U.S. and Japanese engagement critical to success of Indo-Pacific framework

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As Japan and the United States recently agreed to coordinate to build a new rules-based economic order in the Indo-Pacific region to counter China’s growing influence, the prosperity and effectiveness of the framework depends largely from its members obtaining tangible benefits, analysts said. .

The US-led Indo-Pacific economic framework is expected to have a significant impact on the fast-growing region as it will re-establish the United States as an economic and geostrategic leader following its withdrawal from the Trans-Pacific Partnership trade agreement under the former President Donald Trump.

Japan’s Minister of Economy, Trade and Industry Yasutoshi Nishimura (front) attends the first day of a two-day ministerial meeting of the US-led Indo-Pacific Economic Framework in Los Angeles September 8, 2022. (Kyodo) == Kyodo

“This could be an effective mechanism or platform to counter China’s growing influence both economically and geopolitically in the region,” said Brian Peck, executive director of the University’s Center for Transnational Law and Business. from Southern California to Los Angeles, to Kyodo News in an interview.

“Japan has already committed to high standards for digital commerce and e-commerce so that it can be a leader and an example of what can be achieved (for members from emerging countries) “, said Peck, adding that Japan could lead alongside the United States. because of its close ties to Washington and advanced technologies.

Beijing is increasing its economic presence in the region as a member of the Regional Comprehensive Economic Partnership Agreement and its influence could grow further if it becomes a member of the Comprehensive and Progressive Trans-Pacific Partnership Agreement, for example.

However, the United States is not a member of the CPTPP or the RCEP, and voices have been heard among members of the Association of Southeast Asian Nations urging Washington to re-engage economically in the Indo region. -peaceful due to concerns about China’s economic coercion.

“The United States has clearly shown its economic re-engagement in the Indo-Pacific region. This is extremely important,” Japanese Minister of Economy, Trade and Industry Yasutoshi Nishimura said during a meeting. press conference after attending IPEF’s first face-to-face ministerial meeting.

Although Japan, the United States and other like-minded countries are actively promoting a free and open Indo-Pacific strategy, critics have said their efforts lack an economic aspect.

Nishimura stressed at the press conference that IPEF will push forward economic measures as part of the strategy.

Political and economic experts said it was crucial for the framework to have a diverse membership to become an effective counterbalance to China’s growing assertiveness.

“So the important thing now is to keep them on board and to make sure that no one will be left behind,” said a Japanese foreign ministry official, adding that it was not an easy task as each country has its own situation.

Japan can bridge the gaps between the United States and developing countries, sometimes pushing one side to compromise and giving the other tips and advice, according to the official.

During the two-day talks in Los Angeles last week, ministers from 14 member countries, including developed and developing countries, agreed to start formal negotiations aimed at establishing a new rules-based economic order. after discussing a range of issues, including the benefits available outside of trade liberalisation.

“If there’s no tangible benefit, then I don’t think the members will stay consistent,” said Stephen Nagy, senior associate professor at Tokyo International Christian University.

Since the IPEF is not a conventional trade agreement, there was initial doubt that ASEAN countries would participate as it seemed there was little merit for them to join while access to the market was irrelevant.

However, seven of the 10 ASEAN members have joined the US-led framework since its launch in May during a trip to Japan by US President Joe Biden, and now the launch is considered a success, Koichi Ishikawa , a researcher at the Institute of Asian Studies at Asia University in Japan, believes.

IPEF’s current 14 members — Australia, Brunei, Fiji, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Thailand, United States and Vietnam — represent approximately 40% of the World GDP. product and 28% of world trade in goods and services.

“Going forward, Japan and the United States should focus on matching their interests with the interests of member states and potential IPEF members,” Nagy said.

“Here, inclusive development and climate change mitigation are areas where Tokyo and Washington could gain regional buy-in from Pacific island states, Bangladesh and other countries and regions facing development and environmental challenges. “, did he declare.

The area of ​​clean energy, decarbonization and infrastructure is one of the four main policy pillars of IPEF. The other three are – fair trade, including the digital economy, supply chain resilience, as well as taxation and anti-corruption.

Nishimura told reporters that Japan can help other members, especially those in Southeast Asia and Pacific island countries, with new energy technologies such as those using hydrogen and ammonia. , as well as in the emerging field of carbon capture, utilization and storage.

Meanwhile, in response to skepticism about the initiative’s value to participating countries, the US announced the launch of a digital skills training program targeting women and girls, joined by 14 US companies. , including tech giants Apple Inc. and Google LLC.

Fiji’s Minister of Commerce, Faiyaz Koya, and Malaysia’s Minister of International Trade and Industry, Mohamed Azmin Ali, both hailed U.S. public-private support for sustainable and inclusive economic growth in the region during a event in Los Angeles.

“The contribution of this initiative has the potential to actually be of immeasurable value. And the impact will be felt today and in the decades to come,” Koya said.

While the U.S. skills development initiative is seen as a potential concrete benefit under the IPEF, Nagy also said U.S. policy should remain firm going forward.

The United States had led the TPP trade deal negotiations under former President Barack Obama, but his successor, Trump, pulled the world’s largest economy out of it, leading to the creation of the CPTPP.

With the possibility of China trying to break unity by offering incentives to members in need, offering more aid with fewer strings attached, for example, it would be really hard for IPEF to maintain momentum without the determined leadership of the United States, regardless of whether it is a Democratic administration or a Republican administration, he said.


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