Suhasini Haidar New Delhi
India signalled its readiness to be part of a new economic initiative led by the U.S. for the region, as Prime Minister Narendra Modi joined U.S. President Joseph Biden, Japanese Prime Minister Fumio Kishida and leaders of 10 countries, who participated virtually, for the launch of the Indo-Pacific Economic Framework for Prosperity (IPEF) in Tokyo on Monday. The negotiations for the IPEF, which will begin on Tuesday, are expected to centre around four main pillars, including trade, supply chain resiliency, clean energy and decarbonisation, and taxes and anti-corruption measures. The grouping, which includes seven out of 10 members of the Association of South East Asian Nations (ASEAN), all four Quad countries, and New Zealand, represents about 40% of global GDP.
“India will work together with [other IPEF countries] to build an inclusive and flexible Indo-Pacific Economic Framework,” Mr. Modi said at the launch of the new initiative, that comes three years after India walked out of the 15-nation RCEP (Regional Comprehensive Economic Partnership).
“I believe that resilient supply chains must be based on three-pillar foundation of trust, transparency and timeliness and I am sure that this framework will make these pillars strong and lead to peace and prosperity in the Indo-Pacific region,” he added.
U.S. officials made it clear that the IPEF would not be a “free trade agreement”, nor are countries expected to discuss reducing tariffs or increasing market access. In that sense, the IPEF would not seek to replace the 11-nation CPTPP (Trans-Pacific Partnership) that the U.S. quit in 2017, or the RCEP, which China, and all of the other IPEF countries (minus the U.S.) are a part of. Three ASEAN countries considered closer to China — Myanmar, Cambodia and Laos — are not members of the IPEF, however.
Briefing the media, U.S. Commerce Secretary Gina Raimondo said that the U.S. would seek to attract businesses investing in China away towards IPEF. “I would say, especially as businesses are beginning to increasingly look for alternatives to China, the countries in the Indo-Pacific Framework will be more reliable partners for U.S. businesses.”
US Trade Representative (USTR) Katherine Tai also said that the IPEF would be different from the original Trans-Pacific partnership as the U.S. was “unable to deliver on the plan”, indicating hurdles in the U.S. Congress, where any trade concessions are seen in an increasingly unfavourable light.
U.S. National Security Advisor Jake Sullivan also said that the IPEF was intended to boost U.S. manufacturing. “The Indo-Pacific Economic Framework, or IPEF, is part of President Biden’s commitment to putting American families and workers at the centre of our economic and foreign policy, while strengthening our ties with allies and partners for the purpose of increasing shared prosperity,” Mr. Sullivan said.
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