On May 23rd, President Biden and many other world leaders in countries within the Indo-Pacific region endorsed a new economic platform enabling countries to cooperate on supply chains, digital governance, and sustainable energy sources. “The future of the 21st-century economy is going to be largely written in the Indo-Pacific and our region,” Mr. Biden said at the launch event. Biden was accompanied by Prime Minister Fumio Kishida of Japan and Prime Minister Narendra Modi of India. Other member nations’ representatives were also present virtually.
The last partnership the U.S Former President Donald Trump had pulled out of was the Trans-Pacific Partnership back in 2017, which is a proposed trade agreement signed by countries such as Australia, Japan, Canada, Singapore, and the United States. The trade proposal was aimed to “rewrite the rules of trade” in order to benefit America’s middle class by eliminating or reducing tariffs. According to the White House, the collective nations in the new framework represent roughly 40% of global GDP. U.S. strategic allies Japan and South Korea joined as well as seven nations in the 10-nation Association of Southeast Asian Nations: Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
A notable difference between the Indo-Pacific Economic Framework and the Trans-Pacific Partnership signed in 2016 is that the member countries of the new economic alliance do not plan to negotiate lower tariffs or steps to clear away barriers to market access.
The Indo-Pacific Economic Framework marks the Biden administration’s most ambitious attempt to build economic ties with Asian nations. The creation of this framework certainly represents a novel and innovative approach that brings countries into cooperation beyond a traditional trade agreement. According to U.S officials, the framework will center on four pillars: “Cooperation on digital trade; improving the resiliency of supply chains; ramping up clean energy; and putting in place strong tax, anti-money-laundering and anti-bribery measures.”
For the United States, this framework really establishes an American presence in the Indo-Pacific region. While this framework is not a free trade agreement, there certainly is room for this framework to advance into potential trade deals with member countries in the future. Ultimately, this framework is not really a change in policy or breakthrough for trade across the Pacific but rather a means that enables the U.S. to become a key player action in the region.
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