India and 11 other countries join US-led new Indo-Pacific trade pact

President Joe Biden launched a new trade pact — the Indo-Pacific Economic Framework for Prosperity (IPEF) — along with 12 other countries that will enable United States to work more closely with Asian economies on issues including supply chains, digital trade, clean energy and anti-corruption efforts.

The signatories joining the US in the IPEF, viewed as a “21st century economic arrangement”, are Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. Along with the United States, these economies represent 40 per cent of the world GDP.

According to a press release issued by the White House, IPEF will enable the US and their allies to decide on rules of the road that ensure American workers, small businesses, and ranchers can compete in the Indo-Pacific. And the signatory governments are expected to harness “transformations afoot in the clean energy, digital, and technology sectors” — while fortifying their economies against a range of threats, from fragile supply chains to corruption to tax havens.

The past models of economic engagement had never managed to address these challenges, said the press release.

Further, a joint statement from the countries in this new trade pact added that this will help them collectively to prepare their economies for the future after disruptions from the coronavirus pandemic and the Russian invasion of Ukraine.

Also read: China ‘eroding’ Indo-Pacific security: US defense secretary

Detractors however pointed out that the IPEF doesn’t offer lower tariffs to their partners or provide the signatories with any significant greater access to US markets. These drawbacks may not make the US framework an attractive alternative to the Trans-Pacific Partnership (TPP), which had continued even after the US bailed out.

Biden first spoke about the IPEF at the October 2021 East Asia Summit, where he said that the “United States will explore with partners the development of an Indo-Pacific economic framework that will define our shared objectives around trade facilitation, standards for the digital economy and technology, supply chain resiliency, decarbonization and clean energy, infrastructure, worker standards, and other areas of shared interest”.

The Biden Administration, which is trying to gain credibility in the region after Donald Trump pulled out of the TPP, is projecting IPEF as the new US vehicle for re-engagement with east Asia and south east Asia.