[Details] What is the IPEF of interest? Advocated by President Biden

IPEF is drawing attention as President Biden arrives in Japan.

It's a new framework for economic partnerships, but what is the purpose?

What is the difference from the frameworks such as TPP and RCEP that have appeared so far?

(Washington Branch, Yosuke Yoshitake)

What is IPEF in the first place?

IPEF is an abbreviation for a new economic partnership that is an acronym for Indo-Pacific Economic Framework, and is called "Indo-Pacific Economic Framework" in Japanese.

In a nutshell, the aim is to counter China, which the United States positions as its "biggest competitor."

They are trying to create an American-led economic zone to curb China, which is expanding its influence through infrastructure investment and trade in the region.

The advocate was President Biden of the United States.

It was first mentioned at the East Asia Summit in October 2021, and then set out as one of the concrete measures to implement the strategy in the "Indo-Pacific Strategy," which is the pillar of foreign policy.

What is the difference from "TPP" and "RCEP"?

In this region, there are the following two economic partnership agreements that Japan will join.

Of these, regarding TPP, the United States withdrew from negotiations during the Trump administration, saying that it would "hit domestic workers."

And the Biden administration, which was launched last year, is also negative to the TPP.

It hasn't returned because of the potential criticism of the workers and the prospect of opposition from the opposing Republicans in Congress.

The Biden administration has advocated IPEF as an economic partnership to replace the TPP.

On the contrary, Katherine Tai, the trade representative in charge of trade negotiations, even calls the TPP an "obsolete agreement."

Looking back on the fact that Japan was involved in negotiations bullishly during the Obama administration of the same Democratic Party, it is an expression with a sense of alienation.

"IPEF" is the "measure of pain" in the United States that cannot return to TPP from the judgment that prioritizes domestic circumstances.

Such an indication has also come out.

What are you aiming for with IPEF?

Simply put, it is the setting of common rules and principles for trade and business by participating countries.

The four pillars targeted are

▽ trade (digital, etc.)

▽ supply chain = supply network

▽ decarbonization, clean energy, infrastructure

▽ tax system, anti-corruption measures.

The United States says it will strengthen cooperation in these four areas, but its main purpose is to restrain China, which considers it to be expanding its business through unfair practices.

In order to strengthen its own economic security, the United States has banned the export of semiconductors to Chinese high-tech companies suspected of being diverted to military use, and banned the import of products believed to have been produced by forced labor in the Xinjiang Uygur Autonomous Region. We are introducing measures one after another.

The United States seems to have the aim of sharing similar rules and ideas in the Indo-Pacific region through the four pillars.

What are the benefits of participating countries?

That is exactly the point.

The major difference between IPEF and traditional free trade agreements such as TPP and RCEP is that they do not negotiate tariffs.

They will not negotiate the elimination or reduction of tariffs aimed at expanding exports of industrial and agricultural products, which have been regarded as a symbol of the merits of free trade.

The lack of tariff negotiations makes it difficult for participating countries to benefit from expanding exports to the United States, which has a large market.

In addition, there are cautions that the United States, which is in conflict with China, may impose various rules.

China is also the largest trading partner for ASEAN, which the United States expects to participate in.

According to JETRO = Japan External Trade Organization, 19% of the total trade amount will be dealing with China in 2020, and there is a view that participating in this framework may affect the dealings with China. I have.

What is the perception of each country?

There is a temperature difference in the perception of each country that is being asked to participate.

The Biden administration has said that IPEF will be "launched early", but it does not seem to be proceeding as planned.

For this reason, there is information from the people concerned that the United States has changed the conditions for participation so that it can select the field in which it wants to participate, instead of all four pillars, in order to increase the number of participating countries as much as possible.

And Japan, which is worrisome, welcomes IPEF as an indication of the United States' positive commitment to the Indo-Pacific region and is positively considering its participation.

At the same time, however, it has not changed the position that it is desirable for the United States to return to the TPP.

IPEF has the impression that there are many problems even before it starts.

Is it possible to increase the number of participating countries as the United States thinks, or is it possible to make highly effective cooperation?

It seems to attract attention.