Indo-Pacific Economic Framework (IPEF)

Why in news?

• Recently, the second Indo-Pacific Economic Framework for Prosperity (IPEF) Ministerial Meeting took place, showcasing the significant strides made in fostering economic engagement among partner countries in the Indo-Pacific region.

About Indo-Pacific Economic Framework (IPEF):

• It is a US-led initiative that aims to strengthen economic partnership among participating countries to enhance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness in the Indo-Pacific region.
• The IPEF was launched in 2021 with a dozen initial partners who together represent 40% of the world GDP.
• The IPEF is not a Free Trade Agreement (FTA) but allows members to negotiate the parts they want to.
• The negotiations will be along four main “pillars”.
  • Supply-chain resilience
  • Clean energy, decarbonisation & infrastructure
  • Taxation & anti-corruption
  • Fair & resilient trade.

Members:

• Currently, India and 13 countries located in the Pacific Ocean are its members:
  • Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, United States, and Vietnam.

How is IPEF different from other trade deals?

• The IPEF is not exactly a trade pact and the provision of multiple pillars does entail an option for participants to choose what they want to be a part of.
• It’s not a take-it-or-leave-it arrangement, like most multilateral trade deals are.
• Since the IPEF is not a regular trade pact, the members so far are not obligated by all the four pillars despite being signatories.

PRACTICE QUESTION:

With reference to ‘Indo-Pacific Economic Framework’, consider the following statements:

1. It is a trade deal negotiated under WTO

2. Currently, India and 13 countries located in the Pacific Ocean are its members

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer