Benefits of joining IPEF trade pillar unclear

In 2022, the United States launched a new Asia-Pacific trade initiative known as the Indo-Pacific Economic Framework for Prosperity (IPEF).
The framework includes 14 countries — Australia, Brunei, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, Vietnam, Fiji and the United States.
Together, the participants account for about 40 percent of global GDP and there are other countries that could join the initiative.

IPEF is neither an agreement nor a trade bloc, but a framework.
Unlike traditional trade blocs, there is no plan for IPEF members to negotiate tariffs and ease market access.
Instead, the programme foresees integrating partners through agreed standards in four key pillars: fair and resilient trade, supply chain resiliency, clean energy decarbonisation, and tax and anti-corruption – to deepen economic engagement in the region.
The primary objective of the IPEF is to ensure a high degree of regulatory coherence and to make market access contingent upon realisation of regulatory standards.
The countries touted IPEF as a framework for what will ultimately become a tight-knit group of trading nations.

The IPEF is part of the U.S.’s more than a decade old “Pivot to Asia” programme, re-imagining the Indo-Pacific as a geographic construct including America.
The Quad grouping, consisting India, Australia, Japan and the U.S., is part of the same pitch made by the U.S. administration.
IPEF is intended to offer US allies an alternative to China’s growing commercial presence across the Asia-Pacific.
The IPEF’s non-specific and flexible nature also suits India, which has held strong views on a range of issues like labour standards, environmental restrictions on fossil fuels, and data localisation.
India’s inclusion also comes from a geopolitical need to counter China’s virtual control over Asian trade.

4 Pillars

The framework is structured around four pillars relating to Trade (Pillar I); Supply Chains (Pillar II); Clean Economy (Pillar III); and Fair Economy (Pillar IV).
India had joined Pillars II to IV of IPEF while it has an observer status in Pillar-I.

Why in News?

With the scheduled seven rounds of Indo-Pacific Economic Framework for Prosperity (IPEF) negotiations drawing to a close this month, New Delhi continues to be skeptical of joining the trade pillar citing the lack of “tangible benefits”.
The trade pillar is one of the most crucial parts of IPEF that seeks commitment on sensitive areas as agriculture, digital trade and labour and could require changes in domestic regulation.
However, an agreement on the trade pillar was not reached in the last round in San Francisco.

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