The upcoming 2024 election is set to influence the future of Indo-Pacific economic cooperation. However, irrespective of the election's outcome, the U.S. should persist in enhancing its potential for economic relationships within the region, states the Peterson Institute for International Economics (PIIE).
According to PIIE, there are two potential outcomes from the 2024 election. One possibility is a U.S. government that promotes increased coordination of economic policies in the Indo-Pacific, utilizing the Indo-Pacific Economic Framework (IPEF) as a foundation. Alternatively, there could be a shift towards a more inward-focused America that lacks an international cooperative vision and dismisses initial progress made.
The U.S. Department of Commerce reveals that the IPEF was initiated by the U.S. in May 2022 and included a dozen initial partners across the Indo-Pacific region. This initiative mirrors President Biden's efforts to bolster relationships with allies and partners while addressing 21st-century economic challenges in this region.
PIIE asserts that while IPEF is still a work in progress with both positive and negative aspects, it holds promise for future developments. At the recent Asia-Pacific Economic Cooperation (APEC) Summit, however, the U.S. opted for "policy space" without commitments—a move that could potentially harm business interests. The Biden Administration has been opposed to trade liberalization and commitments requiring Congressional approval which, coupled with ongoing partnerships and agreements from other countries and a surge in digital trade within the region, has left American firms at a disadvantage.
Despite its market limitations, PIIE points out that IPEF has devised innovative strategies to tackle new challenges faced by global trading systems. For instance, they cite how IPEF’s Supply Chain Agreement—set to be one of its first active modules—could help counter China's control over graphite exports and encourage supply chain mapping along with alternative technology development.
Regardless of who wins the Presidential election next year, PIIE argues that regional countries should determine their own economic future. Middle powers such as Japan, Korea, Singapore, and Australia are urged to continue cooperating with the economic goals of IPEF. Collaboration among IPEF partners is essential to mitigate supply chain risks, promote eco-friendly investments, and integrate clean technologies. Even if the U.S. temporarily withdraws from these efforts, PIIE maintains that ongoing initiatives should continue in anticipation of a potential U.S. re-entry in the future.
As stated on its website, PIIE is an independent research organization with a focus on global economics. Originally known as the Institute for International Economics, it was established in 1981 and employs approximately 75 staff members—two-thirds of whom are senior researchers specializing in economies such as Brazil, China, the European Union, Japan, Korea, and the Middle East. Their expertise also extends to North America including the U.S., Canada and Mexico.
