The Kingdom has everything to gain from IPEF

News of Thailand’s participation in US President Joe Biden’s Indo-Pacific Economic Framework (IPEF) has caused a stir in the kingdom, with some members of the public protesting a move seen as putting the country at odds with China and Russia .

This move was even criticized by former finance minister Thirachai Phuvanatnarubala as showing “a clear intention [to go] against a rival country.

While quiet questions should be heard, the kingdom stands to gain from the talks and should be more than able to maintain a balance in its relations with China and the United States.

IPEF is becoming a new lexicon in international relations and geopolitics.

President Biden introduced IPEF during his visit to the region on May 23. It was part of a long-awaited strategy focused on this part of the world.

After the failure to ratify the Trans-Pacific Partnership (TPP) in 2017, the United States is “pivoting again to Asia” with a dozen initial partners: Australia, Brunei, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand Zealand, Philippines, Singapore, Thailand and Vietnam. Together, the whole represents 40% of the world’s GDP.

The IPEF talks will promote economic security and sustainable development in the Indo-Pacific region, with a focus on trade, supply chain, clean energy, carbon dioxide reduction, infrastructure , taxation and the fight against corruption.

But the plan is also seen as running counter to China’s aspirations for the region, especially after China’s omission. On Wednesday, Beijing called it divisive. When Fiji announced it would become the 14th member of IPEF the next day, China said Asia-Pacific “should not become a political game”, referring to the United States.

To be clear, the IPEF is not a binding trade agreement. Critics saw the initiative as a symbolic gesture in which the United States tries to save face and re-engage with countries in the region after former US President Donald Trump pulled out of the TPP. This signifies the willingness of countries to strengthen economic ties with each other, rather than forming a full-fledged trade agreement like the TPP or its successor, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

As countries in the region look for ways to recover from the economic impact of the coronavirus pandemic, IPEF presents a way to potentially improve the financial situation of participants.

Several ASEAN countries that expressed interest in joining the TPP before it collapsed – such as Thailand, Indonesia and the Philippines – are now IPEF participants.

Thailand, in particular, wants to leverage IPEF to boost its agricultural trade, while other Asian partners want access to the US market without excessive trade barriers, and IPEF – despite its lack of formal agreements – could lead to dialogue and negotiation in the future.

Despite its non-mandatory nature, the government must nevertheless exercise caution. When the kingdom expressed interest in the CPTPP last year, it faced a campaign calling on the prime minister to reconsider.

To counter this, the government must be transparent and inform the public of its plans, if it hopes to gain support. That said, any trade deal or alliance that Thailand wishes to join must be considered first. Parliamentary approval would be required before the government could take such an important decision, especially on international policy with legally binding effects.

Yet despite the concerns raised, Thailand should not be afraid to join the economic talks because Thailand is unlikely to abruptly turn away from trade with China in favor of the United States, as Beijing must know, and take gone into what is becoming (or has already become) something of a “new” Cold War. In 2020, Thai exports to China were worth US$30.2 billion (about 1 trillion baht) while Chinese exports to Thailand were worth $51 billion. That same year, US exports to Thailand were estimated at $11.3 billion while imports were worth $37.6 billion.

Meanwhile, bilateral relations between Thailand and China remain strong with several joint initiatives active, particularly the Lancang-Mekong Cooperation Agreement. Whether with Beijing or Washington, Thailand should pursue its international relations in the same way, with friendliness, sincerity, diplomacy and goodwill. It does the kingdom no good to allow fear or favor to rule economic policy at a time like this.

If economic opportunities arise through the IPEF, Thailand will be among the first to reap the benefits of this decision made earlier this week. IPEF membership is likely to be beneficial in the future and the cabinet will discuss this matter next week. In the meantime, the public should be patient before drawing conclusions.

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