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Biden to begin new Asia-Pacific economic bloc with a dozen allies

During Monday's Indo-Pacific Economic Framework launch event, US President Joe Biden sat alongside Japanese Prime Minister Fumio Kishida and Indian Prime Minister Narendra Modi to discuss a new regional alliance.Evan Vucci/Associated Press

TOKYO — President Biden has enlisted a dozen Asia-Pacific nations to join a new loosely defined economic bloc meant to counter China’s dominance and reassert US influence in the region five years after his predecessor withdrew the United States from a sweeping trade accord that it had negotiated itself.

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

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“We’re writing the new rules for the 21st-century economy,” Biden said Monday in Tokyo during the launch for what he has termed the Indo-Pacific Economic Framework. “We’re going to help all of our country’s economies grow faster and fairer.”

The president sat alongside Prime Minister Narendra Modi of India and Prime Minister Fumio Kishida of Japan for the rollout of the initiative, while other leaders joined the event by videoconference. The new alliance represents the centerpiece not only of Biden’s first trip as president to Asia but also of his broader strategy in the region at a time when China has increasingly filled the void left when then-President Donald Trump pulled the United States out of the Trans-Pacific Partnership in 2017.

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 nations represent about 40 percent of the world economy and any specific agreements that emerge from the grouping could go a long way toward setting standards even beyond its membership.

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Amid uncertainty and skepticism in the region about what the new framework would actually mean, US officials scrambled in recent weeks to line up enough major countries to commit in hopes of making a big impression with a splashy kickoff. Privately, they said all of the nations they had been seriously targeting agreed to join, but some analysts wondered whether assurances or trade-offs proffered to entice participation would diminish 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 force, linking 15 Asia-Pacific economies in the world’s largest trade bloc. Most of the countries that Biden signed up for his framework already belong to the bloc with China.

For the United States, the new framework effectively replaces the more expansive Trans-Pacific Partnership as the main vehicle to shape the flow of goods and services in the region. President Barack Obama, with Biden as his vice president, negotiated the TPP, only to have Trump abandon it on his first full weekday in office, leaving the bloc to proceed without its largest member.

But rather than simply rejoin the partnership, as Japan, Singapore, and other countries wanted him to do, Biden essentially abandoned it, too, in deference to opposition within his own party. To assuage his liberal base, the new framework, unlike TPP and other traditional free-trade pacts, will not reduce tariffs.

Business executives say the China-led bloc has now done more to define trade in the region, even though it asks little of its members and focuses mainly on limiting red tape. The US vision for the region, in contrast, is ambitious, aiming to raise labor and environmental standards. But without offering more access to its market, analysts say, the United States does not have a lot of carrots to encourage those changes.

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“It is going to be difficult to convince Asian governments to change rules in ways that may be disruptive to their political economies without the promise of increased access to the American market,” said Aaron Connelly, a research fellow at the International Institute for Strategic Studies in Singapore.

While many of the leaders heaped praise on the US-led initiative Monday, some at the rollout made clear they expect others to join the bloc soon. Beijing has recently criticized the framework for benefiting only a limited group of nations.

“Inclusive economic cooperations will have [a] positive impact in the long run,” said Muhammad Lufti, Indonesia’s trade minister. “We do not wish to see IPEF merely be an instrument to contain other countries.”

The framework will focus on four main goals: harmonizing efforts to secure supply chains, expanding clean energy, fighting corruption, and paving the way for greater digital trade. With Monday’s kickoff, negotiations in each of these areas will soon ensue, led by Commerce Secretary Gina M. Raimondo or Katherine Tai, the US trade representative.

Tai said labor and environmental groups would “have premier seats at the table” in the new framework but demurred on whether agreements emerging from it would be submitted to Congress for approval.

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“Let’s see where these negotiations take us,” she said.