About 

• 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. 

What would IPEF do?

• 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.

Significance

• 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.