Understanding IPEF and How It Counters China’s Clout

First the US withdrew in 2017 from a pan-Pacific trade deal known as the TPP, which moved ahead without it under the new moniker CPTPP. Then the US stood on the sidelines as another regional grouping led by China, called the RCEP, entered into force this year. Now China is warily watching the US as it forms its own regional club, dubbed the Indo-Pacific Economic Framework. Questions remain as to what the IPEF will actually do and how it and the trade deals will impact American and Chinese efforts to boost their clout -- and business -- across Asia.

It’s key to US President Joe Biden’s efforts to counter China’s clout in Asia in the economic sphere by partnering with other countries. (Other regional groups the US belongs to such as the Quad focus on security.) The IPEF has four pillars: supply-chain resilience; clean energy, decarbonization and infrastructure; taxation and anti-corruption; and fair and resilient trade. The Biden administration also has been working to include digital issues like localization and cross-border flows of data. But details are hazy and the administration has stressed it won’t include lower tariffs or better access to US markets. “Through this initiative, we aim to contribute to cooperation, stability, prosperity, development, and peace within the region,” the countries said in a joint statement announcing the IPEF.