A primer on economic strategy in the Indo-Pacific

For decades, global supply chains have been organised around the principle of efficiency – with goods produced in the lowest-cost locations and delivered “just in time”. This reduced costs but created new vulnerabilities. In recent years, disruptions caused by the pandemic, natural disasters, and geopolitical tensions have prompted companies and governments to shift toward a model with greater emphasis on risk reduction – the “just-in-case” supply chain.

• “Just-in-Time” approaches rely on minimal inventoriesand tightly coordinated delivery schedules.
• “Just-in-Case” approaches involve stockpiling, supplychain diversification, and bringing production closer toor within home markets.

This shift reflects a broader trend: supply chains are no longer just economic tools, but also seen as matters of national security, economic resilience, and strategic interest. This shift has created both winners and losers. Vietnam, for example, has emerged as a key beneficiary of supply chain diversification efforts – particularly from firms pursuing ‘China + 1’ strategies to reduce overexposure to Chinese production. Companies such as Apple and Samsung have expanded operations in Vietnam, attracted by its favourable investment conditions, a relatively skilled workforce, and significant government support for both local supplier firms and multinationals establishing supply networks. While the drivers of this shift are complex and still evolving, Vietnam’s experience highlights how regional economies can reposition themselves amid changing global supply chain strategies.

Global trade has undergone a significant transformation in recent years. The World Trade Organisation (WTO), once the primary forum for negotiating trade rules and resolving trade disputes, has seen its influence diminish. The paralysis of its dispute settlement mechanism – caused by US refusal to appoint new judges to its appeals court – has weakened its ability to enforce rules and resolve conflicts. As a result, new platforms and partnerships have emerged to fill the vacuum.

In the Indo-Pacific, governments are pursuing regional trade agreements to shape global flows of goods, services, and investment. These are redrawing the map of economic influence and changing who sets the rules of regional trade. Countries are negotiating and finding common ground with new, smaller groupings to protect supply chains, advance geopolitical interests, and secure market access. This has become known as ‘minilateralism’.

The major minilateral groupings that have since been created in the Indo-Pacific therefore differ in subtle but important ways.

The Regional Comprehensive Economic Partnership (RCEP) was designed as a relatively low-commitment agreement, aimed at broadening membership by relaxing accession requirements on domestic trade and investment policies.

By contrast, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) evolved from the original US-led Trans-Pacific Partnership (TPP), which sought to establish a high-standard trade agreement with stronger provisions on liberalisation and regulatory coherence. After the US withdrew from the TPP in 2017 under the first Trump administration, the remaining members proceeded to conclude negotiations under a new agreement without US involvement, dubbed the CPTPP.

The Indo-Pacific Economic Framework (IPEF) was launched under the Biden administration as a non-traditional initiative to deepen economic engagement between the US and Indo-Pacific partners. It deliberately avoided the structure of a formal trade agreement, in part to sidestep US domestic political resistance to further trade liberalisation. Although negotiations made incremental progress, momentum stalled following the election of a second Trump administration in 2024.

Finally, BRICS+ – encompassing Brazil, Russia, India, China, South Africa and, since 2024 various other emerging economies – originated as a diplomatic forum among large emerging economies. While it is not a trade agreement per se, it has increasingly evolved into a platform for promoting non-Western institutional alternatives. This includes proposals for a multilateral development bank and an international payments system, signaling broader ambitions to reshape global economic governance.