The Biden administration is currently involved in the development of a trade deal called the Indo-Pacific Economic Framework for Prosperity (IPEF), aimed at boosting the U.S. economy and countering China’s influence in the region. Reports suggest that the process has been disorganized and challenging, leading to an outcome that may not be perfect. The deal is expected to be announced during the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco, which will also host a meeting between Chinese President Xi Jinping and President Joe Biden. California Governor Gavin Newsom has displayed a conspicuously friendly attitude towards Xi, potentially positioning himself as more China-friendly than Biden. San Francisco has even managed to temporarily clear its homeless population to create a presentable image for Xi’s visit.
The administration’s goal is to present the trade pact as a victory against China’s economic rise and to combat any criticism from Republican candidates, including former President Donald Trump, who has previously criticized trade agreements such as the Trans-Pacific Partnership (TPP). Despite the administration’s efforts to address the concerns of labor unions, there remains a significant obstacle in achieving consensus on labor and environmental standards for developing nations. Convincing less affluent Asian nations to adhere to the worker standards advocated by the U.S. labor movement has proven to be challenging.
Although progress has been made, some nations involved in the IPEF negotiations are not fully supportive of the expensive labor and environmental standards proposed by the U.S. There are concerns regarding whether U.S. foreign policy genuinely considers workers’ rights or if the focus is solely on increasing cooperation with countries like Vietnam to draw them away from China.
China, on the other hand, has been attracting developing nations by offering partnerships free from Western demands related to human rights, including LGBTQIA++ rights, which are unwelcome in many regions of the “Global South.” The Chinese regime relies on slave labor and disregards environmental regulations, giving it a competitive advantage in attracting partner nations.
The ongoing conflict between Israel and Hamas has thrown a further wrench into the APEC meeting, affecting member states with Muslim governments or significant Muslim populations. One example is Indonesia, which holds the world’s largest supply of nickel, a vital material for electric vehicle batteries. During a bilateral meeting between outgoing Indonesian President Joko Widodo and President Biden, the topic of establishing a minerals partnership was discussed. However, the deal faces obstacles due to U.S. demands for workplace and environmental standards deemed burdensome by Indonesia.
Expectations for significant progress at the APEC meeting and the IPEF deal are low, as the Biden administration is misaligned with the priorities of key APEC members. These nations are more willing to engage in business with China’s regime, despite concerns over its aggression. It is anticipated that minor progress may be made in areas such as customs facilitation and clean energy financing in Asia. The Biden administration is primarily focused on convincing potential IPEF partners to slightly improve their workplace standards to avoid complaints from American labor unions about the cost disparity with overseas competitors.
Ultimately, Asian leaders are seeking deals and growth, and they do not want Washington’s pessimistic geopolitical rivalry with China or its domestic political priorities to overshadow the region’s optimistic agenda of trade liberalization.