By: Azhar Azam
Pakistan, once a major non-NATO ally, has doled out great sacrifices in the US global war on terror. Albeit unprecedented political, economic and human sufferings of the Pakistani people and security forces to make the super power much more secure and immune to terror attacks, Washington brushed aside Islamabad’s invaluable contributions to embrace New Delhi for a larger game in the wider expanse.
The whiplash policymakers in the US abandoned Pakistan and pinned hopes on India to help recoup its strategic influence in the Indo-Pacific. Notwithstanding Washington’s years-long soft-soap approach to appease New Delhi, the South Asian country has never shied away from bringing an embarrassment to Washington. India bypassed the US sanctions to purchase S-400 missile defense systems and oil from Russia, ditching America internationally.
After the maiden in-person meeting of the Indo-Pacific Economic Framework (IPEF), India, a cornerstone of the US President Joe Biden’s Indo-Pacific strategy and the Quad frontline state, once again hoodwinked America by pulling out from the ministerial statement on the topmost pillar of the framework, trade, over environment and labor discrimination.
Originally announced during Biden's trip to Japan in May, the pan-Asian deal doesn’t cut tariffs or give greater market access to participating countries. Given these two elements form the foundation of any multilateral economic cooperation, the initiative was largely an attempt to demonstrate solidarity of the grouping; still, New Delhi didn’t miss the opportunity to stigmatize the US on a global stage.
Biden’s roster encompassed initiating environment, labor and other standards in Asia through the IPEF. Yet India blew up all the “high-standard provisions” to promote a sustainable and inclusive economic growth in a jiffy. As a result, ambiguity looms over New Delhi’s commitment to the US, which seeks the initiative as a “durable model” for the other countries in the world.
The framework isn’t a free trade agreement (FTA) either like the avant-garde Regional Comprehensive Economic Agreement (RCEP), which covers 2.3 billion population and $26.3 trillion GDP in trade, investment and economic and technical cooperation in addition to crafting new rules for e-commerce and intellectual property. India withdrew at the last gasp from the RCEP; it is still the world’s largest FTA.
America has been giving a cold shoulder to economic ambitions of the countries in the region by prioritizing the US strategic interests. The new US Indo-Pacific strategy explicitly states its “considered but rejected” idea of scaling back military presence over the region's strategic importance in the 21st century.
After Donald Trump in 2017 dialed back the US proclivity for the region’s economy and retreated from the Trans Pacific Partnership, Biden sustains his predecessor’s aloof legacy and doesn’t lay out a definite plan for regional peace and prosperity. This is where the IPEF sounds an alarm for other Indo-Pacific states about regional security.
Overlapping interests on supply chains among the member states further obscure the success of the IPEF. South Korea wants to establish itself as a rule maker within the framework; the Biden administration’s Inflation Reduction Act is threatening multilateralism and Seoul’s economic aspirations by providing tax credits to electric vehicles (EVs) assembled in North America.
The legislation not only puts leading Korean EV giants in the US at disadvantage, it also pushes them in a spiraling supply chain crisis as the manufacturers will be required to source at least 40% in 2023 to 80% in 2029 of the EV battery components from North America or countries having a free trade agreement with the US. The Korean parliament earlier this month passed a resolution to express concerns on the new rules.
Even as the scheme is aimed at lessening reliance on China and asserts to create millions of American manufacturing jobs, the plan may hit the snag if it excludes China where almost 70% of the announced EV battery production capacity is projected to be concentrated by 2030. There is another catch: the supply chain required for this credit doesn’t exist in the US. Japan and the European Union also have conveyed strong resentments to the US for its prejudice toward its own allies, believing the restrictions may violate the World Trade Organization’s rules and international law.
The Association of Southeast Asian Nations (ASEAN) view, the Indo-Pacific was developing into an arena of great power contestation between China and the US under Trump, raised concerns among the American partners about the country’s ability to deter China in the eventuality of a conflict on the regional flashpoints such as Taiwan and the South China Sea.
While bloc’s internal division into the US and China camps casts doubt on the success of the US Indo-Pacific strategy, “an all-pain, no-gain” initiative runs the risk of a lukewarm response from the ASEAN. The IPEF may draw a little appeal from the 10-member alliance for it emphatically dismisses any negotiations on tariffs and market access as well as tends to obstruct the ongoing development plans and impinge on the ASEAN centrality.
Most significantly, the IPEF meeting didn’t produce a formal agreement. It was rather a ceremonial gathering to showcase the equivocal US commitment to the Indo-Pacific and reaffirm Biden’s position on keeping tariffs and trade and investment barriers. Thanks to India's mine-laying, neither the summit drove the US interests nor did it show transpacific unity. In duw course, America’s quest to find an ally like Pakistan continues.
The whiplash policymakers in the US abandoned Pakistan and pinned hopes on India to help recoup its strategic influence in the Indo-Pacific. Notwithstanding Washington’s years-long soft-soap approach to appease New Delhi, the South Asian country has never shied away from bringing an embarrassment to Washington. India bypassed the US sanctions to purchase S-400 missile defense systems and oil from Russia, ditching America internationally.
After the maiden in-person meeting of the Indo-Pacific Economic Framework (IPEF), India, a cornerstone of the US President Joe Biden’s Indo-Pacific strategy and the Quad frontline state, once again hoodwinked America by pulling out from the ministerial statement on the topmost pillar of the framework, trade, over environment and labor discrimination.
Originally announced during Biden's trip to Japan in May, the pan-Asian deal doesn’t cut tariffs or give greater market access to participating countries. Given these two elements form the foundation of any multilateral economic cooperation, the initiative was largely an attempt to demonstrate solidarity of the grouping; still, New Delhi didn’t miss the opportunity to stigmatize the US on a global stage.
Biden’s roster encompassed initiating environment, labor and other standards in Asia through the IPEF. Yet India blew up all the “high-standard provisions” to promote a sustainable and inclusive economic growth in a jiffy. As a result, ambiguity looms over New Delhi’s commitment to the US, which seeks the initiative as a “durable model” for the other countries in the world.
The framework isn’t a free trade agreement (FTA) either like the avant-garde Regional Comprehensive Economic Agreement (RCEP), which covers 2.3 billion population and $26.3 trillion GDP in trade, investment and economic and technical cooperation in addition to crafting new rules for e-commerce and intellectual property. India withdrew at the last gasp from the RCEP; it is still the world’s largest FTA.
America has been giving a cold shoulder to economic ambitions of the countries in the region by prioritizing the US strategic interests. The new US Indo-Pacific strategy explicitly states its “considered but rejected” idea of scaling back military presence over the region's strategic importance in the 21st century.
After Donald Trump in 2017 dialed back the US proclivity for the region’s economy and retreated from the Trans Pacific Partnership, Biden sustains his predecessor’s aloof legacy and doesn’t lay out a definite plan for regional peace and prosperity. This is where the IPEF sounds an alarm for other Indo-Pacific states about regional security.
Overlapping interests on supply chains among the member states further obscure the success of the IPEF. South Korea wants to establish itself as a rule maker within the framework; the Biden administration’s Inflation Reduction Act is threatening multilateralism and Seoul’s economic aspirations by providing tax credits to electric vehicles (EVs) assembled in North America.
The legislation not only puts leading Korean EV giants in the US at disadvantage, it also pushes them in a spiraling supply chain crisis as the manufacturers will be required to source at least 40% in 2023 to 80% in 2029 of the EV battery components from North America or countries having a free trade agreement with the US. The Korean parliament earlier this month passed a resolution to express concerns on the new rules.
Even as the scheme is aimed at lessening reliance on China and asserts to create millions of American manufacturing jobs, the plan may hit the snag if it excludes China where almost 70% of the announced EV battery production capacity is projected to be concentrated by 2030. There is another catch: the supply chain required for this credit doesn’t exist in the US. Japan and the European Union also have conveyed strong resentments to the US for its prejudice toward its own allies, believing the restrictions may violate the World Trade Organization’s rules and international law.
The Association of Southeast Asian Nations (ASEAN) view, the Indo-Pacific was developing into an arena of great power contestation between China and the US under Trump, raised concerns among the American partners about the country’s ability to deter China in the eventuality of a conflict on the regional flashpoints such as Taiwan and the South China Sea.
While bloc’s internal division into the US and China camps casts doubt on the success of the US Indo-Pacific strategy, “an all-pain, no-gain” initiative runs the risk of a lukewarm response from the ASEAN. The IPEF may draw a little appeal from the 10-member alliance for it emphatically dismisses any negotiations on tariffs and market access as well as tends to obstruct the ongoing development plans and impinge on the ASEAN centrality.
Most significantly, the IPEF meeting didn’t produce a formal agreement. It was rather a ceremonial gathering to showcase the equivocal US commitment to the Indo-Pacific and reaffirm Biden’s position on keeping tariffs and trade and investment barriers. Thanks to India's mine-laying, neither the summit drove the US interests nor did it show transpacific unity. In duw course, America’s quest to find an ally like Pakistan continues.
*This is an unedited version of my article that also appeared in The New Straits Times and The Express Tribune.