US President Biden (third from right), who visited Japan on May 23, has a videoconference with the leaders of the Indo-Pacific Economic Framework (IPEF) countries. ⓒREUTERS Washington diplomats talk a lot these days about the Indo-Pacific Economic Framework (IPEF), a multilateral economic cooperation body that US President Joe Biden recently announced. This is because the ‘substantiality’ of the participating countries is unknown compared to the grand name, and the US intention to contain China is very clear. The IPEF, officially launched on May 23, is far from a free trade agreement characterized by the abolition of tariffs and market opening, with 13 countries including Korea, Japan, India, and Australia (Australia) participating under the initiative of the United States. However, it is no longer a security alliance such as AUKUS (USA, Australia, UK) or Quad (USA, Australia, India, Japan) led by the US in the Indo-Pacific region. Nevertheless, there is one clear purpose. This is to curb the growing economic influence of China in the region. The United States has also promoted a similar ‘anti-China’ economic cooperation system in the past. During a visit to Australia in November 2011, President Barack Obama advocated the Trans-Pacific Partnership (TPP), excluding China, as a concrete action plan to shift the focus of US diplomacy to Asia. For this reason, the phrase ‘Pivot to Asia’ in the United States was popular at one time. The United States officially signed the TPP along with 11 other countries, including Japan, Canada and Australia, in February 2016, at the end of the Obama administration. However, when Republican President Donald Trump, who won the presidential election in November of that year and took office in January of the following year, declared ‘America First’ and was concerned about job losses due to the expansion of the US market, withdrew from the TPP. In that respect, the IPEF proposed by Biden can be said to be the revival of the TPP, the ‘unfinished legacy’ left by Obama, and the ‘Asian pivot 2.0’. President Biden declared, “Through IPEF, the United States will create new rules for the economy of the 21st century, helping participating countries achieve faster and more fair economic growth.” The White House released a massive press release just in time for the official launch of the IPEF. In a press release, the White House declared “the United States is an Indo-Pacific economy,” and then listed related statistics. In other words, the Indo-Pacific countries account for 40% of the world’s gross domestic product (GDP), and direct U.S. direct investment in these countries has exceeded $969 billion (as of 2020). It was also noted that more than 3 million jobs were created in the United States through trade with Indo-Pacific countries. In particular, the data presented a rosy blueprint for the IPEF, stating that the Indo-Pacific countries, which account for 60% of the world’s population, “will become the largest contributors to global economic growth over the next 30 years.” However, since the IPEF is not basically a free trade agreement like the TPP, it is pointed out that Biden’s declaration may be a fuss about talking. This is because the Biden administration thoroughly excluded free trade provisions such as tariff elimination or market opening from the IPEF, conscious of Congress and the labor community, where the voices of opposing market openings are growing bipartisan like the previous Trump administration. To the extent that these benefits are missing, the attractiveness of IPEF is bound to be halved. The Wall Street Journal quoted Neil Thomas, a Chinese analyst at the U.S. think tank Eurasia Group, saying, “What the participating countries want from the U.S. through the IPEF is more openness to the U.S. market, but this is something that President Biden cannot accept for domestic political reasons.” pointed out Charles Freeman, vice president of Asia at the American Chamber of Commerce, told Politico, “I don’t know what the developing countries that are participating in the IPEF can get. It is questionable how far they will be able to follow the US-led IPEF without any carrots,” he said. The United States, who cannot be unaware of these weaknesses, is highlighting its strengths, saying that IPEF is suitable for resolving emerging problems such as supply chain disruption and clean energy that existing free trade agreements cannot address. In fact, the U.S. said that the IPEF agenda would be divided into four themes: trade, supply chain resilience, clean energy and decarbonization, and tax evasion and corruption prevention. However, the problem is that in the process of making new rules in these fields, if the US blows excessively, friction is inevitable. For example, in the field of ‘supply chain resilience’, experts point out that friction is inevitable if the US demands from participating countries a clause that strengthens export controls and technology transfer requirements to China. Taiwan is excluded from the dimension of ‘one China’ There is another serious problem. Although China is the second largest economy in the Indo-Pacific region after the United States, the United States excluded China from the IPEF. The New York Times pointed out that the “IPEF is an economic bloc created by the United States to counter China’s dominance in the region and to restore American influence.” The participating countries cannot be unaware of this fact. South Korea recently decided to participate in the IPEF at the Korea-US summit, but there are clear signs that it is struggling because of strong opposition from China. While explaining the background for South Korea’s participation, Foreign Minister Park Jin was wary of the ‘China exclusion theory’, saying, “This is not aimed at excluding or targeting a specific country, for example, China.” But China, who basically views the US IPEF as a threat to pressure China, cannot believe this. As of 2020, the annual trade volume with China exceeded $517 billion, and ASEAN, that is, the members of the Association of Southeast Asian Nations, are also dissatisfied with the US exclusion of China. Indonesia’s Trade Minister Muhammad Lufti said, “Inclusive economic cooperation will have positive long-term effects. We do not want the IPEF to be used as a tool to block other countries.” Dr. Leon Hadar, a Chinese analyst at Wikistrat, a strategic issues consulting firm, said in an article for the Asia Times that “ASEAN member states do not want the Indo-Pacific region to become a new Cold War zone between the United States and China. This is because ASEAN countries, which have close diplomatic and economic ties with the US and China, may be forced to make a choice in the event of a clash between the two countries.” ASEAN member states are closely linked economically with China. In fact, 11 ASEAN countries are official members of the Regional Comprehensive Economic Partnership (RCEP), which was launched in February, led by China. 15 countries, including Korea, Japan, New Zealand, and Australia, are members of this group. In addition, after the US withdrew from the TPP, 11 countries including Japan launched the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP) in December 2018 after about two years of negotiations. state If China joins the CPTPP following the RCEP, it is certain that China’s economic sphere of influence will expand further. The US IPEF effort is bound to take a hit. Many critics point out that the United States’ exclusion of Taiwan from the IPEF in response to China’s backlash is also a failure. With a gross domestic product of $689 billion as of the end of last year, Taiwan has the eighth largest economy in Asia and the eighteenth in the world. In particular, Taiwan is the largest semiconductor producer, accounting for 20% of the world’s semiconductor shipments. Participation was taken for granted for the ‘safe supply chain construction’ pursued by the US, but in the end, the US excluded Taiwan from the dimension of ‘one China’. 52 Republican and Democrat senators sent a letter to President Biden urging Taiwan to participate, but to no avail.
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A return to Asia or a Chinese containment?
