The High Cost of Limp US Economic Leadership
While the bulk of immediate US media coverage of the latest APEC meeting in San Francisco focused on President Biden’s meetings with Chinese leader Xi Jinping, it may well be the lack of US economic leadership that will have lasting consequences.
The Asia-Pacific Economic Cooperation was an opportunity not only to showcase Washington’s commitment to remain a Pacific power even as it continues to be pulled into ongoing conflicts in both Ukraine and the Middle East. It was also a chance to offer a vision for growth and reimaging a path for economic interdependence in the world’s most vibrant region. While the Biden administration’s push for its Indo-Pacific Economic Framework to provide a new US-led way forward for greater regional economic integration was met with muted enthusiasm at best amongst US allies and partners, IPEF nonetheless represented a good faith effort on the part of Washington to lead on issues that ultimately bring the diverse group of 14 Indo-Pacific nations together.
The inability to reach an agreement on trade, the single biggest interest amongst the member countries on the sidelines of APEC, represents more than simply one of the four pillars that make up IPEF being shelved. More troubling is the fact that a trade framework that was put forward by the current administration continued to face opposition within the United States, highlighting the fact that trade remains a highly politically sensitive issue amongst Washington’s policymakers. Yet given the fact that IPEF does not allow US market access, the trade pillar would have had little impact on US businesses at home.
What has been lost, on the other hand, is a political victory for the United States in demonstrating economic leadership...
What has been lost, on the other hand, is a political victory for the United States in demonstrating economic leadership and the chance for Washington to work together with its like-minded partners across the Indo-Pacific to meet the emerging needs for growth.
In its editorial page following the conclusion of APEC, the Jakarta Post argued that IPEF is “to counter China’s growing influence in the Asia-Pacific region,” and that “IPEF will be deemed meaningless in many ASEAN capitals, as it appears to include few rights but many responsibilities.”
A framework without market access had never been popular in Southeast Asia at a time when Washington must not only enhance military cooperation, but broader political as well as economic relations across the region. The pillars on enhancing supply chain resilience, boosting sustainable growth, and advancing good governance should not be underestimated. But as Washington looks to enhance ties with its regional partners across Southeast Asia, the United States can no longer ignore the fact that enhancing trade relations that provide growth opportunities and the ability to move up the value chain that is the most needed and expected. Furthering economic integration is not an option, but rather a prerequisite to enhance Washington’s relations with the world’s most dynamic region.
Follow Shihoko Goto, deputy director for geoeconomics and senior associate for Northeast Asia, on Twitter @GotoEastAsia.
The views expressed are the author's alone, and do not represent the views of the U.S. Government or the Wilson Center. Copyright 2023, Asia Program. All rights reserved.
About the Author
Shihoko Goto is the director for geoeconomics and Indo-Pacific enterprise and acting director for the Asia Program at the Wilson Center. Her research focuses on the economics and politics of Japan, Taiwan, and South Korea, as well as US policy in Northeast Asia. A seasoned journalist and analyst, she has reported from Tokyo and Washington for Dow Jones and UPI on the global economy, international trade, and Asian markets. A columnist for The Diplomat magazine and contributing editor to The Globalist, she was previously a donor country relations officer for the World Bank and has been awarded fellowships from the East-West Center and the Knight Foundation, among others.Read More
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