‘Hard to believe’: Biden’s economy predicts hard sell in Asia | International exchange

Phnom Penh, Cambodia – US President Joe Biden’s arrival in Seoul on Friday marks not only the start of his first visit while in office to South Korea and Japan, but the start of an economic initiative aimed at deepening ties between states. States across Asia.

While many details of the Indo-Pacific economic framework have yet to be finalized, the Biden administration made one point clear: The plan is not a traditional trade deal that will cut tariffs or otherwise open up market access. Americans, but a partnership to promote common economic standards.

While many of China’s regional neighbors share Washington’s concerns over the fledgling superpower’s ambitions, IPEF’s lack of clear trade provisions could make it an uninspiring prospect for potential members, particularly in South Asia. -East.

“You can feel the frustration of trade-dependent developing countries,” Calvin Cheng, senior economics, trade and regional integration analyst at the Malaysian Institute for Strategic and International Studies, told Al Jazeera. “There is always talk of engaging Asia, the idea, but what exactly is that – and what are the incentives for developing countries to adopt the standards imposed on them by more developed countries? rich ?”

Since announcing IPEF in October, the Biden administration has characterized the initiative as a way to promote common standards under the pillars of fair and resilient trade; supply chain resilience; infrastructure, clean energy and decarbonization; and taxation and the fight against corruption.

A fact sheet distributed by the White House in February describes the framework as part of a broader push to “restore American leadership” in the region by engaging with partners there to “address the challenges urgent issues, from competition with China to climate change to the pandemic”. .

Nonetheless, Biden’s decision not to strike a major trade deal is reminiscent of former US President Donald Trump’s protectionist leanings and, in particular, his administration’s abrupt withdrawal from the Trans-Pacific Partnership (TPP).

Trump, whose antipathy to traditional alliances has sparked anxiety in many Asian countries, scuttled that deal in 2017 despite sharing the deal’s goals of countering China’s expanding economic influence.

South Korean President Yoon Suk-yeol expressed support for Biden’s new economic initiative [File: Seong Joon Cho/Bloomberg]

But even without clear benefits to boost trade, Asian leaders have, for the most part, reacted positively to the prospect of renewed US engagement in Asia.

Japan and South Korea, longtime allies, are expected to be among the first to engage with IPEF, as are Singapore and the Philippines.

From Vietnam, Prime Minister Pham Minh Chinh said at the recent US-ASEAN Summit that Vietnam “would like to work with the United States to realize the four pillars of this initiative”.

However, he added that Vietnam needed more time to study the framework, as well as to see more “concrete details”.

Thailand has also shown interest, while Indonesian and Indian leaders have yet to take a clear position.

Huynh Tam Sang, a senior lecturer in international relations at the University of Social Sciences and Humanities in Ho Chi Minh City, said Hanoi wanted to avoid antagonizing the United States or China – a common position for states in Southeast Asia who try to stay away from the big power struggles. while avoiding being dominated by their northern neighbour.

“Vietnamese government has been rather careful not to show any intention to join IPEF or not, although I think there are many advantages to joining,” Sang told Al Jazeera, citing clean energy and reliable supply chains as common interests.

Sang said other standards, however, such as those related to taxes and anti-corruption efforts, might be a step too far for the Vietnamese government.

“I think Vietnam might be really reluctant to join this pillar for fear that the United States will interfere in Vietnam’s domestic politics,” he said.

“The anti-corruption campaign is definitely underway, but many Vietnamese are very skeptical of this vision of cooperation, especially with the United States when the Biden administration prioritized democratic values ​​when promoting links with the countries of the region.

Strings tied

Such concerns could undermine renewed U.S. engagement, especially when China has been keen to engage in trade without such values-based conditions attached. The Regional Comprehensive Economic Partnership (RCEP), a free trade agreement that came into effect earlier this year, is a testament to this hands-off approach for some observers.

China played a key role in negotiating RCEP, which also includes Japan and South Korea, as well as the 10 ASEAN member states – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore , Thailand and Vietnam – as well as Australia and New Zealand.

In total, RCEP covers some 2.3 billion people and around 30% of the global economy. The partnership is widely seen as being more focused on promoting trade by removing tariffs and red tape, with a less holistic approach to improving economic standards than the TPP or its successor, the Trans-Pacific Partnership Agreement. Global and Progressive (CPTPP).

Cheng described the CPTPP, of which the United States is not a member, as the “gold standard” for trade agreements in the region, noting its commitment to expanding trade access as well as provisions to protect workers’ rights, promote transparency and address environmental issues and climate change.

“So the IPEF is pretty much that, but removing the trade agreement aspect, leaving just the standards,” he said.

It remains to be seen how far the standards-only method will go in terms of acceptance across Asia.

Ismail Sabri Yaakob, Malaysian Prime Minister
Malaysian Prime Minister Ismail Sabri Yaakob called on the United States to take a more comprehensive approach to trade [File: Samsul Said/Bloomberg] (Bloomberg)

Already, Malaysian Prime Minister Ismail Sabri Yaakob and International Trade Minister Azmin Ali have said the United States should take a more comprehensive approach.

Ali described the framework proposal in an interview with Reuters as a “good start for us to engage on various issues” and said Malaysia would decide which IPEF pillars it would consider joining. At the same time, he clarified that the IPEF does not replace the more comprehensive TPP.

Some of the most direct public criticism of the new framework on this front has come from prominent former ministers from Japan, one of the region’s staunchest US allies.

Earlier this month, former Foreign Minister Taro Kono and former Justice Minister Takashi Yamashita spoke at an event in Washington about the new framework’s lack of firm commitments, an aspect they found glaring in the context of the abrupt collapse of the TPP. In their comments, both argued that the IPEF would only serve to undermine the CPTPP.

“Now the Biden administration is talking about the Indo-Pacific economy, I would say forget that,” Kono said.

Hiroaki Watanabe, a professor of international relations at Ritsumeikan University in Kyoto, said the US withdrawal from the TPP had undermined Japan’s perception of IPEF’s stability. While Biden could promote his ruling cadre, Watanabe said, there was no guarantee the next president would.

“Right now it’s the Biden administration, but we don’t know what’s next – it might even be Trump again,” Watanabe told Al Jazeera.

“From a non-American perspective, it’s really hard to believe what America is saying when it says it wants to engage in these plans,” Watanabe added. “There are many challenges to the logistics of this, and then the United States could just throw out the type of engagement as measured by IPEF in the future. Practically, it’s not meaningless, but that’s not significant either.

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