Sec. 121. Findings on regional economic order
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Congress makes the following findings: The United States played a leadership role in constructing the architecture, rules, and norms governing the international economic order following the Second World War, yielding decades of domestic economic and geopolitical prosperity and stability. In 2017, the United States withdrew from the Trans-Pacific Partnership (TPP), an economic pact that was negotiated by 12 countries that covered 40 percent of the world economy, leading the 11 remaining Asia-Pacific countries to sign the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) the following year, setting high-standard rules for regional economic engagement.
In 2020, the 10 countries of the Association of Southeast Asian Nations along with South Korea, China, Japan, Australia, and New Zealand signed the Regional Comprehensive Economic Partnership (RCEP), the world’s biggest trade deal in terms of GDP. Reduced United States economic engagement has led United States allies and partners to question the United States’ commitment to the Indo-Pacific region. Despite its distortive and unfair trade practices, the People’s Republic of China is taking advantage of this vacuum by deepening its partnerships in the region and promoting its own state-led economic model.
The United States is increasingly on the outside looking in with regards to economic pacts in the Indo-Pacific. United States absence from these agreements puts it at both a strategic and competitive disadvantage in the region and allows competitors to expand their economic influence at the United States’ expense. Given that these partnerships and agreements will define the rules and norms that will govern regional commerce over the coming decades, the United States is currently not well positioned to shape the coming economic landscape.
It is in the United States’ vital interest to upgrade its economic engagement and leadership in the Indo-Pacific and develop concrete steps to strengthen its commercial diplomacy to fully participle in the region’s economic dynamism.