This is an editorial from China Daily.
The ministerial meeting of the "Indo-Pacific" Economic Framework for Prosperity that concluded in Detroit, Michigan, last week only produced a pact on the supply chains of key materials and products.
Launched in May last year, the 14-member IPEF plans to produce agreements in four areas: trade, supply chains, the green economy and a "fair" economy. The limited fruits of the meeting speak volumes about the concern of the other members. They are clearheaded on the nature of the IPEF being a geopolitical tool of the Joe Biden administration, which is seeking to isolate China in the region. They are wary of the harm that will be done to the world trade system through the IPEF, which is nothing more than a means to imprint the legacy stamp of "America first" on the region.
The supply chain pact, as Foreign Ministry spokesperson Mao Ning said, is "discriminatory" and "exclusive", which ruins the open and inclusive foundation on which the Asia-Pacific region has achieved its economic success. The pact is being carried out with the objective of excluding China from the regional supply chain network, and reforming that network with the US as the new hub.
However, even the participants are well aware that the IPEF does not include the US opening its market wider to member countries through trade policies such as lowering tariffs.
The IPEF is not trade liberalization. That explains why after being formed a year ago, the IPEF remains largely a talking shop. The US' attitude toward the IPEF is based on domestic politics and the need for "competition" with China, rather than its common interests with the participants.
The Biden administration just inherited the "America first" line from the previous administration, but it is trying to create a new world economic order to that effect through the higher labor, environmental protection, safety and other standards.
In this way it hopes to weaken the competitive cost advantages of developing countries in manufacturing sectors.
The IPEF, with its strong geopolitical and ideological attributes, goes against the law of the market, and its value and sustainability are questionable. India announced last year that it was pulling out of the talks on trade, because it saw no benefit to be gained.
The formation and development of the global industry and supply chains are the results of the combined action of market law and enterprise choice. And the problems incurred in that process can be corrected by adjusting some policies, rather than tearing down the entire globalization system to satisfy one country's interests. Promoting free trade does not conflict with strengthening labor, environmental and security goals.