When President Joe Biden arrived on his inaugural mission to Asia on Friday, the first place he headed from the airplane was not a government hall or embassy or even a military base, but a sprawling superconductor factory that represented the real battleground of a 21st-century struggle for influence in the region.
The choice of destination to begin a five-day trip to South Korea and Japan underscored the challenges of Biden’s effort to rebuild US ties to a region where longtime allies have grown uncertain about Washington’s commitments amid anti-trade sentiment at home, while China has expanded its dominance in the economic arena.
The president hopes to lure countries back into the US orbit despite the decision by his predecessor, President Donald Trump, five years ago to abandon a far-reaching trade pact known as the Trans-Pacific Partnership — but not by rejoining the economic bloc, even though it was negotiated by the Obama administration that he served as vice president. Instead, under pressure from his liberal base at home, Biden plans to offer a far less sweeping multinational economic structure that has some in the region skeptical about what it will add up to.
Biden will formally unveil the Indo-Pacific Economic Framework on 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 reductions that powered the original partnership. Eager for US leadership to counter China, a number of countries in the region plan to sign up and hail the new alignment but privately have expressed concern that it may be an empty exercise.
The framework is essentially “a new packaging of existing Biden administration priorities in this economic policy area,” said Scott A. Snyder, director of US-Korea policy at the Council on Foreign Relations. “And whether or not it really takes off depends on whether partners believe that there’s enough there to justify being engaged.”
Snyder added that he thought South Korea, for one, was taking seriously the Biden administration’s commitment to invest in the region. “I think they’re believing,” he said. “And we’ll see whether they’re whistling past the graveyard.”
But even Biden’s own ambassador to Japan, Rahm Emanuel, acknowledged the uncertainty in the region over the new economic framework. Countries want to know, “What is it we are signing up for?” he told reporters in Tokyo on Thursday. Is this an alternative to the Trans-Pacific Partnership? “Yes and no,” he said.
The framework is not a traditional free trade agreement but rather an architecture for negotiation to address four major areas: supply chains, the digital economy, clean energy transformation and investments in infrastructure. Jake Sullivan, the president’s national security adviser, said it would be “a big deal” and a “significant milestone” for relations with the region.
“When you hear some of the, ‘Well, we don’t quite know. We’re not sure because it doesn’t look like things have looked before, ‘I say, ‘Just you wait,’ ‘ he told reporters on Air Force One as it made its way across the Pacific. “Because I think this is going to be the new model of economic arrangement that will set the terms and rules of the road for trade and technology and supply chains for the 21st century.”
Sullivan said there will be “a significant roster of countries” joining the framework when Biden kicks it off Monday, but administration officials have not identified which countries. Japan, which has signaled it would rather the United States rejoin the Trans-Pacific Partnership, will nonetheless embrace the new framework as the best it can get at the moment, as South Korea will. Singapore, Thailand and the Philippines have indicated interest in joining, while India and Indonesia have expressed some reservations.
Prime Minister Pham Minh Chinh of Vietnam said this month that it was still not clear what the new framework would mean in concrete terms. “We are ready to work alongside the US to discuss, to further clarify what these pillars entail,” he said at a forum held by the Center for Strategic and International Studies.
Biden’s visit to the Samsung semiconductor facility immediately after disembarking from Air Force One served as a reminder of how critical the region is to his immediate priority of unsnarling the supply-chain problems that have hurt American consumers back home.
Shortly after landing at Osan Air Base, Biden joined President Yoon Suk-yeol of South Korea at the plant, praising it as a model for the type of manufacturing that the United States desperately needs to head off soaring inflation and to compete with China’s growing economic dominance.
“This is an auspicious start to my visit, because it’s emblematic of the future cooperation and innovation that our nations can and must build together,” Biden said, noting that Samsung will invest $17 billion to build a similar plant in Taylor, Texas.
“Our two nations work together to make the best, most advanced technology in the world,” Biden added, surrounded by monitors showing Samsung employees listening to his remarks. “And this factory is proof of that, and that gives both the Republic of Korea and the United States a competitive edge in the global economy if we can keep our supply chains resilient, reliable and secure.”
While demand for products containing semiconductors increased 17% from 2019 to 2021, there has not been a comparable increase in supply, partly because of pandemic-related disruptions. As a result, automobile prices have skyrocketed, and the need for more chips is likely to increase as 5G technology and electric vehicles become more widespread.
The United States already faces an “alarming” shortage of the semiconductors, Gina Raimondo, Biden’s commerce secretary, warned this year, adding that the crisis had contributed to the highest level of inflation in roughly 40 years.
The soaring consumer prices have helped to drive down approval ratings for Biden, who has seized on global supply-chain problems to urge Congress to pass proposed legislation that would provide $52 billion in grants and subsides for semiconductor-makers and $45 billion in grants and loans to support supply-chain resilience and American manufacturing.
The Samsung stop was just one effort to encourage Asian allies to invest in the United States. On Sunday, Biden will join the chairman of Hyundai to celebrate the South Korean company’s decision to invest in a new electric vehicle and battery manufacturing facility in Savannah, Georgia.