Trade, supply chains on agenda as Asian nations start two-day talks with US

The meeting is expected to produce a joint statement on specific actions. PHOTO: REUTERS

WASHINGTON - The first in-person, ministerial-level meeting of the 13-nation Indo-Pacific Economic Framework (IPEF) began on Thursday in Los Angeles, amid hopes that it will produce more details on the US-led initiative which has thus far lacked specifics.

United States Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo are hosting the meeting, which will discuss issues under the four pillars: trade; supply chains; clean energy, decarbonisation and infrastructure; and taxes and anti-corruption.

The two-day meeting is expected to produce a joint statement on specific actions.

Twelve Indo-Pacific countries have signed up for the IPEF, launched in May by President Joe Biden, in response to pressure to engage with the Indo-Pacific region beyond security issues.

The US' withdrawal from the Trans-Pacific Partnership five years ago was a severe blow to its credibility in the region, which went ahead with a modified agreement.

Besides the US, the signatories are Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam. Washington, which wants to decouple from China, sees the IPEF as ensuring the Indo-Pacific's economic architecture is not Sino-centric.

US officials who briefed reporters on Wednesday said the IPEF was not being cast as a choice between China and the US.

In an article on the Harvard Kennedy School's Ash Centre website, Vietnam programme senior economist David Dapice said: "There is no doubt that IPEF is sensitive to the desire of Asian countries not to have to choose between the US and China.

"It is much less clear if it is a complete strategy or an adequate policy package to counter China's gains in the economic sphere in Asia."

Expectations of the meeting seem cautiously optimistic.

Singapore Minister for Trade and Industry Gan Kim Yong wrote in a Facebook post as he headed to LA: "Hope to create more opportunities for our businesses and people."

Dr Tan See Leng, Singapore's Second Minister for Trade and Industry, told Bloomberg the IPEF could be a forum for "cross-fertilisation of ideas, and then we can move things together as a bloc".

"We hope that it could be a lot more inclusive," Dr Tan said.

Stressing the need for more partnerships, a senior US administration official said: "We are laser-focused on… bringing stability and resilience to our supply chains, especially in countries that are integral to producing and moving critical products."

Jakarta-based Ms Lydia Ruddy, director of communications and special adviser on US-Asean affairs to the president of the Economic Research Institute for Asean and East Asia, told The Straits Times: "Asean countries are interested to see what happens so they will participate to the extent that it is politically feasible."

"Indonesia will most likely join supply chain and perhaps two other (pillars) but not trade," she added.

International business professor Pavida Pananond at Thammasat University in Bangkok said the two current most pressing pillars for South-east Asia are trade and supply chain resilience.

"However, resilience does not mean the same thing for all stakeholders" she said.

"The state-led view on resilience as a national security issue may not be shared by countries and firms in the IPEF region.

"Intra-regional trade and investment flows in Asia have risen significantly in the past two decades, thanks partly to tighter integration of supply chains that include China," she added.

"Starting a new economic agreement that intends to decouple those ties, while at the same time not offering much market access opportunities to the US, may not offer much 'resilience' to other stakeholders in this US-driven initiative."

Join ST's Telegram channel and get the latest breaking news delivered to you.