TOKYO, May 23 (AP): President Joe Biden on Monday launched a new trade deal with 12 Indo-Pacific nations aimed at strengthening their economies as he warned Americans worried about high inflation that it was “going to be a haul” before they feel relief. The president said he does not believe an economic recession is inevitable in the US.
Biden, speaking at a news conference after holding talks with Japan’s Prime Minister Fumio Kishida, acknowledged the US economy has “problems” but said they were “less consequential than the rest of the world has.”
He added: “This is going to be a haul. This is going to take some time,” even as he rejected the idea a recession in the US was inevitable.
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The comments came just before Biden’s launch of the Indo-Pacific Economic Framework, a new trade deal his administration designed to signal US dedication to the contested economic sphere and to address the need for stability in commerce after disruptions caused by the pandemic and Russia’s invasion of Ukraine.
Nations joining the US in the Indo-Pacific Economic Framework are Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam. Along with the United States, they represent 40% of world GDP.
The countries said in a joint statement that the pact will help them collectively “prepare our economies for the future” following disruptions caused by the coronavirus pandemic and the Russian invasion of Ukraine.
Biden and Kishida were joined by Prime Minister Narendra Modi while representatives from the other countries appeared by video to help launch the pact. Modi was in Tokyo for Tuesday’s meeting of the Quad, a security grouping that also includes the US, Japan and Australia.
The White House said the framework will help the United States and Asian economies work more closely on issues including supply chains, digital trade, clean energy, worker protections and anticorruption efforts. The details still need to be negotiated among the member countries, making it difficult for the administration to say how this agreement would fulfill the promise of helping US workers and businesses while also meeting global needs.
Critics say the framework has gaping shortcomings. It doesn’t offer incentives to prospective partners by lowering tariffs or provide signatories with greater access to US markets. Those limitations may not make the US framework an attractive alternative to the Trans-Pacific Partnership, which still moved forward after the US bailed out. China, the largest trading partner for many in the region, is also seeking to join TPP.
“I think a lot of partners are going to look at that list and say: That’s a good list of issues. I’m happy to be involved,’” said Matthew Goodman, a former director for international economics on the National Security Council during President Barack Obama’s administration. But he said they also may ask, “Are we going to get any tangible benefits out of participating in this framework?”
Kishida hosted a formal state welcome for Biden at Akasaka Palace, including a white-clad military honour guard and band in the front plaza. Reviewing the assembled troops, Biden placed his hand over his heart as he passed the American flag and bowed slightly as he passed the Japanese standard.
Kishida said at their meeting that he was “absolutely delighted” to welcome Biden to Tokyo on the first Asia trip of his presidency. Along with Biden, he drove a tough line against Russia over its invasion of Ukraine, saying it “undermines the foundation of global order.”
Biden, who is in the midst of a five-day visit to South Korea and Japan, called the US-Japanese alliance a “cornerstone of peace and prosperity in the Indo-Pacific” and thanked Japan for its “strong leadership” in standing up to Russia.
The White House announced plans to build the economic framework in October as a replacement for the Trans-Pacific Partnership, which the US dropped out of in 2017 under then-President Donald Trump.
Kishida, while welcoming the new Biden trade pact, said he hoped Biden would reconsider the United States’ position on TPP.
