvin, chairman of the National Trade Council, told VOA. “What we will be looking for is an effort to negotiate a digital trade deal, as well as supply chain commitments that would facilitate trade and simplify customs procedures.”
When it comes to digital trade, a major question will be the role of governments in cross-border data flows. While the US default is to promote the free flow of information, other countries are more willing to restrict access.
“IPEF is an opportunity to compare the path taken by the United States and like-minded countries against what is happening in places like Russia and China,” Colvin said.
“Not a Substitute”
Some experts believe that whatever form the IPEF takes will fall well short of what U.S. trading partners in the Indo-Pacific actually want.
“The Indo-Pacific economic framework that the Biden administration is going to roll out is not a substitute for trade deals,” Steve Okun, Singapore-based senior adviser for McLarty Associates, told VOA. “What Southeast Asian countries want [are] commercial agreements. They would like to see market access commitments from the United States so that they can have more access to the United States”
In turn, Okun said, they would provide U.S. businesses with better access to regional markets and pass numerous policy changes in areas such as labor rules, environmental regulations and other areas of U.S. interest.
However, in the absence of substantial increases in market access, he said, it is difficult to see US trading partners in the region making meaningful concessions.
“There is, quite frankly, a lot of skepticism right now about what the Biden administration is going to do,” Okun said. “There are people who look at this from a glass-half-full perspective, which is, ‘They’re here. They’re committing. This is a start.’ And then there are other people who will look at this from a glass-half-empty perspective, saying, ‘Without… trade commitments, what is this really going to mean for us?’”
China preemptively criticized the IPEF, saying that by trying to create a group of like-minded trading partners, the United States is adopting a “cold war mentality”.
“Asia-Pacific is a promising land for cooperation and development, not a chessboard for geopolitical competition,” Chinese Foreign Ministry spokesperson Zhao Lijian said on May 12 at a press conference. .
People’s Dailya newspaper controlled by the Chinese Communist Party, accused the United States of trying to force countries in the region to sever trade relations with China.
The newspaper quotes an expert as a warning: “The United States will use the framework to decouple from China and will try to attract ASEAN [Association of Southeast Asian Nations] members with IPEF’s market economy and then force them to choose between China and the United States”
White House Bureau Chief Patsy Widakuswara contributed to this report.