INDO-PACIFIC ECONOMIC FRAMEWORK (Syllabus: GS Paper 3 - Economy)

News-CRUX-10     11th August 2023        
output themes

Context: The government is divided over its final decision to join the trade pillar under the Indo-Pacific Economic Framework (IPEF), even as member-nations are inching towards finalising agreements on all the four pillars by November.

  • This is because apart from other sensitive areas such as labour and environment, digital trade continues to remain a major cause for concern and is a ‘red flag’ for India, people aware of the matter said.
  • India has also sought some clarity regarding the direction of the negotiations on digital trade from the United States, before firming up a decision on joining the trade pillar negotiations.

Cause for Concern

  • IPEF member-nations close to agreements on all four pillars by Nov.
  • India not comfortable giving consent to free flow of data for all countries.
  • Govt has opted out of the trade pillar, and has an ‘observer’ status.
  • The commerce department will resume inter-ministerial consultations before making a final view.

Indo-Pacific Economic Framework (IPEF)

  • About: The Indo-Pacific Economic Framework is a unique type of trade pact that the United States is pushing among the region’s governments.
  • Origin: India and 12 nations led by the United States inaugurated the Indo-Pacific Economic Framework (IPEF) on 23rd May 2022 to provide an economic alternate solution to China’s Geostrategic footprint in the Indo-Pacific area. 
    • Partner Countries: Australia, Brunei, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, Vietnam and the United States. 
      • Within days of its launch, IPEF expanded its membership to the Pacific Island states, with Fiji joining the initiative.
  • Objectives: The IPEF seeks to strengthen economic relationships between all of the participating nations to enhance resilience, sustainable development, inclusiveness, economic expansion, fair treatment, and competitive spirit in the Indo-Pacific region.
  • Pillars: It was proposed as an elaborate framework of rules covering four pillars, namely, fair and resilient trade, supply chain resiliency, clean energy decarbonisation, and tax and anti-corruption.
Samadhaan