US wins by courting ASEAN countries to join economic deal — Radio Free Asia

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The United States scored a victory in its effort to counter Beijing’s influence in Southeast Asia by enticing most members of the ASEAN bloc to join the new Indo-Pacific Economic Framework Agreement for the prosperity of the Biden administration, analysts say.

Although IPEF does not have the clout of a formal international trade agreement, analysts say the interest that seven members of the Association of Southeast Asian Nations have shown in it reflects their desire to Greater US Commitment to Balancing a China-Dominated Regional Economy.

Even in the weeks leading up to President Joe Biden’s unveiling of the deal at a conference in tokyofew ASEAN states are expected to join, an expert said.

“Well, I was surprised that so many ASEAN countries were initially part of the agreement. It’s kind of a coup for the United States,” said Elina Noor, director associate at the Asia Society Policy Institute in Washington, BenarNews.

The Biden administration has touted the framework as the bulwark of its economic strategy in the Indo-Pacific region. IPEF’s stated goals are to ensure smooth and flexible flow of goods, use of the same digital economy standards, green and clean work processes, and fair and honest business.

“IPEF will strengthen our ties in this critical region to define the coming decades for technological innovation and the global economy,” the White House said in a statement launching IPEF on May 23.

Besides Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam – all members of the 10-nation ASEAN bloc – Australia, India, Japan, New Zealand and South Korea also signed up as initial members.

Hunter Marston, an international affairs analyst at the Australian National University, expected Singapore and Thailand to join IPEF at first, but other ASEAN members would join later.

“[I]it surprised me a bit [that others joined initially]. … It was a major political victory for Biden,” Marston told BenarNews.

“It shows that the region still supports the United States. It’s a signal that there’s a lot of interest in Washington’s continued engagement in the region. They see Washington’s engagement as essential to maintaining the balance of power in the region.

China’s economic reach in Southeast Asia dwarfs that of the United States

China has been ASEAN’s largest trading partner for 12 consecutive years, with trade in 2020 reaching nearly 517 billion U.S. dollars, according to the regional block statistics, and 685 billion dollars according to Chinese statistics. On the other hand, in 2020 United States-ASEAN Trade was $362 billion.

Meanwhile, a regional survey conducted late last year among political experts in ASEAN states showed that China is still considered the most influential economic and political power, but that ” created more admiration than affection”. Trust in Beijing fell about three percentage points, while trust in the United States rose 18% from a year earlier.

“China is the only major power to have increased its negative ratings…the majority are concerned that such economic clout, combined with China’s military power, could be used to threaten the interests and sovereignty of their country”, according to the State of Southeast Asia 2021 Survey published by the ISEAS-Yusof Ishak Institute in Singapore.

In such a scenario, “if there is one thing the United States could do to reassure a Southeast Asia worried about American engagement in the region, it is to expand economic ties,” he said. analyst Anne Marie Murphy of Seton Hall University told BenarNews before Biden launched IPEF.

According to Marston, a security partnership alone would make ASEAN uncomfortable.

“It’s less attractive without an economic component because an economic role gives ASEAN a pretext to work with the United States on other fronts that aren’t aimed at containing China,” he said. .

four pillars

But does IPEF go far enough?

“The setting doesn’t have much substance,” Marston said.

He was referring to the fact that the IPEF is not a trade agreement like the CPTPP, or the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership, or its predecessor, the Trans-Pacific Partnership.

The United States once belonged to the latter and conducted negotiations on the latter until President Donald Trump withdrew the superpower from the deal. China is not part of the CPTPP, but has applied to join, and Singapore, an influential economic member of ASEAN, has backed Beijing’s bid.

The main trading bloc in the region is the Regional Comprehensive Economic Partnership (RCEP), of which the United States is not a member, but which includes China, most of the ASEAN states, as well as other major Indian economies. -peaceful.

The IPEF is not an RCEP or a CPTPP, according to Marston.

“It’s definitely not a trade deal,” he said.

“Calling it an economic framework is preferable, as watery as that sounds. It’s like COP 26 – a commitment to participate that requires no application,” he said, referring to carbon reduction pledges made at the 26th UN Climate Change Conference.

This means that the United States does not offer its partners in the agreement access to its markets or any tariff reduction. Therefore, any trade agreement under the IPEF – whether one insists on green protocols or anti-corruption mechanisms – does not have binding clauses, unlike a trade agreement where, in exchange for a market access, partners must adhere to certain standards.

The IPEF is the opposite of a multilateral trade agreement, “the traditional holy grail of free traders,” according to Robert Kuttner, a professor at Brandeis University.

“Countries can decide which areas they want to join; and not all agreements with all participating countries will be the same,” he wrote in an article in Prospect magazine.

Some critics say this is why Washington found so many Southeast Asian takers as IPEF’s initial partners.

Analyst Robert Manning, who calls the move away from what used to be called the TPP “a major strategic mistake,” is one of them.

“I was not surprised [so many countries joined]. The United States has lowered the bar on all four pillars. Nobody had to conform to any standards,” Manning, senior fellow at the Atlantic Council, a Washington think tank, told BenarNews.

The four pillars Manning refers to are a resilient economy, or creating a robust supply chain; the connected economy or the guarantee of digital economic standards; clean economy or promotion of decarbonization; and fair economy, or the fight against corruption. Members can choose which Pillar or Pillars they wish to join – they still need to commit.

‘Put a foot in the door’

After Biden launched the IPEF, China made noise about the deal.

The United States was “politicizing, militarizing and ideologizing economic issues and using economic means to coerce countries in the region into choosing sides between China and the United States”, so Wang Yi, the Chinese minister of Foreign Affairs, described it.

Marston, however, says he doesn’t believe China is upset.

“I don’t think China should be worried about this framework and Beijing understands what I think,” he said.

“Compared to RCEP…it’s just an agreement on open internet commerce and nothing more.”

Marston said many states that joined IPEF did so because of the digital component.

“Essentially, they can set standards for e-commerce… e-commerce is huge in Southeast Asia,” he said.

“Indonesia and Vietnam derive much of their economy and GDP from e-commerce, which gives them the advantage of creating an open commercial digital space,” Marston said.

Many countries have also joined IPEF because they probably hope it will lead to a trade deal, said Noor, the Asia Society Policy Institute expert.

“In some countries there is a feeling that this is the starting point for market access,” she said.

“The idea is to get a foot in the door, to engage with the United States in some form of economic arrangement so that it leads to something more substantial.”

BenarNews is an online news service affiliated with RFA.

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