- Recently, United States President Joe Biden launched a new Asia-Pacific trade initiative known as the Indo-Pacific Economic Framework for Prosperity (IPEF) in Tokyo.
- At present 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.
- 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, 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.
Why in News?
- India stayed out of the joint declaration on the trade pillar of the U.S.-led Indo-Pacific Economic Framework ministerial meet in Los Angeles, with Union Commerce Minister Piyush Goyal citing concerns over possible discrimination against developing economies.
- India was the only one of the 14 IPEF countries, which include South East Asian countries, Australia, New Zealand, South Korea and Japan, not to join the declaration on trade.
- The IPEF move also mirrors India’s decision to walk out after seven years of negotiations from the Regional Comprehensive Economic Partnership (RCEP), a grouping resembling the IPEF that includes China but doesn’t include the U.S.
- A government statement pointed out, however, that India had not walked out of the IPEF talks, and that delegations would continue to participate in future IPEF talks, including on trade with an open mind.