Thursday, 27 January, 2022
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US eyes ‘powerful’ Asia economic deal in 2022

US eyes ‘powerful’ Asia economic deal in 2022

WASHINGTON: The Biden administration aims to sign what could prove a “very powerful” economic framework agreement with Asian nations - focusing on areas including coordination on supply chains, export controls and standards for artificial intelligence - next year, Commerce Secretary Gina Raimondo said.

“It’s a priority for the president,” Raimondo, speaking in a roundtable discussion on Thursday at Bloomberg headquarters in New York, said of deepening US engagement with Asia. “America didn’t show up in that region for four years,” she said, alluding to the Trump administration’s record, report agencies.

Raimondo said that her trip to Asia last month was designed to “assess appetite” for economic dialog, under the condition that President Joe Biden’s team isn’t planning to take up traditional trade talks. She underscored that rejoining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership “as presented” is off the table.

“The demand for US presence and the demand for US reengagement was off the charts,” said Raimondo, who stopped in Singapore, Malaysia and Japan last month. What the administration envisions is a “new kind of economic framework for a new economy,” and the hope is to, “early in the new year, first quarter of next year, officially launch a process,” she said.

The framework will be “flexible,” with some countries perhaps not signing up to all of the elements, Raimondo said.

She said the aim is to engage not just developed nations such as Japan, Singapore, Australia and New Zealand but also emerging economies such as Malaysia, Vietnam and Thailand.

“I would love 12 months from now to be coming back here with something signed saying we’ve made progress,” the Commerce chief said. She said the agreement may not “culminate” in something that would require approval by the US Congress - which is needed for traditional trade agreements.

“It won’t be a trade deal, but it could be very powerful.”

Supply chains for critical goods including semiconductors are a particular focus, Raimondo said. The goal is “robust, long-term collaborations around supply chains” that addresses what has been a lack of coordination among producers and users, she said.

On the domestic US front, Raimondo cited the benefit of the government convening “stakeholders” at the same table to increase transparency and trust around supply chains.

The Democratic former governor of Rhode Island also said that she could see some non-American companies benefiting from the US$54 billion of emergency appropriations to help bring semiconductor manufacturing back to the US that Congress is now debating. The key is that the production is done in the US, she said.

“It is a problem for America that we are so reliant on Taiwan” for semiconductors today, Raimondo said. Another element of the Asia economic framework is working to harmonize export controls to limit sensitive products that head to China “and other autocratic regimes,” Raimondo said.