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Biden declares launch of Indo-Pacific economic framework

The Biden administration is lagging behind China in working out a trade strategy for the Asian market. (AFP)
The Biden administration is lagging behind China in working out a trade strategy for the Asian market. (AFP)
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23 May 2022 07:05:44 GMT9
23 May 2022 07:05:44 GMT9

TOKYO: US President Joe Biden officially announced in Tokyo on Monday the launch of the Indo-Pacific Economic Framework, aimed at breaking away from excessive dependence on China in light of economic security.

The US-led initiative is intended to build a new economic order together with democratic allies and partners in Asia, after Washington’s withdrawal from the Trans-Pacific Partnership free trade framework in 2017 under the administration of then US President Donald Trump.

Japanese Prime Minister Fumio Kishida has announced that Japan will join the IPEF, which will bring participating nations under common trade and investment rules in four areas–trade including the digital economy, supply chains, infrastructure and decarbonization, and taxation and anti-corruption measures.

Initially, 13 countries, including Japan, the United States, India, South Korea, Australia, New Zealand, Indonesia and Singapore, are seen taking part in the IPEF.

The 13 nations account for about 40 pct of world gross domestic product, higher than the proportion for the Regional Comprehensive Economic Partnership among 15 nations including Japan, China and South Korea, and that for the 11-member TPP including Japan and Australia.

Taiwan is eager to join the IPEF, but will not join it. China opposes participation by Taiwan, which it regards as a renegade province.

The IPEF will bring a victory in the competition in the 21st century, Biden said in a ceremony to mark the launch of the initiative.

Kishida said he welcomes and strongly supports the IPEF, while Indian Prime Minister Narendra Modi said the framework will make the Indo-Pacific region an engine of economic growth.

Biden arrived in Japan on Sunday for his first visit to the country since he took office in January last year. He held a meeting with Kishida in Tokyo on Monday and is slated to attend a Quad summit with Kishida, Modi and Australian Prime Minister Anthony Albanese, who was inaugurated Sunday, in the Japanese capital Tuesday.

Unlike conventional free trade agreement, the IPEF will not handle tariff cuts, offering limited benefits to participating countries hoping for the United States’ aggressive market liberalization.

The Biden administration is lagging behind China in working out a trade strategy for the Asian market. As China applied for TPP membership last year, the Biden administration aims to play catch-up and boost the US presence in Asia.

IPEF members hope to kick off negotiations at an early date with a view to working out broad rules by the end of 2023.

JIJI Press

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