The U.S.-led Indo-Pacific Economic Framework is set to be launched early next week during President Biden's visit to Japan.
The IPEF, which Biden first proposed last October, seeks cooperation in four main areas: fair and resilient trade; supply chain resilience; infrastructure, clean energy and decarbonization; and lastly taxation and anti-corruption.
Its purpose is to achieve regional cooperation on a wide range of issues, and not just trade.
"So it is not confined to economic or international issues concerning free trade and investment of it. It tries to encompass some many other free democratic societies characteristics, like freedom of speech and corruption, more transparent society, including environmental issues, and global warming issues, and reduction of you know, carbon consumption. So, it is comprehensive, totally comprehensive kind of international framework. And that's why this time IPEF is completely different from previous arrangements like you know, FTA or RCEP or CPTPP."
Unlike traditional FTAs, participating countries can pick-and-choose the areas where they would like to make specific commitments.
Also, the IPEF will not include lower tariffs, rather it will seek to minimize supply chain vulnerability and promote investment in the green economy.
South Korea, Japan, Australia, New Zealand and Singapore are all set to join the IPEF.
They are also part of the Regional Comprehensive Economic Partnership a mega trade bloc led by China.
South Korea's trade ministry believes the IPEF will diversify and stabilize the country's supply chain networksand sees this as an opportunity to strengthen its cooperation with the U.S. and regional partners.
There have been some fears over a backlash from China as the framework is widely viewed as a move to counter China’s growing influence in the Indo-Pacific.
South Korea, however, has dismissed those claims and said discussions are under way with China for a follow-up bilateral FTA.
Experts say that the Yoon administration will not leave out China from its free trade talks.
"China is just too close and it is just too big. China will always remain a major economic partner to Korea And because China has grown so much as an economic power, there does need to be some rebalancing in the conditions of the FTA. So, there’ll probably need to be some modification, re-negotiation."
South Korean President Yoon Suk-yeol is expected to virtually attend the IPEF's launching event slated for next Tuesday.
Min Suk-hyen, Arirang News.