President Biden Announces New Asian Trade Initiative

by Wall Street Rebel - Michael London | 05/23/2022 11:46 AM
President Biden Announces New Asian Trade Initiative

President Joe Biden gave a speech in Tokyo regarding the Indo-Pacific Economic Framework (IPEF), a comprehensive economic pact between a dozen countries in the Indo-Pacific region and the United States intended to compete with China's influence in the region.


President  Joe Biden announced a plan on Monday that he said would bring the economies of the United States and Asia closer together. However, the plan does not include a free trade deal, and the details are unclear.

The newly christened organization known as the Indo-Pacific Economic Framework for Prosperity (Indo-Pacific Economic Framework for Prosperity) aims to increase collaboration on trade, energy, the supply chain, and anti-corruption initiatives to compete with China's expanding influence. To entice countries to join and remain a part of the bloc, the framework leaders have not yet fleshed out how the goals would be reached, and in fact, they do not even designate the initiative as a pact. This is part of an open-ended strategy.

Biden, the Prime Minister of Japan Fumio Kishida, and the Prime Minister of India Narendra Modi were joined by representatives from other member countries who appeared virtually at an official launch event in Tokyo that was designed to convey togetherness. Several of the countries did not send their most senior leader to the announcement, which may indicate that the new framework is not generating excitement in the target audience.

Biden stated that "we are establishing the new rules for the economy in the 21st century that will help all of our countries' economies grow faster and fairer." "We are writing the new rules for the economy in the 21st century."

Leaders from all around the area have been advocating for a classic free-trade agreement that would enable Pacific nations to compete with China's economic hegemony and open up markets in both the United States and Asia. But the Pacific Trade Pact that was negotiated by the Obama administration a decade ago is politically poisonous in the United States. The labor movement on the left has criticized it, and former President Trump gave up on it when he ran against it in the 2016 election.

During a news conference with Vice President Biden earlier in the day, Foreign Minister Kishida lauded the new framework as a positive sign that the United States was engaged in the region. However, he also explained that the framework did not go far enough.

He stated that "our viewpoint has not changed" in response to the question. The Trans-Pacific Partnership was a trade agreement negotiated during the Obama administration. "We think it's beneficial for the United States to return" to the agreement.

A similar sentiment was expressed by the Prime Minister of Singapore, Lee Hsien Loong, who stated that the new initiative has the potential to serve as "a valuable platform for the United States to engage in economic diplomacy in the region." He also stated that he is hoping for "more ambitious" collaboration in the years to come.

The Indonesian Minister of Trade, Muhammad Lutfi, issued a warning that the organization should not just be used to control other countries. He was presumably referring to China when he made this statement.

There are no legally binding obligations for the countries that are part of the group, and there is no expectation that any part of the plan, which has not yet been set down, will require approval from Congress in the United States. A fact sheet that was two pages long featured some aspirational language but did not include any details.

Despite this, the White House highlights it as the most significant economic outcome of Vice President Biden's trip to Tokyo and Seoul. Officials from the administration have made statements such as the following: "The group of countries will eventually be able to avert problems in the supply chain by communicating better," and "The group of countries will establish laws to better control and integrate technology."

But since nothing has been agreed upon or put into writing, that is still more of a hope than a promise.

Gina Raimondo, the Secretary of Commerce, was quoted as saying to the press that this is "the beginning — to begin and get to work and discuss the next steps ahead as we negotiate the specific terms and develop the details of this framework and establish a new approach to regional economic engagement."

According to Jake Sullivan, the president's national security advisor, the fact that the new framework is not a conventional trade deal is not a flaw but rather a feature of the agreement.

He stated, "Some traditionalists in the free-trade movement have raised reservations about it." The new environment and the new difficulties that we are facing necessitate a new strategy, which is the fundamental view that we hold.

Katherine Tai, the senior trade representative for the United States, admitted that the primary reason the United States is not rejoining the trade accord from the Obama administration is political.

She stated that the most significant obstacle was the lack of domestic support for the bill, which prevented Congress from passing it. "That should serve as a very, very powerful lesson," one person said.

She said that the lesson was that the previous agreement was "quite fragile" because the United States was unable to deliver on its promises, which included lowering tariffs on imports, and that the collapse of the agreement helped inform the current thinking in the attempt to create a deal that goes beyond trade alone.

Officials claim that a lack of consistency in rules and regulations has become an equally significant barrier to trade as tariffs. The new framework would solve this problem by addressing the lack of uniformity in rules and regulations.

The United States of America is one of the 12 countries that have signed on so far. The other countries are Australia, Brunei, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand, and Vietnam. The United States of America is the only country that has done so so far.



                       President Biden enlists Asian trade bloc | Morning in America        




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