US Prepares New Indo-Pacific Economic Strategy to Counter China

[Image source=EPA Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] The United States is preparing a comprehensive economic strategy targeting the Asia-Pacific region. This aims to fill the gap in the grand Asia strategy created by the 2017 withdrawal from the Trans-Pacific Partnership (TPP) and to counter China.

The Wall Street Journal (WSJ) reported on the 6th (local time) that "the United States is promoting close cooperation with allied countries on agendas such as digital trade, supply chains, and eco-friendly technologies through a new Indo-Pacific economic framework." Although specific plans related to the new economic framework have not yet been revealed, they are expected to be disclosed within weeks.

WSJ observed, "The United States is not seeking to rejoin the TPP," and "the Biden administration will not offer tariff eliminations or other traditional market-opening measures within the new economic framework."

The issue is that without so-called market access measures such as tariff eliminations, it will be difficult to build stronger relationships with developing countries in Southeast Asia. For this reason, there is concern that it may remain just another club with wealthy countries like Japan, Australia, and New Zealand, which already operate on similar values and standards.

The United States views this framework as an important step beyond security ties in countering China. The Biden administration launched the security alliance AUKUS with Australia and the United Kingdom last year and formed the quadrilateral cooperation 'Quad' with India, Japan, and Australia, but since withdrawing from the TPP in 2017, it has lacked a broad economic strategy.

Meanwhile, China has been actively strengthening its economic diplomacy in the region. Recently, it has been exploring participation in the Digital Economy Partnership Agreement, an alliance of New Zealand, Singapore, and Chile, which is regarded as a model for future digital trade agreements alongside the TPP. China is also enhancing its role in the Regional Comprehensive Economic Partnership, a 15-country trade agreement launched last month.

These moves by China are causing concern among not only U.S. companies but also its allies. There is a fear that China could seize the initiative in setting trade and economic standards by exploiting the absence of the United States in the region. Laura Rosenberger, senior director for China at the White House National Security Council (NSC), emphasized, "U.S. leadership in setting the rules of the road is crucial to ensure that China does not impose long-term disadvantages on American workers and businesses."

This content was produced with the assistance of AI translation services.