[News Article] The Indo-Pacific Economic Framework: A New U.S.-led Regional Economic framework
Mizanul Amal — FPCI Universitas Airlangga
On the 23rd of May, 2022, The United States has launched the Indo Pacific Economic Framework for Prosperity (IPEF) as a means to increase the U.S. economic influence in the Indo-Pacific region. President Biden has officially introduced IPEF as the new framework at the public event in Tokyo with other 12 important partners — Brunei, Indonesia, Malaysia, Singapore, Thailand, Vietnam, Thailand, Philippines, New Zealand, Australia, Japan, and Republic of Korea which represent almost half of the world GDP. It comes five years after the U.S. under the President Trump withdrew from the Trans-Pacific Partnership (TPP), the IPEF is expected to be a new U.S.-led regional economic statecraft that can counter the high level of China’s economic presence and reassert the U.S. economic and trade engagement with the Indo-Pacific countries.
The Biden administration hopes that the IPEF will bring both benefits for the American and Asian-Pacific workers and business to recover from the pandemic by upholding four pillars of commitments which are ‘Connected Economy, Resilient Economy, Clean Economy, and Fair Economy’. Through these commitments, the purpose of IPEF is to enhance the supply chain’s resiliency, bring economic fairness and inclusiveness, as well as achieve the sustainability of the economic growth for the members of countries. The Asia-Pacific partners were encouraged together to commit to at least one pillar of the IPEF components with the intention to secure the supply chain issues.
However, there are concerns among scholars that the IPEF seems to lack a tangible component on trade and economic agreement. Some scholars believe IPEF is another non-binding agreement that does not provide a free trade agreement (FTA), no market access, and no tariff reductions. Professor of Law at the Chinese University of Hong Kong, Bryan Mercurio stated that what the Asian countries really need is trade and market access especially to the U.S. market, while the IPEF has not outlined or promised any considerations to expand market access and cut some tariffs. It is very hard for the U.S. to create obligations to the Asia-Pacific partners without providing any trade and economic incentives.
References:
CNBC. 2022. The Indo-Pacific Economic Framework: What it is — and why it matters [Online]. Available at www.cnbc.com/2022/05/26/ipef-what-is-the-indo-pacific-framework-whos-in-it-why-it-matters.html [Accessed June 9, 2022].
CSIS. 2022. Unpacking the Indo-Pacific Economic Framework Launch [Online]. Available at www.csis.org/analysis/unpacking-indo-pacific-economic-framework-launch [Accessed June 12, 2022].
The Diplomat. 2022. America’s Pivot to Asia 2.0: The Indo-Pacific Economic Framework [Online]. Available at https://thediplomat.com/2022/05/americas-pivot-to-asia-2-0-the-indo-pacific-economic-framework/ [Accessed June 10, 2022] .
The White House. 2022. FACT SHEET: In Asia, President Biden and a Dozen Indo-Pacific Partners Launch the Indo-Pacific Economic Framework for Prosperity [Online]. Available at www.whitehouse.gov/briefing-room/statements-releases/2022/05/23/fact-sheet-in-asia president-biden-and-a-dozen-indo-pacific-partners-launch-the-indo-pacific-economic-framework-for-prosperity/ [Accessed June 9, 2022].
The Wire. 2022. The What, How and Why of the Indo-Pacific Economic Framework [Online]. Available at www.thewire.in/economy/the-what-how-and-why-of-the-indo-pacific-economic-framework [Accessed June 10, 2022].
