Indo Pacific Economic Framework
- IPEC is an idea, which the US is seeking to push among countries of the Indo-Pacific region.
Background of the IPEF
- The US President is expected to launch his Administration's Indo-Pacific Economic Framework (IPEF) in Tokyo along with the Japanese PM during the Quad summit.
- Biden first spoke about the IPEF at the October 2021 East Asia Summit.
- The United States want to explore with partners the development of an Indo-Pacific economic framework that will define our shared objectives around:
- Trade facilitation
- Standards for the digital economy and technology
- Supply chain resiliency
- Decarbonization and clean energy
- Worker standards and other areas of shared interest.
- According to the US Congressional Research Service
- The IPEF is not a traditional trade agreement.
- Rather, it would include different modules covering "fair and resilient trade, supply chain resilience, infrastructure and decarbonization, and tax and anticorruption"
- Countries would have to sign up to all of the components within a module, but do not have to participate in all modules.
- The IPEF will not include market access commitments, as the agreement is more of an Administrative arrangement".
- Congressional approval is not mandatory for this, unlike for trade agreements.
Why is the US Pushing for IPEF?
- The IPEF is seen as a means by which the US is trying to regain credibility in the region after former President Donald Trump pulled out of the Trans Pacific Partnership (TPP).
- There has been concern over the absence of a credible US economic and trade strategy to counter China's economic influence.
- China has sought membership of its successor agreement Comprehensive and Progressive Agreementon Trans Pacific Partnership.
- It is also in the 14-member Regional Comprehensive Economic Partnership, of which the US is not a member (India withdrew from RCEP).
- The Biden Administration is projecting IPEF as the new US vehicle for re-engagement with East Asia and SouthEast Asia.
Response of regional countries
- IPEF did not enthuse all countries in the region equally as it comes with binding trade rules but no guarantees on market access.
- Japan has welcomed the IPEF and Thailand has announced it would join the negotiations.
- Australia and New Zealand may also join.
- South Korea, Philippines and Singapore have expressed cautious interest.
Response of India
- Biden is expected to invite India to join negotiations for the IPEF on the sidelines of the Quad summit.
- India is the only Quad member that has said nothing about it.
- India has received the details of IPEF and is examining it.
- In a paper titled 'Deciphering the IPEF in March this year, Prabir De of the Research and Information System for Developing countries, a think tank of the MEA, wrote that India "may also be uncomfortable with the US high standards, and would like to avoid risks" and "may take time to consider joining, should an invite to join the IPEF be extended by the Biden Administration".
- According to De, "some areas proposed in the IPEF do not appear to serve India's interests".
Q. The Indo-Pacific has been the center of global trade politics, with overlapping multilateral agreements putting India into a difficult position. Comment