In Tokyo Monday, President Joe Biden announced the launch of the new Indo-Pacific Economic Framework for Prosperity (IPEF), a trade framework involving 13 countries that want economic opportunity outside usually scant trade deals with China.
"We share a commitment to a free, open, fair, inclusive, interconnected, resilient, secure, and prosperous Indo-Pacific region that has the potential to achieve sustainable and inclusive economic growth," a joint statement from IPEF leaders said. "We acknowledge our economic policy interests in the region are intertwined, and deepening economic engagement among partners is crucial for continued growth, peace, and prosperity."
President Joe Biden meets with Japanese Prime Minister Fumio Kishida at Akasaka Palace, Monday, May 23, 2022, in Tokyo. (AP Photo/Evan Vucci)
The new economic agreement includes Australia, Brunei, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, Vietnam and the U.S.
"In order to prepare our economies for the future, we are launching the process to establish the Indo-Pacific Economic Framework for Prosperity," the statement added. "This framework is intended to advance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness for our economies."
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"Through this initiative, we aim to contribute to cooperation, stability, prosperity, development, and peace within the region," the leaders also said.
Together, the countries make up more than 40% of the world’s GDP and Biden said regional unification under the new IPEF creates an environment where these countries can freely decide the rules to allow for a level playing field in economic engagement and trade.
U.S. President Joe Biden, front, left, and Japan's Prime Minister Fumio Kishida, front right, listen to the national anthem at the Akasaka Palace state guest house in Tokyo, Japan, Monday, May 23, 2022. (AP Photo/Eugene Hoshiko, Pool)
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Biden also said the deal benefits American workers and American businesses, giving even small businesses and ranchers a chance to compete as it is expected to lower shipping costs and protect against shipping disruptions — which have resulted in higher costs for consumers.
The new agreement comes as the U.S. has invested over $969 billion in the region in 2020, a figure that has nearly doubled in the last decade.
Japan's Emperor Naruhito, right, greets U.S. President Joe Biden prior to their meeting at the Imperial Palace in Tokyo Monday, May 23, 2022. (Saul Loeb/Pool Photo via AP)
The Indo-Pacific region also supports more than three million American jobs with nearly $900 billion invested back into the U.S.
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"We look forward to jointly creating conducive environments to boost flows of commerce, trade, and investments amongst our economies, and to enhancing standards and access to opportunities for our workers, companies, and peoples in our combined markets," the IPEF leaders concluded.
The IPEF framework consists of four key principles to unify economies among its partners: a wide variety of trade issues, improving the "transparency, diversity, security, and sustainability in our supply chains," privacy provisions to protect against money laundering or bribery regimes and strong labor and environmental standards including decarbonization.
The Associated Press contributed to this report.