In Tokyo on Monday, Biden presented his “Indo-pacific Economic Framework” (IPEF), with which the USA wants to stand up to China in Asia.
(Photo: IMAGO/Kyodo News)
Tokyo Free trade is currently in a difficult position anyway. Joe Biden is now causing another setback on his trip to Asia. In Tokyo, the US President presented his “Indo-Pacific Economic Framework” (IPEF). The main goal: The US wants to stand up to China in Asia. Biden wants to lay the foundation for a US-centric economic order in the age of the great power conflict with China. However, the risks of this policy are not only borne by China, but also by export-oriented nations in Europe – above all Germany.
Biden’s national security adviser Jake Sullivan said it bluntly in Korea over the weekend: “I think this new model will set the conditions and rules for trade, technology and supply chains for the 21st century.”
With this, the United States is finally saying goodbye as a pioneer of multilateral, global free trade. The world’s largest economy is now pursuing strategic trade, offering selected partners cooperation in specific areas of US industrial and geopolitical importance.
The participating countries will then be allowed to jointly develop supply chains for semiconductors and other products with the USA. In addition, the US wants to establish rules for the digital economy, promote renewable energies and invest in Asia’s infrastructure. In return, however, the partners do not receive duty-free access to the American market, which is viewed critically in some Asian countries.
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Biden is basically continuing the trade policy of his predecessor Donald Trump. He withdrew the US from the geostrategic important Transpacific Partnership Agreement (TPP) and tried to negotiate better bilateral deals with tariff threats. Biden is now casting that policy into a more effective strategic framework.
For companies that have previously relied primarily on China, this is likely to become a problem. Because the IPEF will accelerate the splitting of the world into blocs.
Why Japan and Korea are in favor of IPEF
There is a simple reason why Asia’s export-oriented champions of free trade, the US allies Japan and South Korea, still support the divisive initiative: For them, the IPEF is plan B in the geopolitical competition with China. Japan’s government continues to hope that the US will return to TPP. In addition, from the point of view of Japan and South Korea, it is generally positive that their protecting power is pushing back into the economic vacuum left by Trump.
In order to at least counteract the arbitrary rule of the great powers, Japan is currently intensifying its cooperation with like-minded people such as Germany, Australia and the European Union. South Korea’s new government now wants to try this too. Europe should seize the opportunity to gain technologically strong Asian partners for the new age.
More: US President Biden is courting Asia with a new initiative