IPEF sits on shaky foundations

Japan's outward enthusiasm for the United States' ill-defined Indo-Pacific Economic Framework for Prosperity, or IPEF, papers over unease in government circles on Washington's intentions for the trade initiative launched last week.

Within a week of US President Joe Biden's visit to Tokyo for the launch on May 23, alongside Japanese Prime Minister Fumio Kishida, many Japanese began asking questions about their country's participation in the framework, with some analysts saying the initiative has less to do with "prosperity" than with "proscription".

"Nobody has any doubt now that Washington's Indo-Pacific agenda is to create divisions by allocating so-called allies and partners to counter China," said Liu Qingbin, a former professor at the Institute of Advanced Sciences at Yokohama National University in Japan and now senior researcher at the China Digital Economy Institute.

"Be it, the Quad or the IPEF, with their so-called security or economics considerations, the wildest dream of the US with such efforts is to exclude China, to proscribe signing members from doing business with China. Everybody, including in Japan, knows that's not possible."

Japan has been part of the behind-the-scenes efforts for the establishment of the IPEF since it was notified about the plan last summer. Yet, until the launch of the initiative last week, Tokyo was vacillating on whether its main focus should lie on the IPEF or the Comprehensive and Progressive Trans-Pacific Partnership Agreement, or CPTPP, a trade pact that had its origins in the Trans-Pacific Partnership. The latter never got off the ground after its one-time lead backer, the United States, pulled out of the deal. Japan has joined the CPTPP.

"We genuinely welcome the rollout of the IPEF in Japan and strongly support it," Kishida said when Biden launched the framework in Tokyo.

But minutes later, at a joint news conference with Biden, Kishida gave encouragement for the US to join for the CPTPP. He did so despite knowing full well that Biden can't afford to ignore the strong sentiment against trade deals at home.

Kishida went on to mention the trade agreements six times, while Biden stayed tight-lipped on the subject.

"Japan hopes to see the United States return to the (CP) TPP from a strategic perspective," Kishida said.

As a former diplomat, Kishida clearly had his own reasons to introduce this moment of awkwardness. Those reasons may well lie in the vague descriptions of the IPEF－big words like "nontraditional", but with scant detail about "benefits".

So-called four pillars

According to the White House, the IPEF contains four pillars: Improving the resilience of supply chains; boosting cooperation on digital trade; ramping up clean energy and infrastructure; and enhancing tax and anti-corruption efforts.

In a concession that helped bring to the table nations that were skeptical about the deal, Washington said that the IPEF members could choose how many of the four pillars they wanted to join. Surprising no one, Japan joined all four of them.

But as was made clear, the IPEF will not include any new access to the US market for products from Asian countries despite Japan's suggestion that it should do so. A number of countries in Southeast Asia have also joined the framework.

"That means the situation now is, what countries in Asia want is exactly what Biden cannot give," said Liu, adding that the US left the arrangement as "only a framework "to help blunt criticism that Biden's Indo-Pacific strategy is "all guns but no butter"－meaning his approach in the region has been too focused on security and lacks an economic component.

A poll conducted by Japan's Foreign Ministry showed that cooperation between China and Southeast Asian countries has become unshakable. The poll's findings show that China has replaced Japan to become the most important partner of the Association of Southeast Asian Nations, as viewed by the member nations. Some 48 percent of the respondents in Southeast Asia pick out China, among all the G20 members, as their "important partner in the future"; 43 percent chose Japan and 41 percent favored the US.

Given that China has remained ASEAN's largest trading partner for 13 consecutive years, with two-way trade hitting a high record in 2021 of $878.2 billion, Liu said the IPEF is working against trends for regional integration and efforts to build an Asia-Pacific community with a shared future.

As for Japan, there is no shortage of critics of the IPEF. The Asahi Shimbun commented: "It is unclear whether the IPEF will evolve into a significant initiative, given that its objectives do not include reduction of tariffs, unlike traditional free-trade pacts."

"For such countries", the newspaper said in referring to members of ASEAN, "joining the IPEF does not appear beneficial if they cannot gain expanded access to the US market".

Takakage Fujita, director-general of a civil society group dedicated to upholding and developing the 1955 Murayama Statement, said Biden created the IPEF to use Japan and ASEAN countries to contain China economically. "It should be win-win, not US-centric," Fujita said.

The Murayama Statement, released by former Japanese prime minister Tomiichi Murayama, advocates historical recognition and reconciliation with Asian countries by Japan.

Aside from economic reasons, others fear that the US' Indo-Pacific strategy, including the IPEF, will "incite confrontation and undermine peace".

During Biden's first trip to Japan as president, there were protests in Tokyo denouncing the Japan-US summit for further strengthening military integration with Washington and accelerating the pace of Japan's military expansion.

'Negative impact'

Shunkichi Takayama, a lawyer in Tokyo and one of the organizers of the event, said Biden's visit had "an immeasurably negative impact on the peace and stability of the region".

Outside Japan, politicians in signatory countries have been blunt in their criticism of the IPEF. Former Malaysian prime minister Mahathir Mohamad said the deal was aimed at isolating China. "The US will always want to use groupings like this in order to isolate China," Mahathir said at a conference in Tokyo.

In an open letter to the Financial Times, Airlangga Hartarto, Indonesia's coordinating minister for economic affairs, said greater access to the US market must be part of Biden's Indo-Pacific trade initiative. "I too call on the US to provide more details on this framework－and to have the US market added to the IPEF," the minister said.

That the US is inciting confrontation in the region is also clear in the statement following the meeting of leaders of the Quad grouping in Tokyo.

"China was the subtext in the statement," said Sourabh Gupta, a senior fellow at the Institute for China-America Studies in Washington.

Yifan Xu in Washington contributed to this story.