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image source,Archyde.com
U.S. President Joe Biden, Indian Prime Minister Narendra Modi and Japanese Prime Minister Fumio Kishida attended the launch event of the Indo-Pacific Economic Prosperity Framework (IPEF) on May 23 at the Izumi Garden Gallery in Tokyo, Japan.
On the afternoon of May 23, US President Biden officially announced the launch of the “Indo-Pacific Economic Framework” (IPEF) in Tokyo, Japan. Archyde.com said the move was an attempt by the United States to salvage the losses caused by Trump’s withdrawal from the Trans-Pacific Partnership (TPP).
The first batch of 13 member countries are the United States, South Korea, Japan, India, Australia, New Zealand, Indonesia, Thailand, Malaysia, the Philippines, Singapore, Vietnam, and Brunei. The participating countries together account for about 40% of the world economy,
“This framework is a commitment to working with our close friends and partners in the region to address the most important challenges of ensuring economic competitiveness in the 21st century,” Biden said.
U.S. officials have also mentioned China’s role, such as “providing Indo-Pacific countries with a different approach to key issues than China”; another example, “arrangements independent of China.”
“Four Pillars”
image source,Archyde.com
The “Indo-Pacific Economic Framework” was first proposed by U.S. President Biden at the East Asia Summit in October 2021, and he declared that he would establish a multilateral partnership that adapts to needs.
According to the information disclosed so far, the main features of the Indo-Pacific economic framework are “four pillars” and “semi-inclusiveness”.
The “Indo-Pacific Strategy of the United States” released by the White House in February this year explained that the “Indo-Pacific Economic Framework” aims to promote high-standard trade, manage the digital economy, and improve supply chain resilience and security. , promote transparent, high-standard infrastructure investments and build digital connectivity, among others.
Some American media described it as “four pillars”, namely supply chain resilience and security, digital trade fairness, infrastructure and green energy, taxation and anti-corruption.
Biden’s May 21 press conference presented his content in a slightly different order, but the content was largely the same. He said that the IPEF is “an economic strategy for the entire Indo-Pacific region, aimed at strengthening cooperation among member states in areas such as infrastructure, digital economy, clean energy, global minimum taxation, and supply chains.”
Taken together, the “Indo-Pacific Economic Framework” aims to strengthen integration among member countries in four areas: digital economy, supply chain, green energy, taxation and anti-corruption.
“Semi-Inclusive”
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Biden also said at the above-mentioned press conference that the content of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which the United States has withdrawn from, is “separate” and “semi-inclusive”.
The Indo-Pacific Economic Framework is not a free trade agreement, but a more relaxed and tailored arrangement than traditional free trade agreements.
According to the framework, member states must sign up to all components in at least one module, but do not have to participate in all modules, and the framework will not include market access provisions such as lowering tariff barriers.
The New York Times said that after signing the agreement, all 13 member states will be allowed to choose one of four areas to negotiate the agreement without having to make commitments in all areas。Negotiations should be delineated by the end of June or early July, with a Biden administration hoping to hammer out a deal in 12 to 18 months before submitting it to each administration for ratification.
This arrangement allows the United States to avoid market access issues such as the reduction of tariff barriers that are highly sensitive at home, and labor organizations in the United States strongly oppose similar arrangements. The previous Trans-Pacific Partnership (TPP) was also aborted due to a lack of domestic support.
However, this feature of IPEF has also been criticized by the outside world – it may need to meet various requirements on taxation, labor protection, and clean energy, but it is difficult to obtain benefits such as low tariffs and new markets.
“It appears that the White House has decided to make the IPEF launch more like an open bar party for everyone, but if the administration wants to,” said Matthew Goodman, a trade expert at the Center for Strategic and International Studies in Washington. Getting countries on board will ultimately have to provide more real benefits.”
China’s role behind IPEF
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Profile photo of Biden and Xi Jinping shaking hands
U.S. officials are not shy about IPEF’s use of regional economic influence against China. In an interview over the weekend, U.S. Trade Representative Dai Qi said the framework was designed to “effectively counter China’s growing influence” and was “an arrangement independent of China.”
U.S. Commerce Secretary Raimondo also said the “new economic framework” also includes coordinated export controls to “restrict exports of ‘sensitive’ products to China.”
“In any event, this is the most important international economic engagement the United States has ever had in the region,” Raimondo said, adding that the launch of the IPEF “marks an important turning point that will restore U.S. economic leadership in the region, and Provide Indo-Pacific countries with a different approach than China to these critical issues.”
For China, among the countries participating in the agreement, Japan and South Korea have close economic and trade exchanges and technical exchanges with China.
In a joint statement from Biden and South Korean President Yoon Seok-hye, the two sides pledged to deepen and expand cooperation in “critical and emerging technologies and cybersecurity,” including semiconductors, environmentally friendly electric vehicle batteries, artificial intelligence, quantum and biotechnology, and biomanufacturing. and autonomous robots.
The statement also said that in order to “prevent advanced technologies from being used to infringe national security and economic security,” South Korea and the United States decided to “strengthen official cooperation in investment approvals and export controls involving sensitive technologies.”
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The semiconductor field is the core area of confrontation between China and the United States in the “technological cold war”.
South Korea’s “Chosun Ilbo” analyzed that Biden took the Samsung factory as his first trip to South Korea, or intended to convey the message that he hopes to use South Korea as a major partner in the restructuring of the semiconductor supply chain led by the United States. This move also made it clear again. Korean semiconductors are the “core strategic assets” that support the strategic value of the Korea-US alliance.
The semiconductor field is the core field of Sino-US confrontation in the “technological cold war”.
Zhang Monan, a researcher at the Strategic Research Department of the China Center for International Economic Exchanges, told Chinese media that the United States hopes to use the “Indo-Pacific Economic Framework” to “decouple” from China, and to attract more economic and trade partners under the existing conditions, find supply chain alternatives, and more importantly To win over other countries to form a “encirclement” of China and exclude China from the regional trade system.
Zhang Monan said that the “Indo-Pacific Economic Framework” is already a geo-economic concept to a large extent, and it fully fits and complements the current “Indo-Pacific strategy” of the United States. The United States hopes to use the “Indo-Pacific Economic Framework” to make up for the lack of economic pillars of the “Indo-Pacific Strategy”, holding both the “military stick” and the “economic stick”.
On May 22, Chinese Foreign Minister Wang Yi said, is the United States politicizing, weaponizing, and ideological about economic issues, and using economic means to coerce regional countries to choose sides between China and the United States? Regional countries have reasons to ask the United States to answer honestly.
He also said that China, like countries in the region, is happy to see initiatives conducive to strengthening regional cooperation, but opposes attempts to create split and confrontation. Which category does the US “Indo-Pacific Economic Framework” belong to? First of all, we must draw a big question mark and see through the hidden plot behind it.
After Obama, the United States once again “return to Asia”?
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U.S. President Barack Obama holds bilateral talks with Chinese President Xi Jinping at the Nuclear Security Summit in Washington, D.C., March 31, 2016.
During the presidency of former US President Barack Obama, the Trans-Pacific Partnership (TPP) was vigorously promoted in order to check China’s influence, which has a high threshold for trade liberalization. But his successor, President Donald Trump, withdrew from the pact in 2017.
After the U.S. announced its withdrawal from the TPP in 2017, Japan led negotiations to restructure the CPTPP. In 2018, 11 countries including Australia, Canada, Chile, Japan, Mexico and New Zealand signed the CPTPP in Santiago, Chile.
In September 2021, China has officially applied to join the CPTPP. CPTPP has lower tariffs and higher trade freedom, and also covers Canada, Peru and other American countries, which can enhance the breadth and depth of China’s participation in leading the Asia-Pacific regional economic cooperation. In addition, when the CPTPP takes effect and zero tariffs are implemented among member states, if China is excluded, it may directly affect the competitiveness of Chinese goods in the Asia-Pacific market.
The United States withdrew from the free trade agreement that was constructed to check and balance China, but China then actively applied to join. Not only that, in November 2020, the Regional Comprehensive Economic Partnership (RCEP), which includes China and the 14 Asia-Pacific countries, was signed on Sunday (November 15). This agreement is considered to be the largest free trade agreement in the world due to the size of the population, trade and economy covered. However, the United States, the world’s largest economic power, is not among them.
Just less than five months later, Biden proposed the “Indo-Pacific Economic Framework” for the first time, seeking to compete with China for regional economic influence.