Indo-Pacific Economic Framework (IPEF) - Coggle Diagram
Indo-Pacific Economic Framework (IPEF)
The recent Quad meet in Tokyo initiated the path for negotiations among the ‘founding members
India agreed to be a part of the IPEF
What is IPEF?
It is not a free trade agreement
No market access or tariff reductions have been outlined, although experts say it can pave the way to trade deals
It is a US-led framework for participating countries to solidify their relationships and engage in crucial economic and trade matters
Members of IPEF
All four Quad countries, and New Zealand
It includes seven out of 10 members of the Association of South East Asian Nations (ASEAN)
Together, these countries account for 40 per cent of the global GDP
Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam
Four pillars of IPEF
targeting green energy commitments and projects.
resilient supply chains that will withstand unexpected disruptions like the pandemic.
implementing fair trade, including rules
targeting corruption and effective taxation.
higher standards and rules for digital trade, such as cross-border data flows.
How do members participate?
Negotiations are meant to determine and list the provisions under each pillar and open the floor for countries to choose their ‘commitments’.
The framework would be open to other countries willing to join in the future provided they are willing to adhere to the stipulated goals and other necessary obligations.
Countries are free to join (or not join) initiatives under any of the stipulated pillarsbut are expected to adhere to all commitments once they enrol.
Reasons for the creation of IPEF
Rising Chinese influence
“Pivot to Asia” strategy
US regaining lost credibilit
What does it have to do with China?
IPEF would bring those businesses into their territory.
It officially EXCLUDED Taiwan despite its willingness and economic merit to join.
US companies are looking to move away from manufacturing in China.
This exhibits Washington’s geopolitical caution.
US lacks an economic and trade strategy to counter China
Issues with IPEF framework
Reluctance to offer significant concessions under the agreement
Volatility of US domestic politics
US administration has no congressional approval, Hence its legal status isquestionable
IPEF does not subscribe to the single undertaking principle
It neither constitute a ‘free trade agreement,’ nor a forum to discuss tariffr eductions
US and the founding partners need to develop the process and criteria
Quad’s plan would take several years to ultimately fructify but it is moving in the right direction.
Without ratification by Congress, the IPEF’s fortunes will remain in limbo
There is no doubt these plans will extend to the new economic alliance
Bringing the IPEF to fruition will involve significant domestic and international challenges