By Tom Fowdy
The United States is preparing to imminently launch a program for Asian countries which it calls the “Indo-Pacific Economic Framework”. According to the White House, this framework will seek to “set the rules of economic engagement” in the region, particularly concerning investment, technology and supply chains. It comes amidst pressure upon the United States to up its economic presence in Asia, having excluded itself from the two major trading blocs of the region, the RCEP and the CPTPP due to its protectionist policies on commerce.
However, there is no actual substance on what the “Indo-Pacific Economic Framework” actually represents in real terms, other than being an actual slogan which facilitates the bizarre rendering of a country which is not based in Asia or physically present in the regional economy, attempting to dictate the “rules” of how the game ought to be played, all whilst attempting to act as if the largest economy and centre of trade in that region doesn’t matter. At best, the Indo-Pacific economic framework is a slogan, and one which in substance offers nothing at all.
China is the regional nexus and hub of trade in the Asia-Pacific region. This is not a product of politics; it is a product of geography. As the largest and most populated country, China naturally possesses the largest import and export market in Asia, making China the biggest bilateral trading partner of every country around it include those aligned with the United States. Such heavily overlapping forms of trade subsequently create legal pressures for standards and regulations to be harmonized between countries, which drives the process of what is known as “regional integration”- that is when countries pool and coordinate aspects of governance together on matters of mutual interest.
This process of regional integration is what has driven the RCEP free trade agreement, as well as China’s bilateral free trade agreements with most countries in the region. As of present, China is also negotiating entry to the CPTPP free trade agreement, as well as a digital trade agreement with the region. Other countries in the region see obtaining such agreements with China as critical to securing their economic and regulatory interests. Meanwhile, the United States is currently not present in any major trading blocs with the Asia-Pacific region, particularly because its policy is focused on “America First” principles which espouses opposition to free trade on the premise that such erodes American manufacturing competitiveness and jobs.