What to make of US initiative and 'Indo-Pacific Economic Framework'?

By Ahn Ho-young

The Chey Institute for Advanced Studies organized the first Trans-Pacific Dialogue in Northern Virginia, near Washington, D.C., Dec. 6-8. I decided to brave the 10-day post-trip quarantine on the way back in Korea to travel and participate in the dialogue, because I was very attracted by the list of participants from the U.S. and Japan, as well as the scope of the issues to be discussed at the dialogue.

Participants included a large number of current and former officials of the U.S., from the White House, the State Department, the Pentagon and the U.S. Trade Representative, as well as top-notch scholars including Joe Nye, John Mearsheimer and John Ikenberry. The participants included fewer but equally strong representatives from Korea and Japan.

The three-day dialogue covered all the critical issues in our region, ranging from U.S.-China relations, Indo-Pacific strategy, the North Korean nuclear issue, scientific innovation and its geopolitical/ geo-economic impact, to the future of global supply chains and sustainability. One issue that attracted my attention in particular was the new U.S. initiative, the "Indo-Pacific Economic Framework."

Both Kurt Campbell, the Asia coordinator at the National Security Council (NSC), and Edgard Kagan, the senior director for Asia at the NSC, spoke with fervent commitment about the importance of building economic architecture in the Indo-Pacific region and the central role the initiative is to play in the process. Their talks sparked my conversation with other U.S. participants and further thinking on the initiative.

I asked them about the background of the initiative. They talked about President Joe Biden's genuine commitment to the Indo-Pacific region and the importance of a region-wide economic initiative to go with the Indo-Pacific strategy. Returning to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is not an option for Biden, given the reluctance of both Democrats and Republicans to commit the U.S. to another preferential trade agreement.

At the same time, there is no shortage of other economic challenges in the region, ranging from China's unfair economic practices, the growing importance of digital trade, the sustainability of supply chains, inflation and other pandemic-induced economic issues as well as climate change. So far, there have been several issue-specific initiatives.

Now is deemed to be the appropriate time to go for a comprehensive process to engage a large number of like-minded regional countries in the region-wide economic initiative. Some of them also suggested that Gina Raimondo and her Department of Commerce are expected to play an important role in advancing the initiative, given that the scope of the initiative is not limited to trade issues.

Listening to these explanations on the background of the initiative, I was reminded about Biden's repeated mantra during the 2020 presidential campaign, which was "economic security is national security." At the time, I thought that his view on "economic security" was mostly focused on the domestic economy, strengthening the middle class and building back the U.S. economy better, which would eventually help strengthen national security.

The mantra seems to have evolved and been "internationalized" since then, through several junctures. The first juncture was Feb. 24, when President Biden issued an executive order on America's supply chains. Another juncture was June 8, when the White House followed up on the executive order and announced a 100-day review, which outlined steps to strengthen critical supply chains in the four sectors of medicine, advanced batteries, critical minerals and semiconductors.

Through these junctures, the U.S. made it clear that supply chain vulnerabilities are a serious challenge to U.S. economic security and that the U.S. intends to strengthen cooperation with its allies and partners, as well as industries from those countries.

The government and industries of Korea were closely engaged by the U.S. along the way. On April 12, the White House convened a virtual CEO summit on semiconductor and supply chain resilience, where a limited number of industries were invited. Among the overseas companies, only Samsung and Taiwan's TSMC were invited.

President Biden participated briefly in the meeting, where he held up a silicon wafer and declared, "This is infrastructure." On May 12, Moon was the second foreign leader to meet with Biden in person. The joint statement between the two presidents included commitment to expanding economic cooperation in wide-ranging areas, including commitment to increase resiliency in the supply chains.

In the less than a year of Biden's presidency so far, his mantra on "economic security" has turned out to be one of the most critical challenges not only for the U.S. but for all countries in the Indo-Pacific. New Japanese Prime Minister Fumio Kishida's appointment of an economic security minister, a new cabinet post, attracted much attention. The Korean government also established the Economic Security Center at the Ministry of Foreign Affairs. These moves are timely and welcome signs that the region's countries recognize the importance of responding to the new challenges of the region with a sense of urgency.

In order to strengthen economic security, it has thus became common sense that we must enhance the sustainability of supply chains. At the same time, there are other important issues, including ICT, digital trade, pandemic-induced economic issues and climate change. Given the transnational nature of these issues, the region's countries can do far better through strengthening cooperation among them. That is why I think we must heed the new U.S. initiative, the "Indo-Pacific Economic Framework."

Ahn Ho-young (hyahn78@mofa.or.kr) is the president of the University of North Korean Studies. He served as the Korean ambassador to the United States and the first vice foreign minister.