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Fate of IPEF stuck in limbo without 4th pillar: China Daily editorial

chinadaily.com.cn | Updated: 2023-11-20 19:55

US President Joe Biden hosts the Leaders Retreat at the Asia-Pacific Economic Cooperation (APEC) Summit in San Francisco, California, US, Nov 17, 2023. [Photo/Agencies]

It would have been a tremendous achievement for the Joe Biden administration had the negotiations been finalized on the trade"pillar" for its"Indo-Pacific Economic Framework for Prosperity" in San Francisco.

The administration desperately wanted such a success, not only as a symbol of the United States' economic reengagement with the Asia-Pacific, but also to present countries in the region with an"alternative" to trading with China.

Yet they failed. Many believe, the IPEF may repeat the dismal ending of the Trans-Pacific Partnership, the other US-initiated economic grouping aimed in part at countering China.

The Biden administration has proposed four"pillars" for the IPEF: supply chains, climate, tax and anti-corruption, and trade. A deal on the first of those pillars was signed in May. US Secretary of Commerce Gina Raimondo announced in San Francisco the US government had reached agreements in principle on the second and third pillars. When it comes to the most crucial pillar, pillar four, however, the US and other IPEF members will have to"regroup","recalibrate", and have"a little different path" for their negotiations next year, according to US Deputy Trade Representative Sarah Bianchi.

But everyone, Bianchi included, seems to be pessimistic about the IPEF surviving the election year. Proposed by the US president during his May 2022 visit to Japan, the IPEF was an ambitious response to China's trade position in the Asia-Pacific. But it always seemed to be too overambitious to succeed. Negotiating such an expansive framework in a year and a half with a dozen other countries is a challenging, if not impossible, task.

India was the first to sit out of the trade talks under pressure from domestic businesses. Some other members have found the US demands for labor and environmental standards difficult to accept. Not to mention their more pressing needs of lower US tariffs and better access to the US market are simply not on the table for discussion.

But the biggest obstacle is the domestic politics in the US. Two US senators from the president's own party have urged the White House to drop the IPEF altogether. Senate Banking Chair Sherrod Brown called the trade portion of the IPEF"unacceptable". The fear is Republicans will paint the IPEF as a job-outsourcing trade deal, which will frustrate the Democrats in 2024. After all, US labor unions opposed the TPP in 2015 for this reason, and many voters dislike the idea.

Donald Trump, the former president who personally killed the TPP and is now a front-runner for the Republican presidential nomination, has vowed to do the same to the IPEF should he win in 2024."The Biden plan for'TPP II' will be dead on day one", he promised.

In fact, the IPEF already seems dead in the water.

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