9DASHLINE — Crafting a durable US Indo-Pacific Economic Framework requires two-way buy-in
WRITTEN BY STEPHEN NAGY – 24 February 2022
Immediate geographic stakeholders in the Indo-Pacific prioritise trade, even with challenging neighbours, such as China. As a consequence, they pursue a non-zero-sum approach in their engagement within the region. Evidence of this approach can be seen in the policies pursued by Australia, Japan, and South Korea.
All have suffered from various forms of economic coercion from China in recent years, but they still signed the ASEAN-centred Regional Comprehensive Economic Partnership (RCEP), which came into force on 1 January 2022 and includes China. We also see the current members of the Comprehensive and Progressive Transpacific Partnership (CPTPP) continue to try and expand the agreement by including the UK, Taiwan, China, and South Korea, all of whom have applied to join the agreement.
What does this say about Indo-Pacific stakeholders? First, they prioritise trade as the foundation for their prosperity and engagement within the region. Second, they take an uninhibited approach to trade. Both Australia and Japan have joined the RCEP that includes China, but they were also key partners in forging the CPTPP, which excludes China at this stage. Third, Indo-Pacific stakeholders all prioritise development, trade, infrastructure and connectivity, and engagement with China while at the same time creating deterrence capabilities through strategic partnerships.
A purely market-based approach to trade clearly will not get buy-in within the region. Nor will a trade policy that is highly securitised and prejudices China in various ways.
The recent Reciprocal Access Agreement (RAA) between Japan and Australia, the continued strengthening of the US-Japan alliance, as well as bringing in extra-regional partners like the EU into agreements — such as with the Japan-EU Economic Partnership Agreement (EPA) and the Japan-EU Asian Connectivity Initiative — speaks to the multi-layered and multilateral approach many Indo-Pacific states are pursuing to deal with China.
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Author biography
Dr. Stephen Nagy is a senior associate professor at the International Christian University in Tokyo, a fellow at the Canadian Global Affairs Institute (CGAI); a senior fellow at the MacDonald Laurier Institute; a senior fellow at the East Asia Security Center (EASC); and a visiting fellow with the Japan Institute for International Affairs (JIIA). Image credit: Flickr/Pippa Fowles/No. 10 Downing Street.
