The United States continues to dominate world finance, but China will soon have the world's largest economy.
China significantly outperforms the United States in Indo-Pacific trade, all members of the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) and a number of non-members (Indonesia, South Korea, Philippines, and Thailand) trade more with China in 2020 This, then, underscores the challenges facing US economic diplomacy in Asia.
Successful US economic engagement in the Indo-Pacific hinges on the Indo-Pacific economic framework. But with better access to the US market as an incentive for countries to join, the framework is likely to prove an inadequate substitute for the CPTPP.
Following the conclusion of the Regional Comprehensive Economic Partnership (RCEP), which took effect on January 1, 2022, China signed up to join the CPTPP in September 2021, positioning itself as a champion of trade liberalization in the Indo-Pacific.
However, although many CPTPP countries are skeptical of China's application for a combination of economic and security reasons, the United States has offered little to offset China's rise in the CPTPP and other trade agreements.
Currently, the strongest US counterweight to China, and the best prospects for the Indo-Pacific economic framework, lies in the security domain. In 2021, the Biden administration insists on including social issues in trade agreements.
While Tai is committed to 'worker-centric' trade policies, which advance America's middle class and raise labor standards overseas, the Biden administration official said climate change, workers' rights, and the digital economy should be key points. focus for the Info-Pacific economic framework.
Attempts to address social problems through trade policy are not new, nor are they limited to the United States.
And it's possible that after the November 2022 congressional elections, Biden will look back on his trade agenda or maybe decide that the Indo-Pacific initiative is really about confronting China in the security domain.
