MercoPress. South Atlantic News Agency

US, Japan and ten more nations establish the Indo-Pacific Economic Framework

The agreement which also includes Australia, NZ, South Korea and India represent 40% of the world’s Gross Domestic Product (GDP).

United States President Joe Biden established a new trade agreement with 12 Indo-Pacific countries to strengthen economic relations in the region. The announcement was made Monday at a press conference following a meeting between Biden and the Prime Minister of Japan, Fumio Kishida.

The Indo-Pacific Economic Framework is a new trade agreement that aims to strengthen stability in international trade after disruptions caused by the pandemic and the Russian invasion of Ukraine.

The nations joining the US in the agreement are Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. Along with the United States, these countries represent 40% of the world’s Gross Domestic Product (GDP).

In a statement, the group said that the pact will collectively “prepare our economies for the future.”

In addition to Biden and Kishida, Indian Prime Minister Narendra Modi was also at the deal’s launch event, while representatives from other countries made an appearance on video.

According to the White House, the framework would enhance cooperation between the US and Asian countries on topics such as supply chains, digital commerce, sustainable energy, worker rights, and anti-corruption measures. However, details are still being worked out between member nations, making it impossible to predict how advantageous the pact will be for US workers and businesses.

Critics say the deal has obvious flaws, such as not offering incentives to potential partners with tariff reductions or providing signatories with greater access to US markets. These limitations may make the new agreement less attractive than the Trans-Pacific Partnership (TPP), which has advanced even after the US exit. China, the biggest trading partner of many countries in the region, is also looking to join the TPP.