The Diplomat
Overview
In IPEF, Pax America Redux?
Associated Press, Evan Vucci
US in Asia

In IPEF, Pax America Redux?

The Indo-Pacific has welcomed a return of U.S. leadership, including in the economic sphere. But the United States itself may still be the ultimate wild card for IPEF’s success.

By Shihoko Goto

There’s a return to 20th century certainty in U.S. foreign policy these days, not least with the return of Russia as a challenger to democracy and stability in the global order. The moral clarity provided by Vladimir Putin unilaterally invading Ukraine has certainly become one of the few issues that unites the U.S. Congress, where bipartisanship is becoming increasingly rare. The Russian invasion of Ukraine has also drawn Washington back to a role that it had played with confidence in the past century, and the benefactors of U.S. leadership since the end of World War II have largely welcomed the return of Washington as a uniter.

Asia is no exception, and the Biden administration’s latest effort to further integrate the United States into the architecture of the Indo-Pacific has largely been welcome. In late May, during his first trip to Asia since taking office, President Joe Biden’s presence was seen in both Tokyo and Seoul as affirmation of U.S. commitment to the Indo-Pacific, and Washington’s visible demonstration that it can indeed engage on multiple fronts, and not simply be mired in dealing with Russia. For if U.S. partners in Asia were relieved by the Biden visit, they are also concerned about the longer-term, systemic threat posed by China. That in turn means growing expectations for Washington to counterbalance the economic as well as security challenges China will be presenting.

The fact that the Biden administration’s economic blueprint, in the form of the Indo-Pacific Economic Framework (IPEF), was supported by 13 countries, including India and Indonesia, has been much ballyhooed by the White House. In announcing Fiji as the latest member country, the Biden administration stated that “IPEF now reflects the full regional diversity of the Indo-Pacific, with members from Northeast and Southeast Asia, South Asia, Oceania, and the Pacific Islands. Across geography, we are united in our commitment to a free, open, and prosperous Indo-Pacific region.”

The diversity represented in membership may be striking, but it is also telling that few policymakers have been vehemently opposed to IPEF in the United States, which remains largely against signing onto new trade deals. Those who do oppose IPEF largely object because they view the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as a better trade deal for the United States. By keeping market access off the table, IPEF is expected to keep jobs within the United States intact, which is critical under the current political climate on both sides of the aisle. Yet just how much IPEF can actually stimulate growth – in the U.S. or in the Indo-Pacific members – remains in question.

After all, the deal is seen as a means to bring countries together to push back against the China threat. It is, in short, a de facto collective economic defense mechanism, which is expected to deter Beijing from leveraging its position in the global economy by cutting off access from its markets and goods. Such efforts to deal with Chinese coercion and Beijing’s weaponization of global economic integration are necessary, and cannot be effective without U.S. commitment.

Yet there is already growing concern in some quarters about how and whether the United States will remain engaged. The political risk posed by Washington itself, and the possibility that any new commitments made by the White House could be overturned after the presidential elections in 2024, cannot be shrugged off, and the political division within the United States is increasingly being viewed as a risk to U.S. reliability.

Then there is wariness about the Biden administration’s ability to follow through on its oft-stated commitment to working together with like-minded countries. Several officials of member countries have been quick to point out that Washington had taken a more top-down approach in developing the concepts and determining the wording of the statement, rather than encouraging dialogue and consulting with the group.

Looking ahead, though, the real challenge of IPEF will be to get results. While the focus has been on the first of four key pillars, namely digital trade facilitation, it will actually be the coordination and information-sharing of supply chains in the technology sphere that will be especially critical in facing the China challenge. Sharing timely data to preempt disruptions will require not just coordination among central governments, but also with the private sector in each country, which will need legislative changes in most countries.

For now, IPEF is a political victory for the Biden administration, which has finally addressed the gap between its security commitment and economic engagement in the world’s most populous and dynamic region. But for U.S. businesses to flourish and U.S. interests to be protected, simply having a wide range of countries supporting the deal in principle is hardly enough. It will require a longer-term vision that will need to be embraced by the administration that follows Biden’s leadership. In that respect, the United States may still be the ultimate wild card for IPEF’s success.

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The Authors

Shihoko Goto is the director for Geoeconomics and Indo-Pacific Enterprise and deputy director for the Asia Program at the Wilson Center.

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