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Beyond Market Access
How a new geoeconomic initiative linking Europe and India via the Middle East epitomizes Biden's "Foreign Policy for the Middle Class."
In his October 19 address to the American public on the wars in Ukraine and the Middle East, President Joe Biden reaffirmed the United States' commitment to fostering a stable and interconnected Middle East. He highlighted the significance of projects like the India-Middle East-Europe Corridor (IMEC) for stability, creating jobs and reducing conflicts in the region, benefiting both the Middle East and the U.S. The inclusion of IMEC in his speech reflects its strategic importance within Biden's foreign policy, even as the situation in Gaza and potentially the wider region deteriorates.
At the G20 Summit, President Biden, along with the leaders of India and Middle East and European nations, unveiled the India-Middle East-Europe Corridor: a project to link Europe and South Asia more closely together via the Middle East. As currently envisaged, IMEC would compromise of two corridors: an eastern one that connects India to the Gulf through sea lanes and northern one that connects Saudi Arabia to Europe through Jordan and Israel.
Once finished, IMEC would establish an efficient transit network that supplements existing transport routes for trade among participating states. In addition to the ship-to-rail system with its own logistical and operations challenges, IMEC includes electricity and digital cables and clean hydrogen pipelines. While it also offers a different approach than China’s Belt and Road Initiative (BRI) when it comes to labor, finance, and member states’ agency in the corridor, a number of participating governments—including Abu Dhabi and Riyadh—would likely hesitate to characterize IMEC as an alternative to the BRI.
At the geopolitical level, then, IMEC represents a new way for littoral states of the Eurasian rimland like Italy and France, the Gulf Arab nations, and India to cooperate—all at the same time the broader Indo-Pacific begins a slow but gradual process of geoeconomic and geopolitical integration. With its still-dominant global position, the United States can shepherd this emerging Eurasian rimland system to realization. Beyond matters of grand strategy and great power competition, moreover, IMEC also illustrates America’s changing approach to trade policy, characterized increasingly by the priority placed on domestic industrial revival and an unwillingness to trade unfettered market access for geopolitical alignment. In this context, IMEC is more in line with two other major Biden administration geoeconomic projects: the Indo-Pacific Economic Framework (IPEF) and Partnership for Atlantic Cooperation.
IMEC and the End of the Old “Washington Consensus”
A new trade policy for a new global era: this appears to be the theme that’s guiding the Biden administration as they balance America’s indispensable role in the global economy with domestic industrial revival and national security. Gone are the days of the old, 1990s-era “Washington Consensus,” which held that international trade liberalization, balanced budgets, and unfettered markets were the keys to peace and prosperity in an increasingly integrated and globalized world. Greater international economic ties between nations would also foster the spread of democracy around the globe—or so many policymakers and political leaders believed at the time.
In the aftermath of the 2008 financial crisis, however, American presidential administrations have struggled to manage the fallout of this laissez-faire approach and address the grievances of an American working class hurt by inflows of cheap foreign imports and widespread offshoring. Without fully comprehending the impact on the working class, the U.S. government granted market access to potential geopolitical partners as a central piece of its statecraft. Former President Trump broke this already-eroding trade consensus, and President Biden has continued this trend. The Biden administration has adopted a labor-focused trade policy combined with proactive industrial investments to revitalize the U.S. industrial base, maintained a number of Trump’s tariffs, and studiously avoided any new traditional trade deals.
The administration vowed to center American workers in its trade and foreign policy decisions, a shift that entails a move away from merely granting market access and towards a new economic statecraft model centered on standardization, connectivity, and infrastructure financing. The aim is to benefit the U.S. economy or, at the very least, ensure that it does not harm the working class while achieving desired U.S. foreign policy goals. The IMEC reflects this prioritization in its very structure: it is a geoeconomic partnership, not a formal trade agreement that would grant other nations access to U.S. markets. Unlike the Trans-Pacific Partnership (TPP) trade agreement, which aimed to increase U.S. economic engagement with Asia-Pacific nations as part of the Obama administration's pivot to Asia, IMEC focuses less on leveraging the strength of the American economy and more on empowering America’s allies and regional partners.
Consistent U.S. trade deficits with IMEC nations underscore the reality that the U.S. imports more from these countries than it exports to them, and this dynamic is reflected in the specifics: pharmaceuticals, textiles, and machinery all find a warm welcome in the U.S. market. By contrast, U.S. exports like agricultural products, manufactured goods, and services often face higher tariffs and obstacles in IMEC markets.
Indeed, U.S. markets are in most cases already more open to exports from IMEC nations than their markets are to American exports. One key indicator is the prevalence of lower tariffs on goods imported from IMEC countries compared to those from the United States. For example, Indian exports to the United States face a 2.7 percent tariff rate, while U.S. products encounter a 9.9 percent import duty in India, contributing to a U.S. trade deficit with India of $45.7 billion in 2022.
Similarly, the U.S. goods trade deficit with the European Union reached $202.5 billion that same year. Over the years, U.S. administrations have aimed to reduce trade barriers, boost bilateral trade and investment, enhance regulatory cooperation, and collaborate on global economic issues with the EU. Despite new Biden administration initiatives like the U.S.-EU Trade and Technology Council established significant progress in improving economic relations and concrete trade outcomes have proven challenging.
In other words, the United States has a diminishing reserve of incentives that it can offer potential partners; America only has so much market access it can offer. IMEC represents one promising solution to this policy conundrum, one that allows the Biden administration to abide by the principles of its “Foreign Policy for the Middle Class” slogan while still effectively checking Chinese influence via support and guidance for an integrated corridor of empowered and prosperous U.S. partners across the Eurasian rimland.
Age-old overland and maritime routes around the Eurasian rimland have been and will continue to be reconceptualized. West Asia—the convergence of the Middle East and South Asia—is now being rebuilt as a critical geopolitical and geoeconomics space between Europe and the Indo-Pacific. America is using its still-dominant global position to steer and influence the process of economic and geopolitical integration among the littoral states of the Eurasian supercontinent, in line with America’s interests. Equally important, it is a shared interest of the IMEC nations to build an integrated economic ecosystem around the Eurasian rimland that, by virtue of its existence, could contest China’s economic dominance in Eurasia.
For domestic social and political reasons, however, the United States can no longer afford to give concessions that many political leaders and voters believe hurt its heartland and middle class as part of its statecraft. In any case, America’s markets are already relatively open to many of its trade partners. IMEC aligns with the Biden administration's "Foreign Policy for the Middle Class," with Washington as a key driver, without resorting to market access as a bargaining chip for geopolitical and geoeconomic alignment.
That makes it a foreign policy move to keep an eye on, even as the Middle East boils.
Mohammed Soliman is the director of the Strategic Technologies and Cyber Security Program at the Middle East Institute and a visiting fellow with the National Security Program at Third Way. His work focuses on the intersection of technology, geopolitics, and business in emerging markets. Follow him on Twitter @Thisissoliman.