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America’s Rickety Indo-Pacific Framework

Dec 22, 2021
  • Han Liqun

    Researcher, China Institutes of Contemporary International Relations

During the East Asia Summit in late October, U.S. President Biden proposed to build an Indo-Pacific economic cooperation framework in the fields of trade facilitation, industrial chain resilience, clean energy and labor standards.

Secretary of Commerce Gina Raimondo and U.S. Trade Representative Katherine Tai visited East Asia in November for further communication on the matter. Raimondo announced that the United States will start negotiations early next year.

The proposition has caused much speculation among countries in the region. But specific details of the vision are not available, nor are its objectives, contents or modus operandi.

Since former President Donald Trump announced America’s withdrawal from the TPP, the U.S. has been substantively absent from regional economic cooperation. Those projects that the U.S. proposed or tried to advance have been far from comparable to the ambition of the TPP and have contributed little — or even negatively — to regional economic cooperation.

The Obama administration pushed for the TPP in the Asia Pacific and the TTIP with Europe, both of which set off huge waves of action around the world and had an obvious impact on the pattern and prospects of regional economic cooperation. Objectively speaking, the moves had some positive significance.

Joe Biden was Barack Obama’s vice president and a direct participant in the TPP process. His Indo-Pacific economic framework proposition is reminiscent of those earlier American initiatives. A closer analysis, however, reveals many constraints, under which the proposed framework may not have the same impact as the TPP.

Given Biden’s style of presidency, this initiative seems to be primarily aimed at solving political problems instead of promoting regional economic cooperation for real, which fundamentally constrains its prospects. Since taking office, Biden undertaken many diplomatic actions to restore relations with allies, especially those in Europe and the Asia Pacific, in a return to multilateral mechanisms and a remake of America’s international image.

In the Asia Pacific region, Biden has elevated the Quad dialogue, convened AUKUS and increased the U.S. military presence in the Philippines and South Korea, with visible political and security considerations and relatively little attention to economic cooperation. That has rankled America’s regional allies, who find the economic support neither sufficient nor substantive.

Americans with similar concerns have argued that military and security policies alone cannot limit China’s growing influence and that the U.S. must walk on two legs in diplomacy — both in security and economics. In this connection, Biden must make up for the weaker economic link and rebalance American policies. Such is the background for the Indo-Pacific economic framework proposal.

The U.S. participation in Asia Pacific economic cooperation since the 1990s has had an underlying theme from APEC to TPP — to establish a free trade area for the Asia Pacific (FTAAP) in which the U.S. would play a leading role and in which all other countries in the region would be involved. China, Japan and ASEAN countries all worked hard toward that goal. All countries were active in pursuing regional economic cooperation, with a thriving ASEAN, 10+1, 10+3, East Asia Summit and China-Japan-ROK free trade area. Negotiations on RCEP were launched.

The ultimate goal of all these actions was a truly trans-regional free trade regime to facilitate regional trade and investment, promote the movement of people and capital and achieve closer regional economic linkages. But since Trump pulled out of the TPP and introduced the Indo-Pacific concept, the U.S. seems to have moved away from its traditional economic cooperation track. This time Biden’s proposal is clearly not a return to the old way.

It was proposed, first of all, with a different starting point. The Indo-Pacific economic framework has too strong a political and security flavor. Its purpose is not to narrow differences or increase connections but to divide the regional economy into different fragments and create small circles with decoupling in mind.

Second, it is operated at a different level. Designed to regulate China via rules and standards, the Obama TPP at the least was idealistic and constructive to certain extent. Trump’s Indo-Pacific idea was, on the other hand, aimed low. It is a passive and non-constructive attempt. Biden accepted Trump’s concept mainly for its security rather than its economic significance.

For this region, the Indo-Pacific economic framework contains no ambitious objective but only a sort of wait-and-see caution. Regional countries will naturally question the advertised positive impact of the initiative. Further, Asia-Pacific economic cooperation has not stalled because of the U.S. withdrawal but rather has continued to move forward. This year, nearly three years after the CPTPP came into force, China applied to join. The RCEP negotiation was successfully concluded, with a partnership agreement to take effect in 2022.

An upgraded version of the China-ASEAN Free Trade Area came into effect in October 2019 and is now moving toward version 3.0. With the U.S. in the TPP as the Obama administration foresaw it, there might have been some competition with the East Asian Free Trade Area. Instead, under Biden’s current initiative, both countries seem to be minding their own business.

In short, the economic framework will only play a supporting role in America’s Indo-Pacific security strategy. Unless the U.S. puts forward a positive initiative truly aimed at promoting regional economic cooperation, it will be difficult for it to return to the track of regional economic cooperation for a long time. The American presence is felt strongly in security, but if the U.S. continues its current approach, it will increasingly become a bystander, a follower or even a saboteur of economic cooperation.

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