Kingdom stands to gain from IPEF

Kingdom stands to gain from IPEF

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

The move was even criticised by former finance minister Thirachai Phuvanatnaranubala as showing "clear intention [to go] against a rival country".

While discreet questions should be heard, the kingdom stands to benefit from the talks and should be more than capable of maintaining a balance in relations with China and the US.

The IPEF is becoming new lexicon in international relationships and geopolitics.

President Biden introduced the IPEF during his visit to the region on May 23. It was part of a much-anticipated strategy pivoting to this part of the world.

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

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

But the plan is also seen as a counter to China's aspirations for the region, particularly after China's omission. On Wednesday, Beijing called it divisive. When Fiji announced it would become IPEF's 14th member the following day, China said the Asia-Pacific "should not become a political chessboard", referring to the US.

To be clear, the IPEF is not a binding trade agreement. Critics saw the initiative as a symbolic gesture in which the US is trying to save face and re-engage with countries in the region after former US president Donald Trump walked away from the TPP. It signifies countries' willingness to boost economic ties with each other, rather than constituting a fully-fledged trade deal 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, the IPEF presents a way to potentially improve the financial standing of participants.

Several countries in Asean which expressed interest in joining the TPP before its collapse -- such as Thailand, Indonesia, and the Philippines -- are now IPEF participants.

Thailand in particular wants to tap into the IPEF to boost its agriculture trade, while other Asian partners want access to the US market without excessive trade barriers, and the IPEF -- despite its lack of formal agreements -- may lead to a more dialogue and negotiation in the future.

Despite its non-obligatory nature, the government should nevertheless tread carefully. When the kingdom expressed an 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 win support. That said, any trade deal or alliance that Thailand wishes to join must first undergo scrutiny. Parliamentary approval would be needed before the government can make such a major decision -- especially on international policy with legally binding effects.

Yet despite the concerns raised, Thailand must not be afraid to participate in economic talks as it is unlikely that Thailand will ever abruptly shift away from trade with China in favour of the US, as Beijing must know, and take sides in 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 to be worth $11.3 billion while imports were worth $37.6 billion.

Meanwhile, Thailand and China's bilateral relations remain solid with several active joint initiatives, especially the Lancang-Mekong Cooperation arrangement. Whether with Beijing or Washington, Thailand should pursue international relationships equally, with friendliness, sincerity, diplomacy and good will. It does the kingdom no good to allow fear or favour to drive economic policy at a time like this.

Should economic opportunities arise from the IPEF, Thailand will be among the first to reap the rewards because of that decision made earlier this week. IPEF membership is likely to be beneficial in the future and the cabinet will next week discuss this issue. In the meantime, the public should be patient before jumping to any conclusions.

Editorial

Bangkok Post editorial column

These editorials represent Bangkok Post thoughts about current issues and situations.

Email : anchaleek@bangkokpost.co.th

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