Biden to Begin New Asia-Pacific Economic Bloc With a Dozen Allies

SEOUL — President Biden has enlisted a dozen Asia-Pacific countries to join a new loosely defined economic bloc aimed at countering China’s dominance and reaffirming American influence in the region, five years after its predecessor pulled the United States out of a sweeping trade deal it had negotiated itself.

The alliance will bring the United States together with regional powers such as Japan, South Korea and India to establish new trade rules in the fastest-growing part of the world and provide an alternative to Beijing’s leadership. But wary of liberal opposition at home, Mr Biden’s new partnership will avoid the market access provisions of traditional trade agreements, raising questions about how meaningful it will be.

Biden will formally inaugurate what he has termed the Indo-Pacific Economic Framework for Prosperity in Tokyo on Monday, where he will be joined in person or virtually by several leaders of the new network. It represents not only the centerpiece of his first presidential journey to Asia, but of his broader strategy in the region at a time when China is increasingly filling the void left when President Donald J. Trump pulled the United States out of the Trans-Pacific. withdrew Partnership in 2017.

“In any case, it is the most important international economic engagement the United States has ever had in this region,” Commerce Secretary Gina M. Raimondo, who will lead part of the negotiations kicked off by the agreement, told reporters on Sunday. . “And its launch tomorrow here in Tokyo marks a major turning point in restoring US economic leadership in the region and presenting Indo-Pacific countries with an alternative to China’s approach to these critical issues.”

In addition to the United States, India, Japan and South Korea, the 13 members of the framework will include Australia, Brunei, Indonesia, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam. Together, the participating countries represent about 40 percent of the global economy, and any specific agreements that emerge from the grouping can go a long way toward setting standards, even beyond its membership.

Amid uncertainty and skepticism in the region about what the new framework would actually mean, US officials have struggled in recent weeks to line up enough major countries in hopes of making a big impression with a splashing kick-off. Privately, they said all countries they had seriously targeted agreed to join, but some analysts questioned whether any guarantees or compromises offered to entice participation would reduce the scope of the new bloc.

The new Biden initiative comes less than five months after the China-led Regional Comprehensive Economic Partnership officially went into effect, connecting 15 Asia-Pacific economies in the world’s largest trading bloc. Most of the countries Biden has signed to his framework already belong to the bloc with China.

For the United States, the new framework effectively replaces the expanded Trans-Pacific Partnership as the primary means of shaping the flow of goods and services in the region. President Barack Obama, with Biden as his vice president, negotiated the TPP but had Mr Trump leave it on his first full weekday in office, leaving the bloc without its largest member.

But instead of simply rejoining the partnership as Japan, Singapore and other countries wanted him to do, Mr Biden essentially left it too, in deference to the opposition within his own party. To appease its liberal base, unlike TPP and other traditional free trade agreements, the new framework will not lower tariffs.

Business leaders say the China-led bloc has now done more to define trade in the region, even if it asks little of its members and focuses mainly on cutting bureaucracy. In contrast, the US vision for the region is ambitious, focused on raising labor and environmental standards. But without providing more access to their market, analysts say, the United States doesn’t have many roots to encourage those changes.

“It will be difficult to convince Asian governments to change rules in ways that could disrupt their political economies without the promise of better access to the US market,” said Aaron Connelly, a research fellow at the International Institute for Strategic Studies. in Singapore.

The framework will focus on four main goals: harmonizing efforts to secure supply chains, expanding clean energy, fighting corruption and paving the way for more digital commerce. With the kick-off on Monday, negotiations in each of these areas will soon take place, led by Ms Raimondo or Katherine Tai, the United States Trade Representative.

Each of the 13 participating countries will be able to choose which of the four areas they want to make deals in without having to commit to all of them. The parameters for the negotiations should be set in late June or early July, and the government hopes to finalize any agreements within 12 to 18 months and then submit them to each government for ratification.

As officials prepared for the new venture, it was clear that TPP’s scars run deep within the Biden administration. Ms. Tai bluntly acknowledged Sunday that “the biggest problem” with TPP was that even before Mr Trump was elected, “we didn’t have the support at home to get it through Congress.” “There was a very, very strong lesson there, that TPP, as it was envisioned, was ultimately something that was quite fragile that the United States could not deliver, and that informs us a lot,” she said.

She said labor and environmental groups would have “primary seats at the table” under the new framework, but she doubted any resulting agreements would be submitted to Congress for approval. “Let’s see where these negotiations take us,” she said.

But other government officials, speaking on condition of anonymity to discuss internal deliberations, said separately that without tariffs on the table, it most likely wouldn’t be necessary to go to Congress.

The types of agreements currently under consideration, some binding and others not, can be achieved through executive agreements, they said. Nevertheless, one of the officials added that the administration would consult with Congress as if approval were needed in hopes of restoring confidence after the TPP experience and establishing sustained bipartisan support for any deals.

Membership in the new framework overlaps with TPP membership, but not exactly. Seven countries will belong to both, but several members of TPP have not joined the framework. For two of them, Canada and Mexico, it might be less necessary as they already have their own North American Free Trade Agreement with the United States, recently updated by Mr. Trump.

Ms Raimondo said the new framework goes beyond a “same old, same old” FTA, but partners in Asia still want the same old trade agreement. Countries like Singapore have tried to convince the United States to use the framework as a springboard to rejoin the TPP, a non-starter for the Biden team.

Even the more limited Biden cadres require deft management of Democratic constituencies. Workers in the United States are already skeptical of new broad commitments, including digital capabilities that could lead to increased outsourcing in areas such as medicine and other service industries.

Mr Biden in Tokyo ahead of the announcement on Monday will be joined by Prime Minister Fumio Kishida of Japan, Prime Minister Narendra Modi of India and Anthony Albanese, who was just elected Prime Minister of Australia on Saturday. Several other leaders will participate via video and a few will have ministers representing them.

The kick-off comes during a busy two days for Mr Biden, who will meet each of these three leaders individually, in addition to a summit meeting of all four representing the Quad, a security-focused bloc formed years ago amid growing concerns over China’s military footprint in Asia and parts of the Indian Ocean.

However, during his trip to South Korea and Japan, the economic issues have clearly been at the center of Biden’s mind. With prices rising, stock markets falling and fears of a recession spreading domestically, the president is eager to show his focus on stabilizing the economy, especially with the midterm elections in five months.

Before flying to Tokyo on Sunday, Mr. Biden joined Euisun Chung, executive chairman of Hyundai Motor Group, to celebrate the company’s plan to build a new $5 electric vehicle and battery plant. 5 billion in Savannah, Georgia. Biden said the factory will result in 8,000 jobs, continuing the government’s strategy of pointing to job growth as Republican lawmakers escalate attacks over high inflation.

“These investments are part of a trend by my administration,” Mr Biden said, adding that it would help the White House meet its clean energy commitments. “Production jobs are coming back to America.”

Such announcements often have a political component. Mr Biden made the investment as a result of the work of his administration and Democratic Senators from Georgia Raphael Warnock and Jon Ossoff.

But he wasn’t the only one eager to claim credit. Just two days earlier, Mr. Chung in Georgia to celebrate the investment as he stood next to Governor Brian Kemp, a Republican running for the primaries of a pro-Trump challenger.

Peter Baker reported from Seoul, and Zolan Kanno-Youngs from Tokyo. Ana Swanson contributed to reporting from Washington.

SOURCE – www.nytimes.com

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