INDO-PACIFIC ECONOMIC FRAMEWORK

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Context

India is set to join U.S. President Joe Biden’s new trade initiative named Indo-Pacific Economic Framework (IPEF) announced through a virtual medium.

About IPEF

IPEF grouping will include seven out of 10 members of the Association of South-East Asian Nations (ASEAN), all four QUAD countries, and New Zealand, together it represents 40% of global GDP.
The negotiations for the IPEF are expected to centre around four main pillars:
- Trade
- Supply Chain Resiliency
- Clean Energy and Decarbonisation
- Taxes and Anti-corruption measures
The IPEF would not be a ‘free trade agreement’ and will not negotiate a reduction in tariffs or increase market access.
The three ASEAN countries closer to China – Myanmar, Cambodia and Laos are not members of the IPEF.
The IPEF is part of Biden’s commitment to keeping American families and workers at the centre of the country’s economic and foreign policy. And strengthening ties with allies and partners to increase shared prosperity.
One of the IPEF’s roles in the Indo-Pacific will be to set and follow standards for the digital economy and cross-border data flows and data localization, areas where India has had some strong differences with the S. and its allies.
The framework also seeks to counter inflation through more resilient supply chains, promoting more commitments from every member country on clean energy and decarbonisation, and commitments to a fair economy.