On Thursday, April 21, 2022, US President Joe Biden launched the Economic Framework for Indo-Pacific Prosperity (IPEF) with 12 initial partners.
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The US announced the Indo-Pacific Economic System on Monday with its Asian partners including Australia, Japan and South Korea to boost its economic profile and create another balance for China within Asia.
Extensive initiatives designed to help expand America’s “economic leadership” in the Indo-Pacific region. The group wants to set international rules for the digital economy, supply chains, decarbonization and regulations that apply to workers.
US President Joe Biden said combating inflation is a top priority and the framework is designed to lower costs by making supply chains more resilient in the long run.
Importantly, the IPEF is not a free trade agreement. Biden faces political pressure from the American left and right to avoid free trade agreements.
National Security Adviser Jake Sullivan told reporters on Sunday that the pact was not a security pact and was separate from the Quad defense group, which includes the United States, Japan, India and Australia.
Biden is meeting regional leaders for IPEF and Quad in Tokyo this week.
Despite avoiding trade agreements, the US wants to raise its status in Asia’s economic arena. China dominates, despite US allies Japan and South Korea boasting big economies and quad-member India growing at leaps and bounds.
“The United States must strengthen the economic competitiveness of the region,” said Ali Wein, chief global macro analyst at Eurasia Group.
“Even countries with serious and growing concerns about China’s foreign policy and strategic objectives are recognizing that they cannot make a meaningful separation from the Chinese economy in the short term,” Wyne said. We will try to bring it out as much as possible,” he said. Pacific Economic Framework.”
US officials cautiously avoided mentioning China in their discussion of the IPEF, denying that the IPEF was a “closed” group as China claimed.
China’s state-run Global Times reported on Saturday that “the goal of former Vice President Biden’s trip to Korea and Japan is to establish a new political stance toward China by forming alliances with Washington in the Asia-Pacific region.”
“It is not surprising that China is concerned about the number and diversity of countries that have expressed interest and enthusiasm for the IPEF,” Sullivan told reporters on Sunday.
In an interview with CNBC’s “Capital Connection” on Monday, before details of the IPEF were released, Yuki Tatsumi, a senior research fellow at the Washington DC Stimson Center, said the plan would be strong in the region.
She said this is similar to the Trans Pacific Partnership, in which the United States struggled to join the Trans Pacific Partnership during the Trump administration.
Tatsumi also said the US sharpened its approach to China during the administrations of former Presidents Donald Trump and Barack Obama.
“So, whatever new policy initiatives come out of Washington, the strategic competition between the US and China will intensify,” she added. “The new framework will accelerate this trend.”
— CNBC’s Vicky McKeever and Ravi Buddhavarapu contributed to this report.