Indo-Pacific Economic Framework introduces four economic 'institutional' realities to region
May 30, 2022
Washington [US], May 30 : The US initiated Indo-Pacific Economic Framework (IPEF) which includes the US, India, and 11 other Asian countries seems to be centred around four pillars -- connected economy; resilient economy; clean economy and fair economy - and may finally introduce institutional reality to the region with regional sensibilities.
Though the initiative is still thin on details, it seems to be focusing on these four pillars. The first pillar - connected economy - is speculated to lay more stress on the digital economy. The recently released factsheet on this new framework suggests that IPEF will contain most of the elements in the US Trans-Pacific Partnership Agreement (TPPA).
The second pillar touches on supply chains and the need for commitments and implementable measures to "anticipate and prevent disruptions in supply chains," reported Asia Times.
However, it is significant to note that if this second pillar is directed against China, it will impact the region's supply chain networks. China is a major trade partner in the Indo-Pacific region and keeping the IPEF objectives against China is not something that is likely to be witnessed in the IPEF framework, as per the media outlet.
Therefore, it would be "inconceivable" to imagine that these governments sign such pledges against China.
Next, the third pillar is the grouping climate policy. In the IPEF framework, elements of Biden's Build Back Better World (B3W) initiative could be seen. The B3W initiative aims to establish a modern, sustainable and clean economy that could be visible in the IPEF.
The final pillar is "fair economy". It is suspected that this will include anti-corruption provisions. This is to lay emphasis on "tax, anti-money-laundering, and anti-bribery regimes". These provisions were also a part of TPPA commitments and obligations.
Though India has joined the Indo-Pacific Economic Framework (IPEF) alongside 11 Asian nations and the US to counter China's economic dominance in the region, this new framework needs to create the confidence that this multilateral economic cooperation could also benefit India by helping the country reduce its economic dependence on China.
This framework must set in motion supply chain diversification at the earliest. Right now, as it stands, the initiative is thin on details. The IPEF, a US-initiated framework, needs more clarity and a concrete plan for economic engagement among its members, reported a US-based media outlet, The Diplomat.
"We'll do that by taking out some of the most acute challenges that drag down growth and by maximising the potential of our strongest growth engines," said Biden at the Indo-Pacific Economic Framework event in Japan.
This Biden-led initiative saw the participation of Prime Minister of Japan Kishida Fumio, as well as the virtual presence of leaders of other partner countries viz. Australia, Brunei, Indonesia, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and Vietnam.
The Biden administration has yet to provide many details on the criteria for the new economic framework.
Quad Summit held in Tokyo has provided an opportunity for the Leaders to exchange views about developments in the Indo-Pacific region and contemporary global issues of mutual interest.
Prime Minister Anthony Albanese of Australia, Prime Minister Narendra Modi of India, Prime Minister Fumio Kishida of Japan, and President Joe Biden of the United States discussed the issues related to the Indo-pacific region besides other global and regional issues.
