13 nations join economic framework for Indo-Pacific

US President Joe Biden yesterday launched a new economic framework to bind countries in the Asia-Pacific region more closely through common standards in areas such as supply chain resilience and clean energy. The grouping has 13 initial members, including Singapore.

Leaders from the 13 countries that form the Indo-Pacific Economic Framework for Prosperity (IPEF) attended the launch event in Japan, where Mr Biden is on the second leg of his first Asia trip as president.

The inaugural members of the grouping comprise Australia, Brunei, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand, the United States and Vietnam, which account for around 40 per cent of the world's gross domestic product (GDP) between them.

"We are writing the new rules for the 21st-century economy," Mr Biden said at the launch event.

The Indo-Pacific region covers half the world's population and more than 60 per cent of global GDP, he noted. US foreign direct investment in the region totalled more than US$969 billion (S$1.3 trillion) in 2020.

"The nations represented here today, and those who will join this framework in the future, are signing up to work towards an economic vision that will deliver for all our peoples: The vision for an Indo-Pacific that is free and open, connected and prosperous, and secure as well as resilient... where economic growth is sustainable and is inclusive," said Mr Biden.

Unlike a traditional free trade pact, the IPEF is unlikely to lead to lower tariffs or increased market access to the US. It will instead focus on four "pillars", covering areas such as clean energy, commitments to make supply chains more resilient, cracking down on corruption and pursuing new rules governing trade in digital goods and services.

Prime Minister Lee Hsien Loong, who attended the launch virtually, said the IPEF is of both strategic and economic significance.

"It can be a valuable platform for the US to exercise economic diplomacy in the region, and it clearly signals the US' continued commitment to engage with its partners in Asia, and deepen ties across the Pacific," he said.

PM Lee said it was important that the framework remains open, inclusive and flexible, with membership open to other nations when they are ready to join.

"We look forward to working closely with the US and other partners to flesh out the IPEF. We hope that in due course, it will lead on to even greater and more ambitious economic engagement between the US and the region."

Mr Biden is scheduled to attend a Quad summit in Tokyo today.

The IPEF is aimed at offering US allies and partners an alternative to China's growing economic ties across the Asia-Pacific.

However, a tariffs-based Asia trade deal remains out of sight, following former US president Donald Trump's 2017 withdrawal from the Trans-Pacific Partnership. This was revived under a new free trade agreement in 2018 with 11 countries, but without the US.

Speaking at the launch yesterday, leaders from the founding countries outlined how they intended to contribute to discussions, and expressed hopes for more countries to join the IPEF in the future.

Japanese Prime Minister Fumio Kishida said the fact that Mr Biden was visiting Japan and announcing the launch there was a clear demonstration of the US' strong commitment to the region.

Malaysia's Senior Minister of International Trade and Industry Mohamed Azmin Ali said the framework should be an "all-inclusive" platform. It was imperative to keep engaging all Asean member states in the initiative, he said.

Although references to China were avoided at the event, Beijing took a dim view of the IPEF. Foreign Ministry spokesman Wang Wenbin said yesterday that it was forcing countries in the region to choose between the US and China.