Indo-Pacific Economic Agreement Signed by Biden and Regional Leaders to Counter China's Economic Influence

U.S. President Joe Biden and leaders of 13 Asia Pacific countries have signed a new economic agreement, the Indo-Pacific Economic Framework (IPEF), aimed at countering China’s regional economic dominance. The agreement, which is not a formal trade deal, focuses on enhancing supply chain resilience and addressing issues such as future semiconductor shortages. The IPEF's objectives include promoting workers' rights, improving supply chain capabilities, transitioning to clean economies, combating corruption, and enhancing tax administration efficiency.

Biden announced a program under the agreement to collaborate with startups to raise capital, based on the U.S. Partnership for Global Infrastructure and Investment. This initiative is seen as the U.S. response to China’s Belt and Road Initiative. He emphasized the necessity of trillions of dollars in private sector investment to support these efforts and create a pipeline of projects in partner countries.

However, there has been criticism regarding the new agreement's lack of market access provisions. Indonesian CEO Anindya Bakrie expressed concerns about the absence of market access in IPEF. Joshua Kurlantzick, a senior fellow for Southeast Asia at the Council on Foreign Relations, noted that most Southeast Asian states are lukewarm about the deal, citing the lack of market access as a key difference between IPEF and other major trade agreements involving Asian countries including China, South Korea, Japan, and ASEAN members.