On Monday, during his first official visit to Japan, US President Joe Biden announced the launch of a new project called the ‘Indo-Pacific Economic Framework’, which the White House claims to be an economic vision for Asia in an obvious bid to try and counter China. Thirteen countries have signed up to the agreement, including India, Japan, South Korea, Australia, New Zealand, and all of the ASEAN members, excluding Myanmar, Cambodia, and Laos (which are ostracized for being too pro-China).
But what exactly does this agreement mean? And what does it offer and consist of? That’s a good question, and most people are wondering the same thing. The Indo-Pacific Economic Framework (IPEF) is not a trade deal, is not an investment agreement, not a treaty, and not an institution; it is an American slogan at best, a slogan which is really just focused on indirectly attacking China, rather than actually offering any serious economic commitments, a recognition that they have long lost the economic debate in Asia, but nonetheless are unwilling to do much about it.
Why is the US proposing such a bizarre and unsubstantial initiative? Right now, American trade and economic policy is in a bind. Owing to the legacy of former President Donald Trump, US domestic politics is strongly focused on trade protectionism in the name of ‘America First’, which has evolved into bipartisan opposition to free trade and a belief that American jobs should be prioritized and established where possible. Big free trade agreements, as it goes, are argued to undermine America’s trade competitiveness, unless they are secured on lopsided terms favouring the United States.