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The 13 initial members of the Indo-Pacific Economic Framework (IPEF), are the U.S., Japan, India, South Korea, Australia, Indonesia, Thailand, Singapore, Malaysia, the Philippines, Vietnam, New Zealand and Brunei, according to a Biden administration statement.
While the IPEF is presented by its members as a “commitment to a free, open, fair, inclusive, interconnected, resilient, secure, and prosperous Indo-Pacific region” it is also an alternative to China’s growing commercial presence across the Asia-Pacific.
With 60 percent of the world’s population, the Indo-Pacific is projected to be the largest contributor to global growth over the next 30 years.
The IPEF will focus on four policy pillars, each led by an individual agency:
- Connected Economy, led by the U.S. Trade Representative, or USTR;
- Resilient Economy, which covers supply chain resilience topics, led by the Department of Commerce, or DOC;
- Clean Economy, which covers infrastructure, clean energy, and decarbonization topics led by the DOC;
- Fair Economy, which covers tax and anti-corruption topics led by the DOC.
The decision [of Thailand to join IPEF] came as a big surprise for analysts and pundits all too familiar with the long-standing recalcitrance of the Prayut administration about joining the long-awaited Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), wrote the Bangkok Post in an editorial piece published yesterday.
However this could be explained by the fact that the IPEF is not a new avatar of a tariffs-based Asia trade deal like the China lead RCEP, or the now defunct Trans-Pacific Partnership.
High standards and inclusivity
Unlike other free trade agreements, such as the RCEP and the CPTPP, the IPEF does not include negotiations to lower tariffs between members. Speaking at the launch event in Tokyo, President Joe Biden emphasized that “The key to our success will be the framework’s emphasis on high standards and inclusivity.”
Several countries were left out of the IPEF launch, given political and human rights concerns, like Myanmar, Laos and Cambodia.
One issue has been whether Taiwan will join the framework: a move that could upset China and complicate efforts to bring in Southeast Asian nations, many of which have close ties with China.
Seven of the 13 members of the IPEF (Japan, Brunei, Malaysia, Singapore, Vietnam, Australia and New Zealand) also belong to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), originally called the Trans-Pacific Partnership free trade deal (TPP), which Biden’s predecessor Donald Trump withdrew the United States from in 2017.
Declining U.S. economic presence in the region
After Trump pulled the United States out of the TPP, the declining U.S. economic presence in the region became more obvious when the RCEP kicked off in January this year. The China sponsored mega trade deal involves 15 Asia-Pacific countries, including Japan, China, South Korea, Australia and members of the Association of Southeast Asian Nations.
China, meanwhile, has criticized the IPEF during a news conference on May 12, when Foreign Ministry spokesperson Zhao Lijian said that the Asia-Pacific region is “not a chessboard for [a] geopolitical contest,” and that China rejects “small circles [that] smack of the Cold War mentality.”