February 21

【Part 1】 US-China Competition and the Indo-Pacific region : (2) Economy

Discussions focused on the impact and prospects of the US-China confrontation over economic security on the Indo-Pacific region’s economic and trade regime, and on how Japan and other regional players can contribute to maintaining and strengthening the free trade regime.

While the era of economic integration has given way to an era of economic security, the view was shared that each country’s commitment to the free trade regime, which has brought economic development to the region, remains strong. US efforts to reinforce supply chains and domestic industries (the CHIPS Act, the Quad, and friend-shoring through the Indo-Pacific Framework (IPEF)) were highlighted. It was suggested that China should play a role in promoting a free trade regime through the CPTPP and RCEP even in the midst of political and security conflicts with the US. On the other hand, concerns were voiced about China's economic coercion.

As ASEAN is demonstrating its ASEAN-centrality through various regional frameworks, it was suggested it should play a leading role in the Global South. It was also pointed out that the importance of ensuring clear-cut rules and transparency will increase in the face of growing uncertainty while the multilateral trade system centered on WTO faces dysfunction. Regarding digital governance, regional rule formulation and security exceptions were discussed to address the trade-offs between free data flow and public policy objectives.

As for the roles to be played by regional players such as Japan, ASEAN, and Australia, it was noted that the CPTPP and RCEP should be used to rebuild the regional free trade regime. Moreover, expectations were expressed that Japan should play a bridging role, as it is in a unique position to participate in multiple frameworks such as FTAs, digital agreements, and IPEF.

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