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Biden to start a new Asia-Pacific economic bloc with a dozen allies

SEOUL — President Biden has enlisted a dozen Asia-Pacific countries to join a loosely defined new economic bloc intended to counter China’s dominance and reassert American influence in the region five years after his predecessor withdrew the United States of a vast trade agreement that he had negotiated himself.

The alliance will bring the United States together with regional powers such as Japan, South Korea and India to establish new trade rules in the fastest growing part of the world and provide an alternative to Beijing’s leadership. . But wary of liberal opposition at home, Mr Biden’s new partnership will avoid the market access provisions of traditional trade deals, raising questions about its meaning.

Mr. Biden will officially inaugurate what he has dubbed the Indo-Pacific Economic Framework for Prosperity on Monday in Tokyo, where he will be joined by several leaders of the new network in person or virtually. It represents the centerpiece not only of his first trip as president to Asia, but also of his broader strategy in the region at a time when China has increasingly filled the void left when President Donald J. Trump withdrew the United States from the transpacific region. Partnership in 2017.

“This is by any measure the most significant international economic engagement the United States has ever had in this region,” Commerce Secretary Gina M. Raimondo, who will lead, told reporters on Sunday. some of the negotiations triggered by the agreement. “And its launch tomorrow here in Tokyo marks an important turning point in restoring American economic leadership in the region and presenting Indo-Pacific nations with an alternative to China’s approach to these critical issues.”

In addition to the United States, India, Japan and South Korea, the 13 members of the framework will include Australia, Brunei, Indonesia, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam. Together, the participating nations represent around 40% of the global economy, and any specific agreement that emerges from the grouping could go a long way in setting standards even beyond its members.

Amid uncertainty and skepticism in the region about what the new framework really means, U.S. officials have struggled in recent weeks to line up enough big countries to engage in hopes of making an impression with a brilliant kickoff. Privately, they said all the nations they had seriously targeted had agreed to join, but some analysts have questioned whether any assurances or compromises offered to induce participation would reduce the new bloc’s reach.

The new Biden initiative comes less than five months after the China-led Regional Comprehensive Economic Partnership officially took effect, linking 15 Asia-Pacific economies in the world’s largest trading bloc. Most of the countries Mr. Biden has signed for his cadre are already in the bloc with China.

For the United States, the new framework effectively replaces the broader Trans-Pacific Partnership as the primary vehicle for shaping the flow of goods and services in the region. President Barack Obama, with Mr. Biden as vice president, negotiated the TPP, only for Mr. Trump to abandon it on his first full weekday in office, leaving the bloc to continue without its largest member.

But rather than simply join the partnership, as Japan, Singapore and others wanted, Mr Biden essentially ditched it as well, in deference to the opposition within his own party. To appease its liberal base, the new framework, unlike the TPP and other traditional free trade pacts, will not reduce tariffs.

Business leaders say the China-led bloc has now done more to define trade in the region, even as it asks little of its members and focuses mainly on limiting bureaucracy. The US vision for the region, by contrast, is ambitious, aiming to raise labor and environmental standards. But without offering more access to its market, analysts say, the United States doesn’t have many carrots to encourage these changes.

“It is going to be difficult to convince Asian governments to change the rules in a way that could disrupt their political economies without the promise of increased access to the American market,” said Aaron Connelly, researcher at the International Institute of strategic studies. in Singapore.

The framework will focus on four main objectives: aligning efforts to secure supply chains, develop clean energy, fight corruption and pave the way for increased digital trade. With Monday kicking off, negotiations in each of these areas will soon ensue, led by Ms. Raimondo or Katherine Tai, the United States Trade Representative.

Each of the 13 participating countries will be allowed to choose in which of the four areas to pursue agreements without having to commit to each of them. The parameters of the negotiations are expected to be set by the end of June or early July, and the administration hopes to conclude any agreement within 12 to 18 months and then submit it to each government for ratification.

As officials prepared for the new venture, it was clear that the scars of the TPP ran deep in the Biden administration. Ms Tai bluntly acknowledged on Sunday that the “biggest problem” with the TPP was that even before Mr Trump was elected, “we didn’t have the support at home to push it through” in Congress. “There was a very, very strong lesson there that the TPP, as it was envisioned, was ultimately something quite fragile that the United States was not able to sustain, and that enlightens a lot of people. our thinking,” she said.

She said labor and environmental groups “would have prominent seats at the table” under the new framework, but questioned whether any resulting agreements would be brought to Congress for approval. “Let’s see where these negotiations take us,” she said.

But other administration officials, speaking on condition of anonymity to discuss internal deliberations, said separately that without tariffs on the table, it likely wouldn’t be necessary to go to Congress.

The types of agreements currently being considered, some binding and some not, could be reached through executive agreements, they said. Still, one of the officials added that the administration would consult with Congress as if approval was needed in hopes of restoring confidence in the wake of the TPP experience and establishing lasting bipartisan support for any deal. possible.

Membership of the new framework overlaps with membership of the TPP, but not precisely. Seven countries will belong to both, but several TPP members have not signed the framework. For two of them, Canada and Mexico, it might be less imperative since they already have their own North American Free Trade Agreement with the United States, recently updated by Mr. Trump.

Ms Raimondo said the new framework goes beyond a “same, same” free trade agreement, but partners in Asia still want an identical trade deal. Countries like Singapore have tried to convince the United States to use the framework as a springboard to join the TPP, a non-runner for the Biden team.

Even Biden’s more limited framework will require skillful management of Democratic precincts. Labor groups in the United States are already skeptical of any new broad commitments, including digital provisions that could lead to more outsourcing in areas like medicine and other service industries.

Joining Mr Biden in Tokyo for Monday’s announcement will be Prime Minister Fumio Kishida of Japan, Prime Minister Narendra Modi of India and Anthony Albanese, who was just elected Prime Minister of Australia on Saturday. Several other leaders will join via video and a few will be represented by ministers.

The kick-off will take place during two busy days for Mr. Biden, who will meet separately with each of these three leaders in addition to a summit bringing together the four representatives of the Quad, a security-focused bloc formed years ago by growing concern over the China’s military footprint in Asia and parts of the Indian Ocean.

Economic issues, however, were clearly at the center of Mr. Biden’s concerns throughout his trip to South Korea and Japan. With prices rising, stock markets falling and fears of a recession spreading at home, the president is eager to demonstrate his focus on stabilizing the economy, especially five months before the election mid-term.

Before flying to Tokyo on Sunday, Mr Biden joined Euisun Chung, executive chairman of Hyundai Motor Group, to celebrate the company’s plan to build a new $5.5 billion electric vehicle and battery manufacturing plant. in Savannah, Ga. Mr. Biden said the plant would create 8,000 jobs, continuing the administration’s strategy of pointing to job growth as Republican lawmakers step up their attacks against high inflation.

“These investments are part of a trend in my administration,” Biden said, adding that it would help the White House meet its clean energy commitments. “Manufacturing jobs are coming back to America.”

Such announcements often have a political component. Mr. Biden framed the investment following the work of his administration and Democratic Georgia Senators Raphael Warnock and Jon Ossoff.

But he wasn’t the only one wanting to claim credit. Just two days earlier, Mr. Chung was in Georgia to celebrate the investment while standing next to Gov. Brian Kemp, a Republican facing a primary contest from a pro-Trump challenger.

Peter Baker reported from Seoul and Zolan Kanno-Youngs from Tokyo. Ana Swanson contributed reporting from Washington.


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