U.S. President Joe Biden on Monday will present his administration’s long-awaited Indo-Pacific economic framework, seen as a key step in U.S. efforts to resume engagement with Asian countries in trade more than five years after withdrawing from a comprehensive trade deal in the region.

Observers can expect to see a statement of the broad principles set out in four different pillars: fair and sustainable trade; sustainability of the supply chain; clean energy, decarbonisation and infrastructure; and taxation and anti-corruption.

A statement Biden will make in Japan is optional; instead, it is a roadmap for cooperation on issues that fall under the pillars, all of which will be negotiated.

Unlike other trade agreements, the Indo-Pacific Economic Framework, or IPEF, is not expected to contain measures to expand market access by lifting tariffs and other trade restrictions. This upsets many fans of wider trade.

“Multilateral trade agreements are not seen as beneficial to American workers,” Sheila A. Smith, a senior fellow at the Asia-Pacific Council on Foreign Relations, told the Voice of America. “I think this is the wrong choice. I think we need to be more involved in trade access and trade negotiations with our partners in the region. But our policy at the moment is not in line with that.”

It remained unclear on Friday how many countries are expected to sign the joint statement. According to reports, the administration was counting on 10 or 11.

FILE – Chinese President Xi Jinping speaks on video at the opening ceremony of the China International Trade Fair for Services 2021 in Beijing, at a restaurant in Shanghai, China, on September 2, 2021.

Recovery is finally

The Biden administration has been criticized for developing an economic strategy in the Pacific for so long, especially given China’s growing influence in the region.

The inauguration of the IPEF came more than five years after former President Donald Trump withdrew from the agreement, which eventually evolved into the Comprehensive and Progressive Transatlantic Partnership Agreement, an 11-nation bloc that is now one of the largest free trade zones. . in the world.

Experts see the IPEF as the beginning of a much longer dialogue with countries in the region on how best to coordinate policies and practices.

“This will be standard rule-making activity,” Smith said. “The main goal here is to be inclusive. This not only means that countries that are more democratically inclined will set the rules. This means that finding a common basis for understanding standards in these new areas of trade will help be really important.”

Possible victories

The Biden administration said the IPEF would seek to “define our common goals in trade facilitation, digital economy and technology standards, sustainability of supply chains, decarbonisation and clean energy, infrastructure, standards for workers and other areas of common interest”.

FILE - A container vessel docked at the port of Long Beach in Long Beach, California, on October 1, 2021.  While congestion in state ports has slowed import supplies, it has also made it difficult for state farmers to export crops to Asian markets.

FILE – A container vessel docked at the port of Long Beach in Long Beach, California, on October 1, 2021. While congestion in state ports has slowed import supplies, it has also made it difficult for state farmers to export crops to Asian markets.

Although some experts doubt that significant progress can be made in areas such as labor regulations and decarbonisation without promises of expanding market access, success is still possible.

According to Niels Graham, Assistant Director of the Atlantic Council’s Geoeconomic Center, Trade Facilitation, easing administrative burdens that slow or block the exchange of goods and services may be one of the most promising areas covered by the IPEF.

In an article published by the Atlantic Council, Graham wrote: “In order for large developing countries such as Vietnam, Indonesia and Thailand to see the value of signing the framework, the United States must offer clear benefits that are in line with their priorities.”

Recent polls, Graham said, show that aid in trade facilitation is an area of ​​”great interest” to emerging economies.

“In order to effectively stimulate the participation of emerging economies in the IPEF, the United States must pay special attention to the sections on trade facilitation within the framework of fair and sustainable trade,” he wrote. “If the United States can promote a successful agreement on parts of the trade facilitation agreement, it will help build a broader economic partnership in the region.”

Digital Trade Agreement

“Since market access is not yet being considered, I think the real question will be: what are the commercially significant results?” This was stated by the President of the National Council on Foreign Trade Jake Colvin. “We will seek efforts to conclude a digital trade agreement, as well as supply chain commitments that will facilitate trade and simplify customs procedures.”

With regard to digital commerce, the main challenge will be the role of governments in cross-border data flows. Although the United States is by default in favor of free flow of information, other countries are more willing to restrict access.

“IPEF is an opportunity to contrast the path of the United States and like-minded countries with what is happening in places like Russia and China,” Colvin said.

FILE - In this photo on January 23, 2017, then-Vice President Mike Pence (left) and then-White House Chief of Staff Raines Pribus (right) watch then-President Donald Trump demonstrate a decree withdrawing the United States from the 12 countries of the Trans-Pacific Partnership Trade Pact.

FILE – In this photo on January 23, 2017, then-Vice President Mike Pence (left) and then-White House Chief of Staff Raines Pribus (right) watch then-President Donald Trump demonstrate a decree withdrawing the United States from the 12 countries of the Trans-Pacific Partnership Trade Pact.

“No replacement”

Some experts believe that regardless of the form of IPEF, it will be far from what the US trading partners in the Indo-Pacific region really want.

“The Indo-Pacific economic framework that the Biden administration is set to deploy is not a substitute for trade agreements,” said Steve Okun, a senior adviser at Singapore’s McLarty Associates, to Voice of America. “What do the countries of Southeast Asia want? [are] trade agreements. They would like to see market access commitments from the United States so they can gain more access to the United States. “

In turn, Okun said, they offer American companies better access to regional markets and will make many policy changes in areas such as labor regulations, environmental regulations and other areas of interest to the United States.

However, in the absence of a significant increase in market access, he said, it is difficult to see how US trading partners in the region are making any significant concessions.

“Honestly, there is a lot of skepticism now when it comes to what the Biden administration is going to do,” Okun said. “There are some people who look at it in terms of a half-full glass, namely,‘ They’re here. They are engaged. This is the beginning. ” And there are other people who look at it in terms of a half-empty glass, saying, “Without … a trade commitment, what will that really mean for us?” “

China is responding

China has preemptively criticized the IPEF, saying that in an attempt to create a group of like-minded trading partners, the United States is adopting a “Cold War mentality.”

“The Asia-Pacific region is a promising country for cooperation and development, not a chessboard for geopolitical competition,” Chinese Foreign Ministry spokesman Zhao Lijian told a news conference on May 12.

People’s newspapercontrolled by the Communist Party of China newspaper, accused the United States of trying to force countries in the region to break out of trade relations with China.

The newspaper quoted an expert who warned: “The United States is going to use the framework for secession from China and will try to attract ASEAN [Association of Southeast Asian Nations] members of the IPEF market economy and then make them choose between China and the US »

White House Chief of Staff Patsy Vidakuswara contributed to this report.

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