Japanese Prime Minister Fumio Kishida, US President Joe Biden and Indian Prime Minister Narendra Modi attend a photo session at the launch of the Indo-Pacific Economic Framework (IPEF) in Tokyo, Japan, on May 23, 2022. Photo: Pool

US President Joe Biden’s five-day visit to top two Asian military allies South Korea and Japan touched on key security issues, including threats posed by North Korea as well as rising tensions in the Taiwan Straits. The US leader also discussed joint sanctions against Russia, which has traditionally been a major energy source for the two Asian economic dynamos.

At the heart of the US President’s maiden trip to the vital region, however, was economics, the key frontier of geopolitical competition with China. After almost a year of intense anticipation, Biden unveiled the much-vaunted the Indo-Pacific Economic Framework (IPEF), which was first formally discussed during US Secretary of State Antony Blinken’s visit to Indonesia last year.

The new economic initiative aims to plug in the strategic gap left by the Trump administration’s nixing of the Trans-Pacific Partnership Agreement (TPP) and, in the words of US Commerce Secretary Gina Raimondo, present Asian nations with “an alternative to China’s approach to these critical issues” such as labor rights, environmental and debt sustainability as well as supply chain resilience.

So far, 13 Indo-Pacific nations, including regional parties to the original TPP negotiations, have expressed support for the new US-led economic initiative, including Australia, Brunei, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam.

During his Asian trip, Biden profusely welcomed support for the new initiative as a step “toward an economic vision that will deliver for all people on Earth.” The US leader made it clear that the initiative has “one simple purpose”, namely to secure “the future of the 21st century economy”, which “is going to be largely written in the Indo-Pacific.”

Critics, however, fear that the new initiative is more sizzle than steak, while potentially facing opposition both at home and among export-oriented regional economies.

The Indo-Pacific Economic Framework launch event. Image: Twitter / Handout

Since the end of World War II, both South Korea and Japan have served as a linchpin of the US-led network of alliances in the region. Both countries are equipped with modern armed forces, while also facing serious security challenges in East Asia.

During his visit to Seoul, Biden met new-inaugurated President Yoon Suk-yeol, a conservative statesman who has tethered his country’s security policy to Washington’s more than any of his predecessor’s in recent memory. The two sides discussed concerns over North Korea while coordinating sanctions on Russia.

In Japan, Biden met Emperor Naruhito and Prime Minister Fumio Kishida to discuss rising maritime tensions in East China Sea and shared concerns over China, including contingency plans in the event of a war over Taiwan.

“The United States remains fully committed to Japanese, Japan’s defense, and we will face the challenges of today and the future together,” Biden told Kishida during their first formal face-to-face. “The purpose of the visit is to increase our cooperation with other nations of the region and deliver concrete benefits to the people of the Indo-Pacific region,” Biden added.

The main thrust of the US president’s visit, however, was economic resilience. In South Korea, Biden visited a Samsung semiconductor facility and also met the top executives of Hyundai, welcoming large-scale investments from and critical technology cooperation with Korean conglomerates.

“Our two nations work together to make the best, most advanced technology in the world,” Biden said during his visit to the Samsung plant. “And this factory is proof of that, and that gives both the Republic of Korea and the United States a competitive edge in the global economy if we can keep our supply chains resilient, reliable and secure,” he added.

In recent months, the Biden administration has pushed for greater supply chain resilience in order to enhance US’ national security as well as quell rising inflation amid massive disruptions to basic commodity as well as semiconductor production worldwide.

Biden has urged the US Congress to grant US$52 billion for semiconductor production at home as well as $45 billion in grants to support overall supply chain resilience and manufacturing at home.

In their joint statement, the US and South Korea called for “[s]ecure, sustainable, and resilient global supply chains are foundational to these efforts. Building upon international cooperation fostered by the US-led Summit on Global Supply Chain Resilience, and by working closely together in the upcoming Ministerial-level summit, the two Presidents agree to continue working together to tackle immediate and long-term challenges in the supply chain ecosystem.”

Samsung is making a big play to dominate the emerging logic chip market. Image: AFP

“Both leaders agree to strengthen the resiliency and diversity of these networks including by cooperating on early warning systems to detect and address potential supply chain disruptions and working together to address sourcing and processing of critical minerals,” the statement said following the Biden-Yoon summit.

Biden launched the IPEF in Japan, which US National Security Adviser Jake Sullivan described as “a big deal” and a “significant milestone” for fostering US leadership in the region. Japanese Prime Minister Fumio Kishida, for his part, welcomed the new initiative as a critical step towards “build[ing] a desirable economic order” for the region

In his joint statement with Biden, the Japanese leader “expressed his support for President Biden’s Indo-Pacific Economic Framework, and the two leaders welcomed the launch of discussions among IPEF partners toward future negotiations.”

“Both leaders reaffirmed the moral and economic imperative of ending the use of forced labor and concurred in working together, recognizing the importance of enhancing predictability and fostering an enabling environment for businesses that respect human rights in their supply chains,” the joint Biden-Kishida statement added.

Aside from Japan and South Korea, the IPEF also received support from Australia as well as a number of key Southeast Asian countries. During his first major press conference, Philippine President-elect Ferdinand Marcos Jr signaled his country’s interest to be “involved” with the US-led initiative, emphasizing how he prefers “[t]rade, not aid” in bilateral relations with Washington.

“We have to open as much of the economy as we can to trade, and that’s where this kind of treaty will come in,” Marcos said.

Ferdinand ‘Bongbong’ Marcos Jr wants “trade not aid.” Photo: AFP Forum via NurPhoto / Artur Widak

Thai Prime Minister Prayut Chan-ocha also welcomed the new initiative as a crucial step towards “enhan[ing] access to sources of finance and technology,” though clarifying that the initiative “is still a work in progress, with detailed consultations planned in the near future.”

During his visit to Washington DC, Vietnamese Prime Minister Pham Minh Chinh similarly signaled his country’s willingness “to work alongside the US to discuss, to further clarify what these pillars entail.”

For his part, Singapore’s Prime Minister Lee Hsien Loong welcomed the IPEF as a reflection of Washington’s “intent to cooperate on economic issues which are relevant” to the region.

“Singapore is planning to join. It is not quite a substitute for the TPP, but it is a forward-looking agenda,” Lee added while emphasizing his preference for China’s eventual inclusion in the deal. Last September, China applied in September to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which replaced the US-led TPP.

The newly-proposed framework falls short of a traditional free trade agreement; instead, it provides a legal and strategic architecture for negotiation over major trade issues concerning digital economy, green energy, infrastructure investments and supply chain resilience.

The Biden administration and like-minded countries aim to not only provide an alternative to China’s economic initiatives, including the Belt and Road Initiative (BRI), but also raise labor and environmental standards in the region. But export-oriented developing countries such as Vietnam, India and Indonesia are worried that new strict standards could hamper their economic momentum.

Another major hurdle for Biden is potential opposition at home, where there are concerns over any further outsourcing of jobs and manufacturing capacity to Asia. US Trade Representative Katherine Tai earlier admitted that the TPP agreement was “ultimately …something that was quite fragile,” since “we did not have the support at home to get it through.”

Americans protest against the TPP at a campaign rally in 2020. Photo: AFP

“There’s a reason that the original TPP was derailed. It would have off-shored more jobs to countries that use child labor and prison labor and pay workers almost nothing. Let me be clear: The IPEF cannot be TPP 2.0,” Senator Elizabeth Warren (D-Massachusetts) warned last month.

The US ambassador to Japan, Rahm Emanuel, has tried to reassure critics abroad and at home that the framework agreement is still in a preliminary phase, and that it provides “an approach that respects [diverse partner] countries where they are,” while also taking domestic protectionist sentiments into consideration.

“We have an interest in saying we are still a player in the Pacific, and China has an interest in saying the US is on its way out,” the US diplomat added, emphasizing how the framework is fundamentally about signaling US resolve to compete with China and reassert US leadership in Asia.

Follow Richard Javad Heydarian on Twitter at @Richeydarian