In South Korea, Biden seeks to rebuild economic ties across Asia

When President Joe Biden arrived on his inaugural mission to Asia on Friday, the first place he flew to wasn’t a government hall, an embassy or even a military base, but a sprawling superconductor factory that represented the true battlefield of the 21st century. The struggle for influence in the region.

Choosing the destination to begin a five-day trip to South Korea and Japan has highlighted challenges to Biden’s efforts to rebuild U.S. relations in the region as longtime allies become uncertain about Washington’s commitments amid anti-trade sentiment at home, while China expands. its dominance in the economic arena.

The president hopes to lure countries back into the US orbit despite the decision of his predecessor, President Donald Trump, five years ago to abandon a far-reaching trade agreement known as the Trans-Pacific Partnership — but not by joining the economic bloc, even though The Obama administration negotiated that he served as vice president. Instead, under pressure from his liberal base at home, Biden plans to introduce a much less inclusive multinational economic architecture that some in the region question what to add to it.

Biden will formally unveil the Indo-Pacific Economic Framework Monday in Tokyo, bringing together many of the same countries from the trade partnership to coordinate policies on energy, supply chains and other issues, but without the market access or tariff cuts that underpinned the original version. partnership. Eager for US leadership to confront China, a number of countries in the region plan to sign up and applaud the new deal, but privately expressed concern that it might be an empty exercise.

Scott A. said: Snyder, director of US-Korea policy at the Council on Foreign Relations, said the framework is essentially “a new package of the current Biden administration’s priorities in this area of ​​economic policy.” “And whether or not it really takes off depends on whether the partners think there’s enough out there to justify the engagement.”

Snyder added that he believes South Korea, on the other hand, is taking seriously the Biden administration’s commitment to investing in the region. “I think they believe,” he said. “And we’ll see if they whistle by the cemetery.”

But even Biden’s ambassador to Japan, Rahm Emanuel, acknowledged the region’s uncertainty about the new economic framework. Countries want to know, “What are we signing up for?” He told reporters in Tokyo on Thursday. Is this an alternative to the TPP? He said, “Yes and no.”

The framework is not a traditional free trade agreement, but rather a negotiating structure to address four key areas: supply chains, the digital economy, clean energy transition, and infrastructure investments. That would be a “big deal” and an “important milestone” for relations with the region, said Jake Sullivan, the president’s national security adviser.

“When you hear some of, ‘Well, we don’t quite know. We’re not sure because it doesn’t seem like things have looked before,” I say, ‘Just wait,’ he told reporters aboard Air Force One as it made its way across the Pacific Ocean. and supply chains for the twenty-first century.

Sullivan said there will be a “large list of states” that will join the framework when Biden takes effect on Monday, but administration officials did not specify which states. Japan, which has indicated that it favors the United States’ return to the TPP, will nonetheless embrace that new framework as the best it can get at the moment, as will South Korea. Singapore, Thailand and the Philippines have expressed interest in joining, while India and Indonesia have expressed some reservations.

Vietnamese Prime Minister Pham Minh Chin said this month that it remains unclear what the new framework will mean in concrete terms. “We are ready to work alongside the United States to discuss and clarify what these pillars entail,” he said at a forum held by the Center for Strategic and International Studies.

Biden’s visit to Samsung’s semiconductor facility as he stepped off Air Force One was a reminder of how important the region is to his immediate priority of resolving the supply chain problems that have hurt American consumers back home.

Shortly after landing at Osan Air Force Base, Biden joined South Korean President Yoon Seok-yeol at the factory, hailing it as a model for the kind of manufacturing the United States desperately needs to head off high inflation and rival China’s growing economy. dominance.

“This is an auspicious start to my visit, as it is a symbol of the future cooperation and innovation that our countries can build together,” Biden said, noting that Samsung will invest $17 billion to build a similar plant in Taylor, Texas.

“Our country is working together to produce the best and most advanced technology in the world,” Biden added, surrounded by screens showing Samsung employees listening to his remarks. “This plant is proof of that, and it gives both the Republic of Korea and the United States a competitive advantage in the global economy if we can keep our supply chains flexible, reliable and secure.”

While demand for semiconductor-containing products increased 17% from 2019 to 2021, there was no similar increase in supply, in part due to pandemic-related disruptions. As a result, car prices have skyrocketed, and the need for more chips is likely to increase as 5G technology and electric cars spread.

The US already faces an “alarming” shortage of semiconductors, Biden’s Commerce Secretary Gina Raimondo warned this year, adding that the crisis contributed to the highest inflation in nearly 40 years.

Rising consumer prices helped lower approval ratings for Biden, who has taken advantage of global supply chain problems to urge Congress to pass proposed legislation that would provide $52 billion in grants and subsidies to semiconductor makers and $45 billion in grants and loans. To support the resilience of the US supply chain and manufacturing.

Samsung’s station was just one attempt to encourage Asian allies to invest in the United States. On Sunday, Biden will join Hyundai’s chairman to celebrate the South Korean company’s decision to invest in a facility to manufacture new electric vehicles and batteries in Savannah, Georgia.

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