- Advertisement -

Joe Biden Waters Down Indo-Pacific Economic Framework To Get More Support

- Advertisement -

Joe Biden has decided to tone down his Indo-Pacific Economic Framework in an 11-hour move to attract more countries to join the deal he will unveil in Tokyo on Monday.

Biden is using his first trip to Asia as US president to launch the IPEF, which aims to respond to criticisms from allies and partners that his strategy in the region was too security-oriented and lacked an economic component.

Six people familiar with the situation said the US and other countries had agreed to change the language in the two-page statement that will accompany the IPEF unveiling.

An early draft, obtained by the Financial Times, said the countries would “start negotiations”. But the Biden administration has since agreed to tone down the language to make it clear that the countries have begun talks aimed at later negotiations.

Several people familiar with the talks said Tokyo had urged Washington to be more flexible to maximize the chances of a deal with more Southeast Asian countries.

US officials were still negotiating the contents of the statement Thursday as Biden flew Air Force One to South Korea, the first stop on his five-day two-country visit to Asia. The White House National Security Council has not responded to a request for comment.

Countries in the Indo-Pacific have last year urged Biden to develop an economic strategy to counter China, which is rapidly increasing its power and trade presence in the region. Critics have accused Washington of having an “all guns and no butter” strategy, which they say had allowed China to use its economic power to pressure other countries.

The US began talks with Indo-Pacific countries late last year. But Biden’s team struggled early on to convince many Southeast Asian countries and India to join. Several people familiar with the discussions said some countries were hesitant because they didn’t see much value in it, especially because the IPEF doesn’t include access to the US market.

The IPEF will contain four pillars addressing issues such as infrastructure, supply chain resilience and clean energy. It will also include talks on creating a digital trade deal, which Tokyo has urged the US to prioritize.

US officials have argued that the IPEF is more fit for the 21st century than traditional trade deals that lower tariffs. They have also made it clear that conventional agreements have become politically toxic in American politics, making it difficult to sign deals that grant market access.

Japan and other US allies in Asia remain frustrated that then-President Donald Trump withdrew from the Trans-Pacific Partnership, a deal involving 12 countries, in 2017. But Hillary Clinton, his Democratic opponent in the 2016 election, had also spoken out against the TPP over soured trade deals among some voters.

“The trade-off with IPEF has always been between inclusiveness and participation – a more demanding launch commitment would mean fewer participants as the US doesn’t offer to discuss new market entry,” said Kurt Tong, a partner at consultancy The Asia Group and a former US citizen. ambassador in charge of economic issues.

Tong said the IPEF needs a critical mass of Southeast Asian and emerging economies to be successful. “There will be many critics who call the IPEF a glass half full, but the disappointment is not so much the IPEF per se, but the inability of the US to rejoin TPP,” he said.

Before the trip, US National Security Adviser Jake Sullivan said the framework was a “21st-century economic arrangement, a new model designed to meet new economic challenges.”

An additional challenge to the launch of IPEF is that Australia will hold general elections on Saturday. If a new cabinet is not sworn in on Monday, the government will not have a formal mandate to start ‘negotiations’.

Follow Demetri Sebastopulo and Kana Inagaki on Twitter

- Advertisement -

- Advertisement -

- Advertisement -