The Indo-Pacific Economic Framework for Prosperity expands on the Quadrilateral Security Dialogue, and while Monday’s announcement does not specifically mention China, the QSD was originally propped up to counter China’s economic and security influence over the region.
In addition to Australia, India, Japan, and the United States, the IPEF signatories include Indonesia, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam, representing roughly 40% of the global economy.
“U.S. economic leadership in the region is good for American workers and businesses — as well as for the people of the region,” the White House said in a statement. “IPEF will enable the United States and our allies to decide on rules of the road that ensure American workers, small businesses, and ranchers can compete in the Indo-Pacific.”
The framework itself commits the various governments to fostering innovation across the clean energy, digital, and technology sectors “while fortifying our economies against a range of threats, from fragile supply chains to corruption to tax havens.”
White House officials and Biden himself are highlighting inflation as the president’s top economic focus, and skyrocketing prices in the U.S. and abroad have been exacerbated over the past 2 years by pandemic-related manufacturing stoppages in the Indo-Pacific region.
Officials say IPEF will “help lower costs by making our supply chains more resilient in the long term, protecting us against costly disruptions that lead to higher prices for consumers.”
The administration estimates that U.S. investments in the Indo-Pacific total roughly $1 billion annually and affect more than 3 million domestic jobs. The Indo-Pacific region accounts for 60% of the global population and is expected to the largest contributor to global economic growth over the next 30 years.
Biden’s announcement comes on the tail end of his first trip as president to Asia. He visited South Korea over the weekend before traveling to Japan on Sunday.
In addition to discussing economic goals for the region, the president and his counterparts specifically addressed North Korea’s escalating nuclear weapons tests.
Taiwan is not included in the IPEF.
U.S. Trade Ambassador Katherine Tai recently met with her Taiwanese counterpart, and national security adviser Jake Sullivan told reporters Sunday that the U.S. is “looking to deepen our economic partnership with Taiwan, including on high-technology issues, including on semiconductors and supply chains.”
Taiwan is the world’s largest semiconductor manufacturer, and officials suggest that including it in the pact could destabilize the work the administration is doing to repair the U.S. relationship with China.
“It’s not a surprise to me that China has concerns about the number of countries, the diversity of countries who have expressed interest in and enthusiasm for IPEF,” Sullivan added. “We do expect, in addition to the countries that join for the launch tomorrow, others will come along in the months and years ahead.”