In a speech hosted by the Asia Society, Secretary of the Treasury Janet L. Yellen outlined the Biden Administration’s economic approach towards the Indo-Pacific. Yellen began by emphasizing the significance of the Indo-Pacific region in the 21st-century global economy, with half of the world’s population and two-thirds of global growth emanating from this area.
Yellen highlighted three key priorities that are shaping the administration’s economic strategy for the region:
1. Increasing Trade and Investment: The administration is committed to expanding trade and investment with Indo-Pacific countries. Trade between the United States and the Indo-Pacific region reached $2.28 trillion in 2022, with significant growth since 2019. Trade in computers and electronic goods exceeded $435 billion in 2022. The goal is to create a level-playing field for American workers and businesses while protecting national security interests.
2. Bolstering Economic Resilience: The disruptions caused by the COVID-19 pandemic revealed vulnerabilities in global supply chains. The administration aims to diversify supply chains through an approach called “friendshoring” and strengthen economic resilience. This strategy includes multilateral engagements to monitor and respond to supply chain disruptions.
3. Cooperation on Global Challenges: The Indo-Pacific region is highly vulnerable to climate change, and addressing global challenges is essential. The administration is collaborating with Indo-Pacific countries to tackle climate change and other global issues.
Secretary Yellen emphasized the importance of multilateral engagements, including the Quad (Australia, India, Japan, and the United States), ASEAN, and the Pacific Islands Forum. The United States is hosting APEC Economic Leaders’ Week later this month and has launched the Indo-Pacific Economic Framework for Prosperity (IPEF) with 13 other countries. The IPEF aims to create new rules for the 21st-century economy.
In terms of bilateral engagements, Yellen highlighted key partnerships, including those with South Korea, Japan, Vietnam, and India. She discussed the United States’ approach to its economic relationship with China, focusing on securing national security interests, advancing human rights, and fostering a healthy economic relationship. Yellen stressed the importance of deep and durable communication with Chinese counterparts to prevent misunderstandings.