US seeks new robust economic framework with Indo-Pacific allies

KUALA LUMPUR: The United States is looking to form an economic framework that goes beyond the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

While the US has no plans to join the pact, U.S. Commerce Secretary Gina Raimondo said the new framework aims to be more inclusive than CPTPP and could even be more flexible and robust.

She added that the United States could possibly work more closely together with its Indo-Pacific allies on a wide range of areas.

“We want a framework where we can work even more closely together on issues in our shared industries like supply chain, infrastructure, the digital economy, cybersecurity, privacy” said Raimondo during her visit to Onsemi, an American semiconductor company here in Senawang, Negeri Sembilan.

Under Barack Obama’s administration in 2016, the US signed the Trans-Pacific Partnership Agreement (TPP), but it never entered force. The US government under Donald Trump withdrew from the agreement a year later. The agreement was then replaced with the CPTPP which incorporates most of the provisions of the TPP.

The 11 countries under the CPTPP include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. China and Taiwan have both submitted their applications to join the pact last September while the United Kingdom said its on tract to become part of CPTPP by next year.

The 11 CPTPP members represent roughly US$13.5 trillion in GDP, or 13.4 percent of global GDP, making it one of the world’s largest trade deals.

On solving the issues of semiconductor supply chain in Malaysia and globally, Raimondo assured that Malaysia is US’s valued ally and that her country will work together to help solve the supply bottleneck issue in Malaysia.

The global chip shortage is caused by limited supply and greater demand for semiconductor chips as operations stalled during the COVID-19 pandemic.

This led to major shortages and queues amongst consumers for products that require semiconductors such as cars, mobile phones and televisions.

Raimondo said that the US aims to increase production not just domestically but also with its allies in the region to play its part in solving the global chip shortage.