Biden launches Indo-Pacific trade deal, warns of inflation


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U.S. President Joe Biden, right, disembarks from Air Force One upon arrival at Yokota Air Base, Sunday, May 22, 2022, in Fussa, on the outskirts of Tokyo, Japan. (AP Photo/Evan Vucci)

PA

President Joe Biden on Monday launched a new trade deal with 12 Indo-Pacific countries aimed at strengthening their economies as he warned Americans worried about high inflation that it was “going to be a blow” before they don’t feel relieved. The president said he does not believe an economic recession is inevitable in the United States

Biden, speaking at a press conference after speaking with Japanese Prime Minister Fumio Kishida, acknowledged that the US economy had “problems” but said they were “less significant than the rest of the world”.

He added: “It’s going to be a loot. It’s going to take time,” although he dismissed the idea that a US recession was inevitable.

The comments came just ahead of Biden’s launch of the Indo-Pacific Economic Framework, a new trade deal his administration designed to signal the United States’ dedication to the contested economic sphere and to address the need for trade stability after the disruption caused by the pandemic and the invasion of Russia. Ukraine.

Nations joining the United States in the Indo-Pacific Economic Framework include Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand and Vietnam. Together with the United States, they represent 40% of world GDP.

The countries said in a joint statement that the pact will collectively help them “prepare our economies for the future” following the disruption caused by the coronavirus pandemic and Russia’s invasion of Ukraine.

Biden and Kishida were joined by Indian Prime Minister Narendra Modi while representatives from other countries appeared via video to help launch the pact. Modi was in Tokyo for Tuesday’s meeting of the Quad, a security group that also includes the United States, Japan and Australia.

The White House said the framework will help the economies of the United States and Asia work more closely on issues such as supply chains, digital trade, clean energy, worker protections and efforts of fighting corruption. Details have yet to be negotiated among member countries, making it difficult for the administration to say how this deal would fulfill the promise of helping American workers and businesses while addressing global needs.

Critics say the framework has gaping flaws. It does not offer incentives to potential partners by lowering tariffs or giving signatories better access to US markets. These limitations may not make the US framework an attractive alternative to the Trans-Pacific Partnership, which grew further after the US bailout. China, the biggest trading partner for many in the region, is also looking to join the TPP.

“I think a lot of partners will look at this list and say, ‘That’s a good list of issues. I’m happy to be involved,” said Matthew Goodman, former director of international economics at the National Security Council in the administration of President Barack Obama. But he added that they might also ask, “Are we going to see tangible benefits from our participation in this framework?”

Kishida hosted an official state welcome for Biden at the Akasaka Palace, including a white-clad military honor guard and a group in the front plaza. Reviewing the assembled troops, Biden placed his hand over his heart as he passed the American flag and bowed slightly as he passed the Japanese ensign.

Kishida said when they met he was “absolutely thrilled” to welcome Biden to Tokyo on the first trip to Asia of his presidency. Along with Biden, he has taken a hard line against Russia over its invasion of Ukraine, saying it “undermines the foundations of the world order”.

Biden, who is in the midst of a five-day visit to South Korea and Japan, called the U.S.-Japan alliance a “cornerstone of peace and prosperity in the Indo-Pacific” and thanked Japan for its “strong leadership” in rising. in Russia.

The White House announced plans to build the economic framework in October as a replacement for the Trans-Pacific Partnership, which the United States abandoned in 2017 under then-President Donald Trump.

Kishida, while welcoming Biden’s new trade pact, said he hoped Biden would reconsider the United States’ position on the TPP.

“Our position remains unchanged,” Kishida said. “We believe it is desirable for the United States to return to the TPP.”

The new pact comes at a time when the administration believes it has the edge in its competition with Beijing. Bloomberg Economics released a report last week forecasting US GDP growth of around 2.8% in 2022, compared to 2% for China, which has tried to contain the coronavirus with strict containment measures while dealing with a real estate crisis. The slowdown undermined assumptions that China would automatically supplant the United States as the world’s largest economy.

“The fact that the United States is growing faster than China this year, for the first time since 1976, is a pretty stark example of how countries in this region should look at trends and trajectories.” , said the national security of the White House. adviser Jake Sullivan.

The two leaders were also due to meet families of Japanese citizens abducted by North Korea decades ago. Japan’s prime minister took office last fall and is seeking to strengthen ties with the United States and establish a personal relationship with Biden. He will welcome the president to a restaurant for dinner.

The launch of the Indo-Pacific Economic Framework, also known as the IPEF, was touted by the White House as one of the highlights of Biden’s trip to Asia and his ongoing efforts to strengthen ties with the Pacific allies. Through it all, administration officials have kept a close eye on China’s growing economic and military power in the region.

In September, the United States announced a new partnership with Australia and Britain called AUKUS that aims to deepen security, diplomacy and defense cooperation in the Asia-Pacific region. Through this AUKUS partnership, Australia will purchase nuclear-powered submarines and the United States will increase rotational force deployments to Australia.

The US president has also paid close attention to the informal alliance known as the Quad, formed during the response to the 2004 Indian Ocean tsunami that killed some 230,000 people. Biden and his fellow alliance leaders are set to gather in Tokyo for their second in-person meeting in less than a year. The leaders have also held two video calls since Biden took office.

And earlier this month, Biden brought representatives from nine of the 10 members of the Association of Southeast Asian Nations to Washington for a summit. Biden announced at the summit that the United States would invest some $150 million in clean energy and infrastructure initiatives in ASEAN countries.

Taiwan — which had applied for membership in the IPEF framework — is not among the governments that will be included. The participation of the self-governing island of Taiwan, which China claims as its own, would have angered Beijing.

Sullivan said the United States wants to deepen its economic partnership with Taiwan, especially on high-tech issues and the supply of semiconductors on a one-to-one basis.

Biden also issued a stark warning to China over Taiwan, saying the United States would respond militarily if China invaded the self-governing island. “That’s the commitment we made,” Biden said.

The United States recognizes Beijing as the sole Chinese government and does not maintain diplomatic relations with Taiwan. However, it maintains unofficial contacts with Taiwan, including a de facto embassy in Taipei, the capital, and provides military equipment to the island for its defense.

Biden’s comments were likely to draw a heated response from China, which has claimed Taiwan is a rogue province.

A White House official said Biden’s comments did not reflect a change in policy.

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Associated Press writers Zeke Miller and Darlene Superville in Washington contributed to this report.

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