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What is the News?
The US President has launched the Indo-Pacific Economic Framework for Prosperity (IPEF). The negotiations will begin shortly and these are expected to centre around four main pillars, including trade, supply chain resiliency, clean energy and decarbonisation, and taxes and anti-corruption measures.
Indian PM has mentioned that India will work together with [other IPEF countries] to build an inclusive and flexible Indo-Pacific Economic Framework.
About Indo-Pacific Economic Framework (IPEF)
|Read here: Explained: What is the Indo-Pacific Economic Framework?|
Members of IPEF: The grouping includes seven out of 10 members of the Association of South-East Asian Nations (ASEAN), all four Quad countries, and New Zealand represents about 40% of global GDP.
Three ASEAN countries considered closer to China — Myanmar, Cambodia and Laos — are not members of the IPEF, however.
How IPEF is different from TPP and RCEP?
IPEF would not be a “free trade agreement”, nor are countries expected to discuss reducing tariffs or increasing market access.
The IPEF would not seek to replace the 11-nation CPTPP (Trans-Pacific Partnership) that the U.S. quit in 2017, or the Regional Comprehensive Economic Cooperation (RCEP), which China and all of the other IPEF countries (minus the U.S.) are a part of.
The IPEF was intended to boost U.S. manufacturing. As businesses are beginning to look for alternatives to China, the U.S. would seek to attract businesses investing in China towards IPEF. Thereby, making the countries in the Indo-Pacific Framework will be more reliable partners for U.S. businesses.
Source: The post is based on the article “India to join Biden’s new trade initiative for Indo-Pacific region” published in The Hindu on 24th May 2022.