It is expected that in May 2022, President Biden will formally announce a new economic cooperation framework with Indo-Pacific countries named Indo-Pacific Economic Framework (IPEF). Previously, President Biden submitted the IPEF proposal during the East Asia Summit in 2017 as a strategy to enhance the cooperation of economic and international trade with Indo-Pacific nations. Despite not being formally announced and itemized, according to the United States statement there are four main pillars that become crucial in IPEF, namely fair and resilient trade, resilient supply chain, infrastructure, decarbonization and renewable energy, and taxation and anti-corruption. This policy, however, also depicts the shifting of the US cooperation policy towards the Indo-Pacific countries which previously have been dominated by security and defense cooperation.
According to the research report by Centre for Strategic and International Studies (CSIS), the inclusivity of cooperation matters for the countries particularly in gathering the developed and developing nations that will support all countries in the Indo-Pacific. Hence, this cooperation will also push to include countries such as Australia, Japan, South Korea, and also all of 10 ASEAN member states to join IPEF. Indonesia Foreign Minister, Retno Marsudi also hopes that IPEF will also support the existing cooperation framework such as ASEAN Outlook on Indo-Pacific (AOIP).
Beside strengthening conventional trade and economic cooperation, IPEF cooperation will also acknowledge regional digital economy advancement. This will also give opportunities towards digital economy advancement which has massive potential. Digital economy advancement within ASEAN countries such as Indonesia, Vietnam, Malaysia, Singapore, and Thailand can be a leeway
Contender for China in the Indo-Pacific
Most of the US policies in recent years seem inalienable from the strategic balancing towards China in the Indo-Pacific, including IPEF cooperation. In recent years, China has been gradually dominating the economic aspect in the Indo-Pacific by actively forging regional cooperation such as Regional Cooperation Economic Partnership (RCEP). This is arguably apprehensive for the US in the context of the Indo-Pacific. Furthermore, integration and dependence from some of the Indo-Pacific countries towards China is also worrying for the US, geo-economically and strategically.
Other countries such as South Korea, Japan, Australia have been not only gradually increasing their dependence on China economically through bilateral trade but also joining the RCEP mechanism which to many analyzed is perceived as China’s economic statecraft in the region. Therefore, the US propels Japan, South Korea, and Australia to join the IPEF in order to balance China's influence towards these countries. According to South China Morning Post, IPEF is also utilized as an alternative to fill the void left by the US since withdrawing from TPP uner President Trump administration.
The Chinese government argues that the initiation of IPEF is an effort to alienate China from its regional partners in the Indo-Pacific. The Chinese Foreign Minister said that IPEF is a “Cold War mentality” strategy that still exists in the US foreign policy strategies.
More than a mere “jargon”
According to the South China Morning Post, the governments of Indo-Pacific nations hope that the IPEF cooperation should give economic incentives more than support for domestic trade only. Instead of merely a “jargon” that depicts the US revival in the region, the US through IPEF should also broaden market access to Indo-Pacific nations. This is indeed in line with the research conducted by CSIS that Indo-Pacific have welcomed the IPEF, but at the same time they are expecting the US to broaden market accession to their domestic products that will also benefit the US by enhancing the trust between Indo-Pacific nations towards the US government. Vietnam Prime Minister, Pham Minh Chinh mentioned that Vietnam is ready to fully support the IPEF but still need more time to reconsider the benefit of joining the initiative.
The clarity of IPEF cooperation that differs from other existing regional cooperation will be politically lucrative for the US in the Indo-Pacific region. The benefits and economic incentives for the Indo-Pacific nations such as market access and trade facilitation will depict that the IPEF cooperation is not merely for the US strategic purpose in the Indo-Pacific but also can be portrayed as the US commitment to assist economic advancement in the region.
