Beijing has criticized the US-proposed Indo-Pacific Economic Framework (IPEF), calling it an attempt by Washington to entice Southeast Asian countries to “decouple from China.”
US President Joe Biden has hosted a special two-day summit with leaders of the Association of Southeast Asian Nations (ASEAN), which ends Friday. At the summit, it is expected that the US will share more details about the framework, which is likely to get its official launch later this month when Biden visits South Korea and Japan.
It is not a free trade pact in the form of the Trans-Pacific Partnership, which the Obama administration advocated and negotiated for years as part of its foreign policy, as a ‘pivot’ to Asia, only to see the Trump administration drop it. A repeat of the same agreement was later adopted by other Pacific Rim nations.
But IPEF seeks to foster ties with economic partners in the Indo-Pacific by establishing trade rules and building a supply chain without China.
In the words of President Biden at last year’s East Asia Summit, IPEF involves “trade facilitation, digital economy and technology standards, supply chain resilience, decarbonisation and clean energy, infrastructure, labor standards and other areas of common interest.”
On Thursday, Beijing warned Washington that the Asia-Pacific region “is not a chessboard for geopolitical competition” and that any regional cooperation framework should “follow the principle of respecting the sovereignty of others and non-interference in the internal affairs of others.”
Chinese Foreign Ministry spokesman Zhao Lijian said China rejects the “Cold War mentality” when it comes to regional groupings.
It said the People’s Daily, the mouthpiece of the Chinese Communist Party in a leader that IPEF is designed to “offset the shortcomings of Washington’s previous engagement with Southeast Asia, which focused only on security and ignored the economy.”
“The United States has deep political and strategic goals aimed at forcing countries to disconnect from China,” the newspaper quoted some analysts as saying.
The meeting in Washington is the second special summit between the United States and ASEAN since 2016, when then-President Barack Obama hosted the bloc’s leaders in Sunnylands, California.
ASEAN leaders, minus Myanmar and the Philippines, attended a White House dinner with Biden on Thursday and met with a host of U.S. political and business leaders, but had no bilateral meetings with the U.S. president. Leaders met with Biden and Vice President Kamala Harris on Friday at the State Department.
There are 10 ASEAN member states, but Myanmar’s junta was not invited to the summit, and the Philippines, which held presidential elections last weekend, sent only its foreign minister.
Singapore’s Prime Minister Lee Hsien Loong was the first ASEAN leader to welcome IPEF.
In a speech to the US-ASEAN Business Council and the US Chamber of Commerce on Thursday, Lee said IPEF “must be inclusive and provide tangible benefits to encourage wider participation.”
“We call for greater ASEAN participation in IPEF and we hope that the United States will directly invite and engage ASEAN Member States in this endeavor,” he said.
Currently Understood that only two of the 10 ASEAN countries – Singapore and the Philippines – are expected to be among the first group of counties to join the IPEF negotiations.
“Most ASEAN members have been reluctant to express support for Biden’s IPEF, which in their view is a counterweight to China’s Belt and Road Initiative in the specific and Beijing economic constraints in general,” said Huynh Tam Sang, a speaker at Ho Chi Minh. City University of Social Sciences and Humanities (USSH) in Vietnam.
“Given the economic proximity to China, the ASEAN member states have tried to avoid provoking Beijing, let alone being embedded in the Sino-US competition,” Sang said.
Yet judging by prepared statements and initial feedback from ASEAN leaders on the prospects for ASEAN-US economic cooperation and IPEF, “they not only appreciate the content of the relationship, but are eager to see it grow,” according to Thomas Daniel, a senior fellow at the Malaysian Institute of Strategic and International Studies.
“Unfortunately, Washington is still unable to fully understand or address the desire in Southeast Asia for practical dimensions that will bring an immediate and tangible benefit to local economies and communities,” he said.
On Thursday, Malaysian Prime Minister Ismail Sabri Yaakob called on the United States to adopt a more active trade and investment agenda with the ASEAN countries. He pointed to the Chinese-backed regional economic partnership, which entered into force this year, as an important tool for revitalizing regional business and economic activity through reduced trade barriers.
In an effort to offer concrete benefits at the summit, Biden offered $ 150 million for ASEAN infrastructure, security, pandemic preparedness and other efforts.
More division in the block?
The details of IPEF are still vague, but politicians in Washington have said they are designing a framework to prioritize flexibility and inclusion, with a pick-and-choose arrangement for the participating countries, allowing them to choose the individual areas in which they wish to enter into more specific commitments.
IPEF seeks to promote economic cooperation by establishing trade rules across “four pillars” – trade resilience, infrastructure, decarbonisation and anti-corruption.
An analysis of the Washington-based Center for Strategic and International Studies (CSIS) said while IPEF keeps a promise, “it will have to be well-constructed and managed.”
“Where possible, the framework should seek to promote binding rules and strict commitments that go beyond broad principles and objectives,” CSIS said.
At the same time, “the Biden administration needs to offer tangible benefits to regional partners, especially less developed ones,” according to the analysis.
There are warnings that the proposed framework, if not carefully considered, could even create a wider gap between the countries of the Southeast Asian region.
“Middle and small powers in Southeast Asia are likely to embrace a cautious approach when it comes to the major powers’ proposed initiatives, especially when these multilateral frameworks may undermine ASEAN centrality,” Sang from Vietnam’s USSH said.
Countries such as Singapore, the Philippines and Malaysia may seek to join some “pillars” that could serve their pragmatic interests, but “China may seek to deter small regional states from forging ties with Washington through participation in IPEF.”
Sang said it could pose a particular dilemma for Laos and Cambodia, who may not want to give up but have deep and growing economic ties with China.