US Needs Greater Asian Focus: Report

The United States must focus on increasing economic and trade ties with the Indo-Pacific to remain competitive with China, the Asia Society Policy Institute said in a new report.

The US-led Indo-Pacific Economic Framework negotiations are a step forward, but are likely to fall short of creating a true alternative to the more comprehensive trade agreements offered by China, the report warns.

"Just as China has gained a major diplomatic and national security advantage over the United States through its Belt and Road Initiative, it is now potentially on track to do the same through its vigorous pursuit of trade agreements around the world, and specifically in its backyard," the authors assert.

The report, Jump-Starting US Trade and Economic Engagement in the Indo-Pacific, was written by ASPI Vice President Wendy Cutler and Clete Willems, a partner at Akin Gump Strauss Hauer & Feld.

“To put it bluntly, if the US does not take a bolder approach, we risk becoming spectators as our partners work among themselves and with China to strengthen supply chain connectivity and regional economic integration,” they wrote. “This will substantially undermine the United States’ long-term economic, national security, and geopolitical influence.”

The report outlines four recommendations for stepping up regional economic engagement while keeping apace with China’s vigorous pursuit of regional trade agreements:

Rejoin a Reimagined Comprehensive and Progressive Trans-Pacific Partnership. The authors’ preferred approach is for the United States to work with other CPTPP partners to update and renegotiate core areas of the CPTPP agreement, but they recognize that this approach may not be politically viable at this time

Embark on “Phase 2” IPEF Negotiations. Washington could propose a second phase of the IPEF negotiations to build on the results expected this year. Areas where more substantive commitments could be pursued fall under the supply chain and trade pillars, including introducing market access commitments.

Encourage More Economies to Join the US-Mexico-Canada Agreement. The United States could expand membership in its most popular trade agreement in recent years, which enjoys broad bipartisan support, to include new partners.

Start from Scratch. The United States could go back to the drawing board and develop a new template for trade agreements, drawing on a wide range of existing agreements and new ideas. To be credible, input from a wide range of stakeholders should be welcomed.

[Read the Paper Here]