The US’ Indo-Pacific Economic Framework: the US’ Answer to the RCEP?
On May 24, 2022, President Joe Biden of the United States together with representatives of Australia, Brunei, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam formally launched the bedrock of the Indo-Pacific Economic Framework (IPEF). Many experts (for example, Forough 2022) believe that the IPEF is designed to counter Chinese influence in the region. Furthermore, many also believe that the IPEF is the US’ answer to the criticisms that the US is not engaged enough economically in the region while overwhelmingly approached the Asia-Pacific through military and political lens. In addition, Arasasingham et al. (2022) argue that the IPEF is a way for the US to reassert its leadership in the Indo-Pacific after the US withdrawal from the Trans-Pacific Partnership in 2017.
The IPEF itself will manage four aspects of the global economy: connected economy, resilient economy, clean economy, and fair economy. In other words, the IPEF will try to create and manage an economy that is highly connected to other parts of the world, especially the global economy, able to heed off disruptions to the global supply chain, takes into account the environmental concerns that result from economic development, and an economy that is hostile to corruption, tax evasion, and money laundering (The White House 2022).
For many that lament that the US’ approach to the Indo-Pacific is viewed mainly through military lens, this is a good move on the part of the United States as the US is finally providing an alternative to Chinese economic leadership in the region (Arasasingham et al. 2022). However, whether the IPEF can really provide an alternative to the RCEP is debatable. For one, the nature of the IPEF itself is unclear. The White House (2022) is not calling the IPEF a ‘trade deal’. There is no commitment from the US to provide eased US market access to the members of the IPEF. This should not be surprising given that President Biden (2020, p.70) has promised that the US “will not enter into any new trade agreements until we have invested in Americans and equipped them to succeed in the global economy.” Therefore, based on the fact-sheet published by The White House (2022), the IPEF itself is only a set of rules and frameworks to guide economic intercourse between the members of the IPEF.
Furthermore, one question must be asked: if the US is unwilling to provide market access to the members of the IPEF, then why must other countries implement those potentially-disruptive frameworks in the first place? This is the IPEF’s weakness vis-à-vis the RCEP: the RCEP provides market access to China. The IPEF does not. Thus, the US will have to give other incentives to entice countries to join. In addition, the negotiations itself have not even started yet as the event on May 24, 2022 is just a “collective discussions toward future negotiations” (US Embassy and Consulates in India 2022).
In conclusion, is the IPEF the US’ answer to the RCEP? It is hard to answer this at the moment as the IPEF itself is still an abstract concept that has not been materialized. However, seeing that the IPEF does not provide market access and that the IPEF itself is not a trade deal, it is hard to see the IPEF being a serious rival to the RCEP at the moment.
Trystanto is the head of the Research and Development Division of Foreign Policy Community Indonesia chapter UGM. This article represents the author’s own views and not necessarily those of FPCI UGM
Arasasingham, A., Benson, E., Goodman, M.P. and Reinsch, W.A. (2022). Unpacking the Indo-Pacific Economic Framework Launch. [online] Center for Strategic and International Studies. Available at: https://www.csis.org/analysis/unpacking-indo-pacific-economic-framework-launch [Accessed 27 May 2022].
Biden, Jr., J.R. (2020). Why America Must Lead Again: Rescuing US Foreign Policy after Trump. Foreign Policy, 99(2), pp.64–76.
Forough, M. (2022). America’s Pivot to Asia 2.0: The Indo-Pacific Economic Framework. [online] The Diplomat. Available at: https://thediplomat.com/2022/05/americas-pivot-to-asia-2-0-the-indo-pacific-economic-framework/ [Accessed 27 May 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] The White House. Available at: https://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 27 May 2022].
US Embassy and Consulates in India (2022). Statement on Indo-Pacific Economic Framework for Prosperity. [online] U.S. Embassy & Consulates in India. Available at: https://in.usembassy.gov/statement-on-indo-pacific-economic-framework-for-prosperity/ [Accessed 27 May 2022].