Joe Biden launches IPEF initiative, making explicit the goal of blunting China’s clout
- The Indo-Pacific Economic Framework (IPEF) seeks to restore ‘US economic leadership’ across the region, without Taiwan for now
- US
Secretary of Commerce Gina Raimondo says the long-awaited plan aims to
make Indo-Pacific countries beyond China more attractive as
manufacturing hubs
“China
will continue to broaden high-level opening up, push for high quality
construction of the Belt and Road Initiative and facilitate the
interconnectivity of the Asia-Pacific and safeguard security and
stability of the regional supply chain,” Wang said at the opening of the
78th Session of the Economic and Social Commission for Asia and the
Pacific.
He added that China was committed in a handful of regional
trade pacts, including the implementation of Regional Comprehensive
Economic Partnership (RCEP), the Comprehensive and Progressive Agreement
for Trans-Pacific Partnership (CPTPP) and the Digital Economy
Partnership Agreement.
US Secretary of Commerce Gina Raimondo told reporters on Sunday the IPEF launch marked “an important turning point in restoring US economic leadership in the region, and presenting Indo-Pacific countries an alternative to China’s approach to these critical issues”.
US Secretary of Commerce Gina Raimondo told reporters on Sunday the IPEF launch marked “an important turning point in restoring US economic leadership in the region, and presenting Indo-Pacific countries an alternative to China’s approach to these critical issues”.
US Commerce Secretary Gina Raimondo with
South Korean Trade, Industry and Energy Minister Lee Chang-yang before
their talks in Seoul this month. Photo: dpa
One particular ambition of US officials for the framework was to make Indo-Pacific countries beyond China more attractive as manufacturing hubs.
One particular ambition of US officials for the framework was to make Indo-Pacific countries beyond China more attractive as manufacturing hubs.
“Many
companies, many US companies, are looking to diversify away from
China,” Raimondo said. “Well, countries – Vietnam, Malaysia, Indonesia –
that are actually signed up and in the Indo-Pacific framework, will
obviously have an advantage to get the business from American companies
because they will have signed up to the high standards agreements that
we plan to sign pursuant to the IPEF.”
Her comments followed reporting by The Wall Street Journal that Apple was seeking to shift some production from China to countries such as Vietnam and India, citing issues such as China’s strict Covid-19 measures.
The administration’s framing of IPEF as a tool with which to counter China’s regional clout is likely to find a sympathetic audience among members of the US Congress, where competition with Beijing remains a bipartisan area of concern.But lawmakers have expressed concern about Taiwan’s exclusion from the framework, which launched with 13 founding members.
“Excluding Taiwan from IPEF would significantly distort the regional and global economic architecture, run counter to US economic interests, and allow the Chinese government to claim that the international community does not in fact support meaningful engagement with Taiwan,” 52 senators wrote in a letter to the Biden administration last week.
Her comments followed reporting by The Wall Street Journal that Apple was seeking to shift some production from China to countries such as Vietnam and India, citing issues such as China’s strict Covid-19 measures.
The administration’s framing of IPEF as a tool with which to counter China’s regional clout is likely to find a sympathetic audience among members of the US Congress, where competition with Beijing remains a bipartisan area of concern.But lawmakers have expressed concern about Taiwan’s exclusion from the framework, which launched with 13 founding members.
“Excluding Taiwan from IPEF would significantly distort the regional and global economic architecture, run counter to US economic interests, and allow the Chinese government to claim that the international community does not in fact support meaningful engagement with Taiwan,” 52 senators wrote in a letter to the Biden administration last week.
While Taiwan
was not among IPEF’s founding members, officials said membership of the
initiative would likely grow in the future, and indicated a parallel
effort to bolster economic ties with Taiwan soon.
“We intend to pursue a deeper bilateral engagement with Taiwan on trade and economic matters in the coming days and weeks,” said US national security adviser Jake Sullivan.
“We intend to pursue a deeper bilateral engagement with Taiwan on trade and economic matters in the coming days and weeks,” said US national security adviser Jake Sullivan.
US National Security Adviser Jake Sullivan said the IPEF is not a traditional free trade agreement.
Chinese Foreign Minister Wang on Sunday questioned if the IPEF would force countries to take sides between Washington and Beijing by disrupting supply chains.
“Is the US trying to accelerate the recovery of the world economy, or is it creating economic decoupling, technological blockade, industrial chain disruption, and aggravating the supply chain crisis?” he said, during talks with his Pakistani counterpart Bilawal Bhutto Zardari in Guangzhou.
“A few years ago, the US launched the trade war with China, which brought serious consequences to the world and to the US. The lessons are profound. The US should know its mistakes and correct them, rather than repeating mistakes.”
Wang said it would be wrong for the US to use the initiatives as a political tool to exclude others.
“Is the United States using economic means to coerce regional countries to choose sides between China and the United States?” he said, according to a statement from the Chinese foreign ministry.
First raised by Biden during a virtual meeting with Association of Southeast Asian Nations (Asean) counterparts in October, IPEF has also drawn some scepticism over its lack of provisions around market access and tariff elimination.
Chinese Foreign Minister Wang on Sunday questioned if the IPEF would force countries to take sides between Washington and Beijing by disrupting supply chains.
“Is the US trying to accelerate the recovery of the world economy, or is it creating economic decoupling, technological blockade, industrial chain disruption, and aggravating the supply chain crisis?” he said, during talks with his Pakistani counterpart Bilawal Bhutto Zardari in Guangzhou.
“A few years ago, the US launched the trade war with China, which brought serious consequences to the world and to the US. The lessons are profound. The US should know its mistakes and correct them, rather than repeating mistakes.”
Wang said it would be wrong for the US to use the initiatives as a political tool to exclude others.
“Is the United States using economic means to coerce regional countries to choose sides between China and the United States?” he said, according to a statement from the Chinese foreign ministry.
First raised by Biden during a virtual meeting with Association of Southeast Asian Nations (Asean) counterparts in October, IPEF has also drawn some scepticism over its lack of provisions around market access and tariff elimination.
Officials have met that criticism with arguments that
the shifting modern economy requires an unconventional approach to
economic engagement. “The fact that this is not a traditional free trade
agreement is a feature of IPEF and not a bug,” said Sullivan.
But
the Biden administration’s avoidance of market access provisions also
reflects the political reality that Trump-era protectionism continues to
hold sway over much of the Republican Party and its voters – adding to
political pressures Biden is already facing over soaring inflation ahead
of midterm elections in November.
Washington is also under pressure to address regional doubts over a sustained US commitment to the framework. Southeast Asian countries have made it clear they would like to see more US commitment to trade, expressing frustration over former US president Donald Trump’s withdrawal of the US from the Trans-Pacific Partnership (TPP) trade deal in 2017.
Washington is also under pressure to address regional doubts over a sustained US commitment to the framework. Southeast Asian countries have made it clear they would like to see more US commitment to trade, expressing frustration over former US president Donald Trump’s withdrawal of the US from the Trans-Pacific Partnership (TPP) trade deal in 2017.
Meanwhile, both China and Taiwan have
launched bids to join TPP, now named the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP).
The Biden administration has shown no interest in returning to the pact, the “biggest problem” of which was that it lacked support from Congress, US trade representative Katherine Tai said on Sunday. Tai dodged questions about whether any agreements forged under IPEF would require Congressional sign-off.
Joe Biden arrives in South Korea for a tour of Asia to strengthen US ties in the Indo-Pacific
“Let’s see where the negotiations go,” she said. “But … regardless, we have to keep Congress close, and Congress needs to be a part of shaping what we do with our partners here.”
The Biden administration has shown no interest in returning to the pact, the “biggest problem” of which was that it lacked support from Congress, US trade representative Katherine Tai said on Sunday. Tai dodged questions about whether any agreements forged under IPEF would require Congressional sign-off.
Joe Biden arrives in South Korea for a tour of Asia to strengthen US ties in the Indo-Pacific
“Let’s see where the negotiations go,” she said. “But … regardless, we have to keep Congress close, and Congress needs to be a part of shaping what we do with our partners here.”
As well as bidding to join CPTPP, China
has also been part of RCEP – a free-trade agreement led by Asean members
that launched this year and has been promoted as representing nearly a
third of the global population and about 30 per cent of the global gross
domestic product.
Besides China, the 15-member pact also includes
Japan, the world’s third-largest economy, along with Vietnam and
Australia. The US has not shown interest in joining.