The Philippines was among 12 countries to sign up for a new trade pact initiated by the United States that is widely seen as a counterbalance to China’s economic and political dominance in the Asia-Pacific region.
The Indo-Pacific Economic Framework (IPEF) launched by US President Joe Biden on May 23, includes Australia, Japan, South Korea, India and New Zealand and seven Asean states—Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Together, they represent 40 percent of the world’s gross domestic product.
Although details of the trade pact have been sparse, its stated goal is to enhance economic security and supply chain resiliency. The group seeks to set the economic rules on the digital economy, supply chains, clean energy, infrastructure and taxation.
Significantly, early reports focus on what IPEF is not.
It is not a free trade agreement and is not intended to lower tariffs. It is also not a security pact like the Quad alliance that groups the United States with Australia, India and Japan.
Instead, IPEF proposes to focus on four pillars: a connected economy, a resilient economy, a clean economy and a fair economy.
Still, this did not stop Beijing from criticizing the US initiative.
Chinese Foreign Minister Wang Yi said “the so-called Indo-Pacific Strategy is bound to fail.”
IPEf should promote openness and cooperation instead of creating geopolitical confrontation, Wang said. He also accused the US of “politicizing, weaponizing and ideologizing economic issues and using economic means to coerce regional countries to choose sides between China and the United States.”
There is a point to Beijing’s criticism—an economic initiative that leaves out the world’s second biggest economy and the dominant player in the region—does seem political by its exclusion.
On the other hand, Beijing should take a cue from the fact that so many countries, including seven from the Association of Southeast Asian Nations (Asean), so quickly signed up for a pact that is so far short of details.
Chinese leaders may want to consider how uncomfortable countries in the region are with their claims of friendship, cooperation and amity on one hand, while by word and by deed, in their bellicose and unjustified territorial claims on and actions in the South China Sea, they exhibit all the hallmarks of a military and economic superpower, ready to bully its neighbors into acquiescence.
In such an environment, the counter-balancing influence of the United States—if the Americans can shake off their own domestic instability and put meat on the bones of the nascent IPEF—is a most welcome development.