Indo-Pacific Economic Framework (IPEF)
- May 23, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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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.