US President Joe Biden, who set off Friday on a trip to East Asia that will see him arrive first in Seoul and in Tokyo on Sunday ahead of a Quartet summit on May 24, is expected to launch his much-discussed economic framework for the Indo-Pacific (IPEF). ) in the Japanese capital with Prime Minister Kishida Fumio.
Biden first spoke of the IPEF at the East Asia Summit in October 2021, where he said, “The United States will explore with partners the development of an Indo-Pacific economic framework that will define our common goals around trade facilitation, digital economy standards, technology, supply chain resilience, decarbonization and energy cleanliness, infrastructure, labor standards, and other areas of common interest.”
According to a research paper on IPEF presented by the US Congressional Research Service in February, the IPEF is not a traditional trade agreement. Rather, it will include various modules covering “fair and flexible trade, supply chain resilience, infrastructure and decarbonization, taxation and anti-corruption.” Countries will have to subscribe to all components inside the module, but they don’t have to subscribe to all modules. The US Trade Representative will lead the “Fair and Flexible Trade” unit and include digital, labor and environmental issues, with some binding commitments. The IPEF will not include market access commitments such as lowering tariff barriers, as the agreement is “more than an administrative arrangement”, and congressional approval, which is a must for trade agreements, is not mandatory for it.
The IPEF is also seen as a means by which the United States is trying to restore its credibility in the region following the withdrawal of former President Donald Trump from the Trans-Pacific Partnership (TPP). Since then, there has been concern about the lack of a credible US economic and trade strategy to counter Chinese economic influence in the region. China is an influential member of the TPP, and has sought membership in the agreement left over from the Comprehensive and Advanced Agreement on the Trans-Pacific Partnership. It is also a member of the 14-nation Regional Comprehensive Economic Partnership, of which the United States is not (India withdrew from the RCEP). The Biden administration anticipates IPEF as the new US vehicle for re-engagement with East Asia and Southeast Asia.
Earlier this week, US National Security Adviser Jake Sullivan called it “an economic arrangement for the 21st century.” But the IPEF may not excite all countries in the Indo-Pacific region equally because it comes with binding trade rules but no guarantees of market access. Japan welcomed the forum, and Thailand announced earlier this week that it would join the negotiations. Australia and New Zealand may also join. South Korea, the Philippines and Singapore have shown cautious interest.
Japanese news organization Nikkei described it as a “more elaborate mechanism.” [than a free trade agreement] Seeking the benefits of trade partnerships while insulating Americans from the downsides of trade liberalization.”
Biden is expected to invite India to join the forum’s negotiations when he meets Prime Minister Narendra Modi on the sidelines of the Quartet summit. India is the only member of the pool that has not said anything about it.
On Thursday, when asked about the possibility of India joining the IPEF, Ministry of External Affairs spokesperson Arindam Bagshi said: “This is an initiative of the United States. We have received the details of this. We are checking it out.”
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In a paper titled “Decoding the IPEF” in March of this year, Prabir De of the Research and Information System for Developing Countries, a think tank in the Middle East and Africa, wrote that India “may also be uncomfortable with high US standards, wanting to avoid risks” and” It may take time to consider joining, if an invitation to join the IPEF is extended by the Biden administration.”
According to Dee, “Some of the areas proposed in the IPEF do not appear to serve India’s interests. For example, the IPEF talks about digital governance but the wording of the IPEF contains issues that directly contradict India’s stated position. Among them are the bans/restrictions on cross-border data flows and requirements for data localization, including financial services; prohibiting the imposition of tariffs on digital products distributed electronically; promoting the interoperability of privacy rules and related enforcement systems, such as the Asia-Pacific Economic Cooperation (APEC) Cross-Border Privacy Rule, while respecting laws and regulations Federal and US Privacy”.