TOKYO (AP) — President Joe Biden faced a dilemma over trade in Asia: He couldn’t just rejoin the Trans-Pacific Partnership…
TOKYO (AP) — President Joe Biden faced a dilemma over trade in Asia: He couldn’t simply rejoin the Trans-Pacific Partnership that his predecessor had pulled the United States out of in 2017. Many related trade deals, regardless of their content, had become politically toxic to American voters, who associated them with job losses.
So Biden came up with a replacement. During Biden’s visit to Tokyo, the United States on Monday announced the countries that will join the new Indo-Pacific Economic Framework. In the trade agreement tradition, it is better known by its initials: IPEF. (Pronounced EYE-pef.)
WHO IS IN?
The framework has 13 members, including the US, which represents 40% of the world’s gross domestic product: Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. .
WHAT WOULD IPEF DO?
That is yet to be resolved. Monday’s announcement marks the start of talks between participating countries to decide what will ultimately be in the framework, so descriptions for now are largely aspirational. In a broad sense, it is a way for the US to set a marker signaling its commitment to remain a leading force in Asia.
“We are writing the new rules for the 21st century economy,” Biden said in the announcement. “They are going to help the economies of all our countries grow faster and more fairly. We will do so by taking on some of the most acute challenges holding back growth.”
White House national security adviser Jake Sullivan said IPEF is “focused on further integrating the Indo-Pacific economies, setting standards and rules, particularly in new areas like the digital economy, and also trying to to ensure that there are secure and resilient supply chains. .”
The idea that new standards are needed for world trade is not just about discontent among American voters. It is an acknowledgment of how the pandemic has disrupted the full extent of supply chains, closing factories, delaying cargo ships, clogging ports and causing higher inflation globally. Those vulnerabilities became even clearer in late February, after Russian President Vladimir Putin ordered the invasion of Ukraine, triggering dangerously high jumps in food and energy costs in some parts of the world.
WHO WILL CONFIRM THE DETAILS?
Negotiations with partner countries will revolve around four pillars, or themes, with work divided between the US trade representative and the Commerce Department.
The US trade representative will handle talks on the “fair” trade pillar. This would likely include efforts to protect American workers from job losses, as China’s entry into the World Trade Organization in 2001 led to serious layoffs in manufacturing. Those job losses have ripped apart parts of the US, angered voters and helped propel the political rise of Donald Trump, who, as president, pulled the US out of the Trans-Pacific Partnership almost as soon as he was sworn in in 2017. .
The Commerce Department will oversee negotiations on the other three pillars: supply chain resilience, infrastructure and climate change, and tax and anti-corruption. Commerce Secretary Gina Raimondo flew with Biden on Air Force One to Japan. She was also by the president’s side during his time in South Korea, where he highlighted investments in American factories by automaker Hyundai and electronics giant Samsung.
An additional novelty is that countries can choose which pillars they want to belong to, according to an administration official. They are not required to endorse all four.
WHO ELSE CAN JOIN THE CLUB?
The White House has said that IPEF will be an open platform. But he has faced criticism from the Chinese government that any deal could be an “exclusive” cabal that would lead to further turmoil in the region.
And there are sensitivities to China, the world’s second largest economy, in the creation of IPEF. The autonomous island of Taiwan, which China claims as its own, is being excluded from the pact. This exclusion is notable as Taiwan is also a leading manufacturer of computer chips, a key element of the digital economy that will be part of the IPEF negotiations.
White House national security adviser Jake Sullivan said on Sunday that any trade talks with Taiwan would be one-on-one.
HOW LONG WILL IT TAKE?
Once talks begin, negotiations are expected to last 12 to 18 months, an aggressive timeline for a global trade deal, according to an administration official. The official insisted on anonymity to discuss the plans, adding that building consensus within the US will also be key.
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