US President Joe Biden, during his East Asia trip, is expected to launch Indo-Pacific Economic Framework (IPEF) in Tokyo.
About the ‘Indo-Pacific Economic Framework (IPEF)’ –
- According to an insight paper on IPEF put out by the US Congressional Research Service, the IPEF is not a traditional trade agreement.
- Rather, it would include different modules (four pillars) covering:
- fair and resilient trade,
- supply chain resilience,
- infrastructure and decarbonisation, and
- tax and anti-corruption.
- These pillars will have specific modules. Countries would have to sign up to all of the components within a module, but do not have to participate in all modules.
Key Features –
- The fair and resilient trade module will be led by the US Trade Representative and include digital, labour, and environment issues, with some binding commitments.
- The IPEF will not include market access commitments such as lowering tariff barriers, as the agreement is more of an administrative arrangement.
Origin of IPEF –
- Biden first spoke about the IPEF at the October 2021 East Asia Summit.
- At this summit, he said that the United States will explore with partners the development of an Indo-Pacific economic framework.
- This framework will define our shared objectives around –
- trade facilitation, standards for the digital economy and technology, supply chain resiliency, decarbonisation and clean energy,
- infrastructure, worker standards, and other areas of shared interest.
Why the U.S. is keen on launching the IPEF?
- The US is trying to regain credibility in the region after former President Donald Trump pulled out of the Trans Pacific Partnership (TPP).
- Since then, there has been concern over the absence of a credible US economic and trade strategy to counter China’s economic influence in the region.
- China is an influential member of the TPP, and has sought membership of its successor agreement Comprehensive and Progressive Agreement on Trans Pacific Partnership.
- It is also in the 14-member Regional Comprehensive Economic Partnership (RCEP), 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 South East Asia.