25 May India signs up for 13-nation Indo-Pacific economic framework
India signs up for 13-nation Indo-Pacific economic framework – Today Current Affairs
CONTEXT
India, along with 12 other countries joined the Indo Pacific Economic Framework (IPEF) that seeks to establish a trading bloc in the region led by the United States. This is the first plurilateral deal that India has agreed to join after exiting the Regional Comprehensive Economic Partnership (RCEP) deal at the last minute in 2019.
Today Current Affairs
Members of Indo Pacific Economic Framework (IPEF)
United States of America (USA), India, Australia and Japan Brunei Darussalam, Indonesia, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam
What does IPEF intend to do? The Hindu Analysis
IPEF proposes to have four pillars: Trade; supply chains; clean energy, decarbonization and infrastructure; and tax and anti-corruption. Under the trade pillar, IPEF seeks to build “high-standard, inclusive, free and fair trade commitments”. The supply chain pillar is meant to ensure access to key raw and processed materials, semiconductors, critical minerals and clean energy technology for member countries. “Clean Energy, decarbonization and infrastructure” involves mobilizing finance, including concessional finance, and enhancing connectivity by supporting the development of sustainable and durable infrastructure. The tax and anti-corruption pillar seeks to promote fair competition by enacting and enforcing tax, anti-money laundering, and anti-bribery regimes in line with existing multilateral obligations to curb tax evasion and corruption in the Indo-Pacific region. The Hindu Analysis
IPEF will also be employed to curtail much needed efforts for digital industrialisation and sovereignty of countries, and herald a new era of digital colonialism.
“The IPEF cannot meet its claimed goals of improving workers’ rights and environmental standards without a far more transparent process with genuine involvement of unions, environment groups and other civil society groups. It will certainly not meet such goals if it is modelled on the TPP…”,
What is India’s position on IPEF? The Hindu Analysis
On the face of it, India has welcomed IPEF. At the IPEF launch, Modi said India would work with other members to build an “inclusive and flexible” IPEF. “The Indo-Pacific Economic Framework is a declaration of our collective will to make the region an engine of global economic growth. I believe that there should be three main pillars of resilient supply chains: Trust, transparency and timeliness. I am confident that this framework will help strengthen these three pillars, and pave the way for development, peace and prosperity in the Indo-Pacific region,” Modi said, without mentioning the other three pillars of the proposed trade deal.
Will IPEF be beneficial for India? The Hindu Analysis
IPEF gives India an opportunity to be part of the value chain in the Asia-Pacific region after it exited the RCEP trade deal at the last minute. It also takes care of India’s concern of China being part of RCEP as IPEF by design excludes China. However, the agenda of IPEF poses significant challenges to India’s stated position. On issues like digital commerce, labour and environmental standards, India and the US have diametrically opposite views. India strongly resists putting such standards in any of the free trade agreements it signs. India didn’t join the Osaka Track on the digital economy at the G20 leaders’ summit in 2019 as it remains reluctant on setting global rules on e-commerce, holding that this may deny policy space to developing countries to expand their nascent e-commerce sector. India has also been strongly advocating data localization because of its perceived economic benefits and protection of personal data for national security reasons and law enforcement purposes.
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