Biden Focuses on Enhancing Economic Ties with Asia, Deliberately Avoids Signing Trade Agreements

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In a recent summit held in San Francisco, President Joe Biden is actively fostering economic relationships with Asian nations. However, he is deliberately refraining from entering into any trade agreements.

This decision not to pursue trade agreements sheds light on the current political climate in the U.S., the dynamic nature of the global economy, and the specific goals of the Biden administration. U.S. representatives are actively working to finalize aspects of the Indo-Pacific Economic Framework (IPEF) with 13 other countries. The term “framework” is crucial, as it enables President Biden to circumvent the need for Congressional approval in these agreements.

Robert Holleyman, a former deputy U.S. trade representative, explained, “The administration opted for a framework to enable executive agreement implementation.”

A significant number of American voters harbor negative views towards trade agreements, blaming them for industrial job losses. This sentiment was a major factor in the 2016 presidential election and continues to influence the approach to the 2024 election. The IPEF aims to navigate domestic political challenges while tackling issues like supply chain management and climate change, areas traditionally not covered in trade deals. A detailed overview of this framework and its ongoing progress is being presented at the Asia-Pacific Economic Cooperation leaders’ meeting.

President Biden first introduced the IPEF during his visit to Tokyo in May 2022. It consists of four key areas: supply chains, climate, anti-corruption, and trade. “We are setting the new rules for the 21st-century economy,” Biden remarked during the launch. However, the framework differs from conventional trade deals as it does not focus on expanding market access or establishing penalties for unfair trade practices.

The trade component is managed by U.S. Trade Representative Katherine Tai, while the remaining pillars fall under the purview of Commerce Secretary Gina Raimondo. The U.S. and its partners are anticipated to announce agreements concerning supply chains, climate, and anti-corruption, but the trade aspect remains under discussion, as reported by sources close to the negotiations.

IPEF Member Countries

The IPEF includes 13 countries alongside the U.S., collectively representing 40% of the global GDP. The member states are Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and Vietnam, as per U.S. government data.

Contents of the Agreements

Matthew Goodman, director of the Greenberg Center for Geoeconomic Studies at the Council on Foreign Relations, indicated that the White House has been hinting at the terms of the agreements prior to the leaders’ meeting. Each pillar is negotiated independently.

The trade pillar is expected to address agricultural issues and enhance trade relations. However, significant topics like labor, environmental standards, and digital company regulations are still under negotiation.

Senator Sherrod Brown, a Democrat from Ohio, has raised objections to the trade pillar, particularly due to the lack of worker protections. This has led the Biden administration to halt progress on this aspect of the agreement. Brown, who faces reelection next year in a state with strong industrial roots and leaning Republican, stated, “We should prioritize strong enforcement over secretive trade deal negotiations to ensure a level playing field for American workers.”

The U.S. government has suggested potential agreements on the other three pillars, though these are still in initial stages.

The Unpopularity of Trade Deals

The primary reason for the unpopularity of trade deals among voters is their perceived role in the loss of manufacturing jobs, which has led to the decline of many American towns. The Biden administration concurs with this sentiment.

The 2016 presidential election marked a turning point in the rejection of trade agreements. Both the Republican candidate Donald Trump and the Democratic candidate Hillary Clinton withdrew support from the Trans-Pacific Partnership. President Trump later revised the North American trade agreement and imposed tariffs on a variety of imports, including initiating a trade dispute with China.

While trade deals have traditionally been seen as a means to secure cheaper goods and geopolitical stability, the COVID-19 pandemic revealed the vulnerability of supply chains heavily reliant on China. President Biden has been exploring alternatives to Chinese manufacturing, maintaining the tariffs imposed by Trump on Chinese products.

In a speech in June, Tai critiqued past trade agreements. “These agreements contributed to the very issues we’re now trying to solve,” Tai emphasized, advocating for a trade approach that acknowledges individuals as more than consumers, but as producers, workers, wage earners, and community members essential to a thriving middle class.

Trade agreements often require years of negotiation and even longer to be finalized across different presidential terms. The last new trade deal, signed with South Korea in 2007, only came into effect in 2012. In contrast, the IPEF is advancing rapidly, with agreements being announced in under two years.

Frequently Asked Questions (FAQs) about Indo-Pacific Economic Framework

More about Indo-Pacific Economic Framework

• Indo-Pacific Economic Framework Overview
• IPEF Fact Sheet – White House
• IPEF Analysis – Council on Foreign Relations
• IPEF’s Regional Impact – CSIS
• Indo-Pacific Economic Framework – Wikipedia