Advancing a Shared Vision of Economic Prosperity
• The U.S. announced $113.5 million to seed new strategic initiatives in the region.
• Region has seen an average annual economic growth rate of around 6% over the last 5 years.
• The U.S. has made investments of nearly $2 trillion into the region.
• In 2018, cumulative U.S. investment in ASEAN was $271 billion, more than U.S. foreign direct investment in China and Japan combined.
The Indo-Pacific region stretches from the United States’ west coast on the Pacific Ocean to the west coast of India in the Indian Ocean, connecting the two oceans through Southeast Asia. The region is made up of 14 countries: Australia, Bangladesh, Burma, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam. The Indo-Pacific region is one of the greatest current and future engines of the global economy.
The Indo-Pacific is the most populous, fastest growing and most economically dynamic part of the world. By 2030, it will represent 66% of the world’s middle class, and 59% of all goods and services sold to middle class consumers will be sold in the Indo-Pacific. Developing nations in the region will need about $1.5 trillion in investment every year for the next decade in order to develop the infrastructure necessary to sustain their growth.
Despite the Indo-Pacific region’s growth, over the last decade growth in U.S. exports to Asia have lagged behind overall U.S. export growth. The United States is gradually losing market share in trade with Asian countries. Meanwhile, Indo-Pacific countries have signed more than 150 bilateral or regional trade agreements, while the United States has just four free trade deals in the Indo-Pacific region—with Australia, Singapore, South Korea, and the newly negotiated deal with Japan.
Two-way investment and trade in the Indo-Pacific region has grown by almost 6% to a record of nearly $2 trillion, supporting more than 3 million jobs in the United States and 5.1 million jobs in the Indo-Pacific in 2018. The region contains seven of the world’s 30 freest economies—Singapore, Australia, New Zealand, Taiwan, Malaysia, South Korea and Japan. The sea routes of the Indo-Pacific facilitate 50% of world trade.
The U.S. has made foreign direct investments of $1.4 trillion into the Indo-Pacific region. The U.S. doubled the amount of security assistance it provided to the Indo-Pacific nations, totaling more than $500 million. The BUILD Act, which President Donald J. Trump signed in October 2018, provides for development finance capacity up to $60 billion. The Indo-Pacific Transparency Initiative received an additional $68 million for new programs to support allies, partners and regional institutions in advancing shared principles of combating corruption and promoting good governance.
President Trump in 2017 outlined his vision for a free and open Indo-Pacific at the Asia Pacific Economic Cooperation (APEC) CEO Summit in Vietnam. President Trump has aimed to reinvigorate private business interest in the region. Since the beginning of the Trump administration, the U.S. government has invested more than $2.9 billion to support the economic portion of the Indo-Pacific Initiative.
From its launch in July 2018, the initiative has invested nearly $600 million to date to support digital connectivity and cybersecurity, promote sustainable infrastructure development, and strengthen energy security and access.
The Trilateral Partnership for Infrastructure Investment in the Indo-Pacific, formed by the United States, Australia and Japan in July 2018, announced its inaugural joint projects, which included projects collectively worth $400 million. The first ministerial meeting of “The Quad”—the U.S., Australia, India and Japan—took place in September 2019. Ministers affirmed commitments to cooperating on maritime security, quality infrastructure, and regional connectivity, and discussed priorities in counter-terrorism and cyber security with the goal of advancing a free, open market and including Indo-Pacific.
The California Chamber of Commerce is hopeful that the Trump administration will continue to develop the Indo-Pacific Initiative in 2020 and strengthen partnerships within the region.
The U.S. Department of Commerce, through its Access Asia Program, plans to dedicate many events to the region, including continuing its flagship trade mission to connect U.S. firms with the Indo-Pacific market in 2020.
Blue Dot Network: The Belt and Road Alternative
The Diplomat, April 7, 2020
The U.S. Vision for the Indo-Pacific Region
U.S. Department of State, January 30, 2020
Indo-Pacific Transparency Initiative
U.S. Department of State, November 3, 2019
A Free and Open Indo-Pacific: Advancing a Shared Vision
U.S. Department of State, November 3, 2019
America’s Indo-Pacific Economic Vision
U.S. Department of State, July 30, 2018
The CalChamber supports expansion of international trade and investment, fair and equitable market access for California products abroad, and elimination of disincentives that impede the international competitiveness of California business.
The Indo-Pacific region represents nearly half of the Earth’s population, one-third of global gross domestic product (GDP) and roughly 50% of international trade. The large and growing markets of the Indo-Pacific already are key destinations for U.S. manufactured goods, agricultural products, and services suppliers.
Following the U.S. withdrawal from the Trans-Pacific Partnership, a highlighted Indo-Pacific Vision is welcomed, as this is a key area in geopolitical, strategic, and commercial terms.