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What is the News?
The United States President is expected to launch the Indo-Pacific Economic Framework (IPEF).
What is the Indo-Pacific Economic Framework (IPEF)?
In October 2021, the US administration announced the development of an Indo-Pacific Economic Framework(IPEF).
Pillars: The IPEF is built on four modules: 1) fair and resilient trade (including digital, labour, environmental and other standards), 2) supply chain resilience, 3) infrastructure, decarbonisation and clean energy and 4) tax and anti-corruption.
Countries would have to sign up for all of the components within a module but do not have to participate in all modules.
However, IPEF will not include market access commitments such as lowering tariff barriers, as the agreement is more of an Administrative arrangement.
Why is the US planning to launch this framework?
IPEF is seen as a means by which the US is trying to regain credibility in the region after former US 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.
Will India be joining the IPEF?
India is currently examining the framework.
However, some experts have said that some areas proposed in the IPEF do not appear to serve India’s interests.
For example, the IPEF talks about digital governance but the IPEF formulation contains issues that directly conflict with India’s stated position. Amongst these are the prohibition/restrictions on cross-border data flows and data localization requirements including for financial services; promotion of the interoperability of privacy rules among others.
Source: The post is based on the article “Explained: What is the Indo-Pacific Economic Framework?” published in Indian Express on 20th May 2022.