U.S. President Joe Biden on Thursday hailed a new economic agreement among 14 Asia Pacific countries, which is not a formal trade agreement, as a major step forward in countering China’s regional economic dominance. The agreement, signed at the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco, is aimed at addressing key issues such as future semiconductor shortages by improving supply chain resilience.
The joint statement issued by the 14 leaders said the goal of the new pact is to “promote workers’ rights, increase our capacity to prevent and respond to supply chain disruptions, strengthen our collaboration on the transition to clean economies, and combat corruption and improve the efficiency of tax administration.”
Biden acknowledged that negotiators failed to reach consensus on a key pillar of last year’s Indo-Pacific Economic Framework (IPEF). However, he said that “we’ve made substantial progress” and that “in record time we’ve reached consensus on three of the pillars of the IPEF.”
The President also announced a program to work with startup businesses to raise capital. This effort is based on the U.S. Partnership for Global Infrastructure and Investment, which is seen as the U.S. answer to China’s Belt and Road Initiative. Biden emphasized the importance of the U.S. private sector in this effort, saying that “government investment is not enough. We need to mobilize private investment.”
Critics have argued that the new economic agreement lacks market access provisions. Indonesian CEO Anindya Bakrie told VOA on the sidelines of the summit that “for a country like us, we have to have at least market access.” Joshua Kurlantzick, a senior fellow for Southeast Asia at the Council on Foreign Relations, said most Southeast Asian states are “tepid” about the deal.
However, Siobhan Das, executive director of the American Malaysian Chamber of Commerce, took a more positive view, saying that “I actually believe it’s been successful already. You’ve had 14 nations talking to each other for the last 18 months – how can that not be a success?” Zack Cooper, a specialist in U.S. strategy in Asia at the American Enterprise Institute, said that “everyone agrees that the Indo Pacific economic framework is probably the best the Biden administration is going to do for now.”
Overall, the new economic agreement is a positive step forward in countering China’s regional economic dominance. It is a sign of the U.S.’s commitment to the region and its willingness to work with other countries to promote economic growth and development. While the agreement may not be perfect, it is a start and it is hoped that it will lead to further progress in the future.
