During President Biden’s recent trip to Asia, he announced the formation of a new economic bloc consisting of thirteen nations that he dubbed the Indo-Pacific Economic Framework (IPEF). Despite the catchy name, IPEF doesn’t present anything new or earth-shattering about American economic aims in the region. In fact, it is a downscaled and less ambitious redo of the controversial Trans-Pacific Partnership (TPP) from the end of the Obama Administration.
The announcement comes on the heels of a rough batch of quarters for the U.S. economy with forty-year highs in inflation, disruptive supply chain woes, and looming crises in both the energy and agriculture sectors.
However, IPEF is not designed to address those immediate issues; instead, it may be better interpreted as a geopolitical chess move regarding the chief adversary in the region—China.
Yet, here too, the Biden Administration is struggling to play catch up.
Only a few months before, President Xi Jinping proclaimed the creation of the Regional Comprehensive Economic Partnership (RCEP) which was meant to fill in the vacuum left by the United States pulling out of TPP in 2017.
To put this is in more stark terms, Biden is offering a deal smaller than what the United States initially proposed, and is doing it months after China put forward its regional plan. And Biden’s proposal does little, if anything, to tackle the economic problems facing Americans at home. Problems that we have focused on in recent months on the Drill Down podcast.
Biden’s plan also removes Congress from much of the framework. One Biden official, according to the New York Times, claimed that seeking congressional approval could likely be avoided given the lack of attention IPEF places on tariffs.
The move to push Congress out of the deal and leave it squarely in the hands of the Administration actually ends up leaving IPEF as vulnerable as TPP was to the winds of change. Because of a groundswell of trade-skepticism from progressives and many conservatives, TPP never had enough support to pass Congress, so President Trump was able to nix the deal with ease during his first week in office.
This dynamic is only detrimental to U.S. policy, regardless if one assumes everything in IPEF is great or not, because it invites world leaders to see negotiations with American presidents as non-committal. Why strike a deal now, when you can wait a little bit longer for a new president to come along and champion your cause?
The last twenty years of U.S. presidents’ flip-flopping priorities has diminished our collective ability to forge lasting bonds with key partners. And adversaries like China are working hard to ensure they exploit that inconsistency at every point.
