Talk to officials in Asian capitals and a theme emerges. America, they say, is happy to engage with their countries on matters of security and geopolitics, but seems uninterested in talking about trade. Such complaints are especially common in East and South-East Asia, where governments worry that China will use its economic power in the region to undermine their sovereignty. They are keen for America to deepen economic ties as a way of reducing their reliance on China. But ever since Donald Trump, the previous president, pulled America out of the Trans-Pacific Partnership, a big trade agreement signed by his predecessor, it has been clear that America will do no such thing.
So the Indo-Pacific Economic Framework for Prosperity (ipef), unveiled by President Joe Biden in Tokyo on May 23rd, ought to have been warmly welcomed. In addition to America, a dozen countries, including economic heavyweights like Australia, India and Japan, were signatories at the launch (Fiji joined a few days later). These countries, Mr Biden said, “are signing up to work toward an economic vision that will deliver for all peoples”.
Yet barely did the wheels of Air Force One leave the ground than the grumbling started once more. The chief complaint is that ipef, which American officials call an “initiative” or an “arrangement” rather than a trade deal (which it is not), does not give signatories any greater access to the American market. Instead, the idea is to promote four pillars: boosting trade, especially of the digital kind; making supply chains more resilient; tackling climate change through clean energy; and fighting corruption in business. What all of that means in practice remains to be hammered out. A former senior official from Asia describes it as “a hamburger without the beef”.
“In terms of investment and trade, there is not much substance yet,” Lee Hsien Loong, Singapore’s prime minister, told reporters after a summit of Asian leaders with Mr Biden in Washington earlier in May, where the visitors are said to have been encouraged to join. Seven out of ten members of the Association of South-East Asian Nations (asean), a regional grouping, did indeed show up for the launch, even though just two—Singapore and Thailand—had been expected to do so a week before the event. India, which also shies away from trade deals, is a signatory, too. “But,” Mr Lee continued, “looking at it from another angle, it has its own value. It is, after all, a new start.”
That is the point of the thing. Asian leaders are not insensitive to America’s domestic politics and the constraints they impose upon any president. Even if ipef does not immediately—or eventually—result in a trade deal, there is value in being at the table when regional trading structures and new standards are being discussed. It is also useful to have another venue to speak regularly to America, especially for leaders of smaller countries that lack such opportunities. Nor do they want to send America a signal that they are uninterested in talking. “There is not much to lose and potentially a lot to gain,” says Susannah Patton of the Lowy Institute, a think-tank in Sydney.
The very vagueness of the framework is appealing too—it would be hard to get countries like India and Indonesia to agree to things like loosening data-localisation rules or setting strict limits on state-owned enterprises. With just vague goals, it is easier to show enthusiasm. For India in particular, it also has the benefit of allowing it to deflect criticism that it is overly protectionist.
For America, ipef is a way of signalling that it hears Asian worries, and is trying its best to respond to them. The thinking may be, “We’re going to engage you for many years, to see what we can do”, and hope that perhaps structural forces at home eventually change, says Aaron Connelly of the International Institute for Strategic Studies, a British think-tank. If it helps limit Chinese influence, all the better.
The most optimistic way of looking at the initiative is that by setting high standards on emissions, decarbonisation, the digital economy, tax collection, corruption and so on—all agreed to by several big Asian economies—ipef creates an environment which makes its members more attractive to American investment, says Ms Patton. The likelihood of achieving such a breakthrough is perhaps as slim as that of it resulting in a trade deal agreeable to all its signatories. For now ipef is simply a talking-shop. But as Asian officials recognise, that is better than not talking.
