Published: 24th Nov, 2023
Context:
Government of India has clarified that being the member of Indo-Pacific Economic Framework for Prosperity (IPEF) will not impose restrictions on India’s policy making.
What is IPEF Agreement?
- The IPEF is an economic framework proposed by the United States as an alternative or complement to RCEP.
What is Regional Comprehensive Economic Partnership (RCEP)?
RCEP is a trade agreement involving 15 countries in the Asia-Pacific region, namely the 10 member states of the Association of Southeast Asian Nations (ASEAN) — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam — as well as China, Japan, South Korea, Australia, and New Zealand.
- The purpose of the IPEF is to promote economic cooperation, trade, and investment among participating countries in the Indo-Pacific region, with the United States taking a leading role.
- The article highlights that the IPEF focuses on non-tariff areas such as intellectual property, services, investment, domestic regulations, digitalization, labor, and environmental standards.
- Unlike traditional trade deals that primarily address tariffs, the IPEF seems to emphasize these broader aspects of economic integration.
IPEF’s four Pillars:
- Trade: This pillar focuses on facilitating trade and reducing barriers among the participating countries. While India has not joined the trade pillar, there may be pressure for it to do so.
- Supply Chains:This pillar aims to establish integrated and efficient supply chains within the participating countries. It likely involves promoting cooperation and coordination in areas such as logistics, infrastructure, and connectivity to facilitate smooth trade flows.
- Clean Economy: The clean economy pillar focuses on promoting sustainable development, environmental conservation, and green technologies. It likely involves commitments and cooperation to address climate change, reduce emissions, and promote clean energy and sustainable practices.
- Fair Economy:The fair economy pillar aims to establish a fair and level playing field for businesses and promote inclusive economic growth. It likely includes provisions related to competition policy, fair trade practices, and addressing inequalities within and among the participating countries.
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