US President Joe Biden presented the Indo-Pacific Economic Framework (IPEF) on Monday, a broad economic project aimed at countering China’s influence in the Indo-Pacific area. The IPEF represents nearly 40% of world gross domestic product.
According to Bloomberg. The countries in the IPEF represent $34.7 trillion in world output. Or 41% of global output, compared to $31.7 trillion for TPP members.
In addition to Australia, the largest economies in IPEF are Japan and India. Both of which are members of the Quad group of nations. South Korea and New Zealand were also involved in the economic accord, as were seven Southeast Asian countries.
“I want to be clear that the framework will be open to others who wish to join in the future — if they sign up and meet the goals and work to achieve those goals,” the US president said.
The Indo-Pacific Economic Framework aims to improve our economies’ resilience, sustainability, inclusiveness, economic development, fairness. And competitiveness, according to a joint statement from the countries.
We hope to contribute to regional collaboration, stability, prosperity, development. And peace through this initiative,” the countries said in the statement.
According to the person, the US intends to know which countries would join in each of the four pillars by mid-June and to have substantive commitments in 12 to 18 months.
Countries in Southeast Asia, in particular, had asked that the US keep the framework open to China. The framework included Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
Since former President Donald Trump withdrew from the Trans-Pacific Partnership agreement negotiated under the Obama administration in 2017, the IPEF is the most significant US endeavor to engage Asia on economic issues.
However, unlike that trade agreement, the new framework has no tariff reductions and it is unclear. Which portions are legally binding, making it difficult to evaluate the economic advantages.