Indo-Pacific Economic Framework (IPEF)

Subject: International relations

Section: International Organisation

Concept

The Indo-Pacific Economic Framework is a new kind of trade agreement that the US is seeking to push among countries of the region.
It is based on 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 IPEF is not a traditional trade agreement. Rather, it would include different modules covering fair and resilient trade, supply chain resilience, infrastructure and decarbonization, and tax and anticorruption.
The IPEF will not include market access commitments such as lowering tariff barriers, as the agreement is “more of an Administrative arrangement”, and Congressional approval, which is a must for trade agreements, is not mandatory for this.
The IPEF is also seen as a means by which the US is trying to regain credibility in the region after the US withdrew from the Trans Pacific Partnership (TPP).
But IPEF may not enthuse all countries in the Indo-Pacific region equally as it comes with binding trade rules but no guarantees on market access.

India’s position

India has a problem with some of the provisions.
Amongst these are the prohibition / restrictions on cross-border data flows and data localization requirements, including for financial services; the prohibition of the levying of customs duties on digital products distributed electronically; promotion of the interoperability of privacy rules and related enforcement regimes.