The Biden Administration is projecting Indo-Pacific Economic Framework (IPEF) as the new US vehicle for re-engagement with East Asia and South East Asia.
Indo-pacific economic framework (IPEF):
The Indo-Pacific Economic Framework (IPEF) is designed as a tool to bolster U.S. cooperation with its Asian partners.
The new partnership aims to
promote and facilitate high-standards trade
govern the digital economy
improve supply-chain resiliency and security
catalyze investment in transparent
build digital connectivity
The arrangement also includes measures to establish sustainable food systems and science-based agricultural regulation, as well as good regulatory practices and trade facilitation.
The United States will pursue five objectives in the indo-pacific each in concert with our allies and partners, as well as with regional institutions.
advance a free and open indo-pacific
build connections within and beyond the region
drive regional prosperity
bolster indo-pacific security
build regional resilience to transnational threats
The IPEF will not include market access commitments such as lowering tariff barriers, as the agreement is “more of an administrative arrangement”, and congressional approval, which is a must for trade agreements, is not mandatory for this.
What is the need?
During the American absence, china has gained ground in terms of regional economic integration.
Last year it applied to join the comprehensive and progressive agreement for trans-pacific partnership (CPTPP), the current 11-member version of the TPP.
China is also a member of the world's largest trade bloc, the 15-member regional comprehensive economic partnership (RCEP).
How is the IPEF different from CPTPP and RCEP?
Unlike the CPTPP and RCEP, the two biggest trade blocs in Asia, the new framework will not lower tariffs.
Instead, the U.S. is seeking cooperation on strategic pillars, such as supply chain resilience and the digital economy.
The IPEF is a more tailor-made mechanism that seeks the benefits of trade partnerships while insulating Americans from the downsides of trade liberalization.
The establishment of the IPEF is also likely to look different from traditional free trade agreements, which often take years of negotiation and require ratification by participating countries.
Eleven countries belong to the CPTPP: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
RCEP encompasses the 10 countries of ASEAN, China, Japan, South Korea, Australia and New Zealand.