US chases unrealistic Indo-Pacific game plan
Washington’s plan for a regional economic alliance against China will be a non-starter
It has been widely reported in recent weeks that the United States is preparing to launch what has been described as “the Indo-Pacific Economic Framework”, an initiative that will purportedly represent Washington’s “return” to an economic presence in the region.
Of course, what the IPEF actually is has not been defined, although it seems obvious that in being touted as being about “rules”, “standards” and “supply chains”, it is designed to be an anti-China coalition of sorts which will be marketed to wealthy US allies in the region — nations such as Japan, Australia and the Republic of Korea.
For many reasons the IPEF is bound to be a non-starter before it even gets off the ground. The US is attempting to dictate the economic rules to a region in which it is not in fact geographically part of, and is asking countries to then take a contrary position to the largest state and economy of that specific region, which makes no sense at all. As an article noted in The Diplomat: “Regional governments see the IPEF as a proposal with many US requests, few US offers, and many credible alternatives”.
A longstanding aspect of the US strategy in Asia is the belief that the US should dominate its economy via the means of standards and rule setting, leading to a longstanding goal to formulate a bloc designed to isolate China in some way. The initial manifestation of this was when former president Barack Obama created the Trans-Pacific Partnership during his “pivot to Asia”.
However, the growing protectionist consensus in US politics and the rise of Donald Trump saw the US ultimately withdraw from the agreement and exert opposition to free trade in the name of “America First”.
With the Joe Biden administration continuing to embrace this consensus, the IPEF is the bizarre proposal of the US that does not want to integrate with the region in trade terms, but still nonetheless asserts the belief that it should get to shape its standards and rules, in other words demanding that countries “choose” but then offering nothing.
This is illogical. How can countries shape their economic preferences to suit a country on the other side of the ocean and be expected to lock out their largest import market, export market, trading partner and neighbor? How can any economic discussion regarding the future of the Asia-Pacific economy feasibly go forth without the participation of the largest single stakeholder?
Take the ROK for example. Although much has been made of the nation’s incoming leader Yoon Suk-yeol being more pro-US than the outgoing president, Moon Jae-in, does a silly slogan change the country’s geographic and economic realities? Who is the ROK’s single largest import and export partner?
While the US-ROK alliance may be deemed important, the country is ultimately part of a region that continues to economically integrate itself, and regions should set their own trade rules and standards according to their own economic interests and realities, and not that of a third-party who has no skin in the game. The US is neither a party to the Comprehensive and Progressive Trans-Pacific Partnership or the Regional Comprehensive Economic Partnership, and lacks the domestic political capital to join either.
Given this, the IPEF is likely to be little more than mere words which aims to unrealistically compensate for the US’ strategic failure in imposing a protectionist and self-interested trade policy that construes global commerce as a zero-sum geopolitical game of “win” or “lose” in the pursuit of hegemony.
The US’ obsession with containing China has repeatedly been about forcing countries to take sides and to dismiss their legitimate interests in having a balanced, positive and stable relationship with China. Washington does not understand that due to geographic proximity, economic integration with
China is a reality of the surrounding region and there is nothing it can do to change this.
In the meantime, China itself will continue to expand its domestic market access for regional companies, will continue to build infrastructure more deeply integrating the region (such as the expansion of the ChinaLaos railway), and will continue in its negotiations to join the CPTPP. How can a country thousands of miles away somehow expect it is the one that should have the biggest say?