US announces agreement with 13 nations on supply chain
The United States announced on Saturday it had reached an agreement with 13 other countries to coordinate supply chains in an effort to lessen their dependence on China for critical products.
The deal, aimed at building supply chains thatexcluding China, is the first result of the Joe Biden administration's trade initiative in Asia, the Indo-Pacific Economic Framework for Prosperity. Negotiations continue on other pillars of the framework that focus on areas such as digital trade, clean energy, and fighting corruption.
With 60 percent of the world's population and expected to be the biggest contributor to global growth in the next three decades, the US has made a strategic pivot to the Indo-Pacific region as a top priority as a means to counter China on the trade and economic front. After the previous administration pulled out the US from the Trans-Pacific Partnership, an ambitious trade pact encompassing Asia-Pacific nations, the task has gained a sense of urgency. The US wants to restore its economic leadership in the region and is presenting Indo-Pacific countries an alternative to China's approach, said US Commerce Secretary Gina Raimondo, the administration's economic framework for the region.
The economic and trade engagements that have already existed between China and the regional nations have not been a clear indicator of the platform's anticipated results. The regional Economic Partnership, the world's biggest trading bloc, now comprises China with 10 members of the Association of Southeast Asian Nations plus four other regional nations, as well as a vital hub of trade and investment in the region. The creation of an ideology-based exclusive trade arrangement that offers neither greater access to the market nor tariff reductions is a fact that will not be easily changed.
Even U.S. business groups have expressed reservations about the Indo-Pacific deal. In a public letter to the government, more than 30 of them, including the US Chamber of Commerce and the National Association of Manufacturers, said the negotiations were leaving out traditional US trade priorities that could help US businesses. Besides, the deal carries more symbolic significance in trying to depict China as a disruptor of global supply chains rather than bringing any substantial benefits to US and other countries' companies.
The Asia-Pacific region's economic prosperity has been achieved through cooperation and mutual benefit among regional nations based on open and inclusive trade agreements. Any arrangement that's discriminatory, exclusive or of a protectionist nature will serve no party any good. The US's attempts to hold back China's development by politicizing trade and economic issues and cajoling other nations into adopting anti-China trade policies are especially true of the effort by the United States to tackle China's development by manipulating trade and economic issues, something that will significantly disrupt the global industry and supply chains with indiscriminate effects.