U.S. Sets to Launch IPEF to Counter China in the Indo-Pacific

The U.S. launched the Indo-Pacific Economic Framework (IPEF) on Monday to strengthen economic cooperation and the U.S. engagement within the region, as part of its efforts to counter Chinese economic and military influence. The new economic agreement has been rolled out as the Biden administration has been reluctant to pursue trade agreements that are unpopular in the United States.

Biden announced in Tokyo the dozen founding partners for the IPEF, saying that it was a step to write the new rules for the 21st century economy.

The signatories will still need to negotiate the details in each are, including supply chains, digital trade, clean energy and anti-corruption, before signing any agreements. It’s not clear if the Congress would have to sign off on the agreements as they do trade pacts.

The U.S. has tried to increase its influence in the region during the Obama administration through the Trans Pacific Partnership (TPP) but the deal struggled to gain support from lawmakers and Trump withdrew from the pact after taking office.

Biden administration has acknowledged that trade deals are hard to gain support in the United States. The U.S. Trade Representative Tai said American trade policy was often reduced to a zero sum game for decades, leaving many of the U.S. workers behind.

The IPEF will be mostly attractive for the countries in the region as a way to keep U.S. presence in the region if it does not offer lower tariffs or access to the huge U.S. market. The region’s nations would prefer the U.S. to rejoin the TPP, but they know it is almost impossible now.

Japanese Prime Minister Kishida on Monday publicly and privately appealed to Biden to rejoin the TPP. In his joint press conference with Biden, Kishida said they were hoping the return of the United States.

The other countries participating in the pact are Australia, Brunei, India, Indonesia, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam.

Together with the United States, the participants represent 40% of world GDP.

China has criticized the agreement, saying it would create turmoil in the region.

U.S. national security adviser Sullivan said the agreement does not force countries to choose between the U.S. and China. He added that it is about offering a value proposition that countries take seriously.

Taiwan is not included in the pact as the Biden administration did not want to provoke China further.

Instead, the U.S. is working directly with Taiwan on high-technology issues, including semiconductors and supply chains.

Biden also said he has not decided whether to lift trade tariffs on China imposed by the Trump administration.

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