SNA (Tokyo) — US President Joe Biden celebrated an economic agreement last week among fourteen Asia-Pacific countries, including Japan, which implicitly aims to counter China’s regional economic influence. This deal, signed at a summit of regional economies in San Francisco, is a notable component of the Indo-Pacific Economic Framework for Prosperity (IPEF), which allegedly focuses on creating a more robust, fair, and resilient global economy.
A related joint statement issued by the United States and Japan emphasized their collaborative efforts aimed at “further reducing vulnerabilities and countering malign practices that exploit and reinforce those vulnerabilities.” This reference to “malign practices” is universally understood to be a swipe at the trade practices of the People’s Republic of China, without openly naming it.
At the core of the most recent agreements of the IPEF are three issues: the IPEF Supply Chain Agreement focuses on promoting diversification and resiliency, as well as establishing emergency communication channels; the Clean Economy Agreement seeks to capitalize on economic opportunities arising from transitioning to cleaner economies, driving investment and collaboration with the private sector; and the Fair Economy Agreement endeavors to combat corruption, enhance tax transparency, and improve tax administration to foster an “investment-friendly” climate.
As widely predicted, however, Washington’s effort to use the IPEF to challenge China is still crippled by the fact that the US public remains opposed to multilateral trade agreements. The manner in which the US political and economic elite utilized the North American Free Trade Agreement (NAFTA) and other international pacts to transfer wealth from the US middle classes to the wealthy–and to undermine labor rights–has not been forgotten.
In this context, Democratic Party leaders, including Senators Sherrod Brown and Chuck Schumer, blocked progress on the trade component, viewing it as a potential liability in the 2024 elections. The Biden White House, responding to such pressure, directed its negotiators to slow down discussions, leaving the fate of the IPEF’s trade section in limbo.
Thousands of people marched last week in San Francisco, protesting the Asia-Pacific Economic Cooperation (APEC) summit over a variety of issues, including some holding banners with messages such as “Junk IPEF!”
The IPEF is a coalition comprising Australia, Brunei, Fiji, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand, and Vietnam, collectively representing 40% of the world’s economy. It was created by the Biden administration to become a major trade framework in Asia which would exclude China and thus to boost the weakening US strategic role in the region.
This article was originally published on November 20, 2023, in the “Japan and the World” newsletter. Become a Shingetsu News supporter on Patreon and receive the newsletter by email each Monday morning.
