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IPEF Negotiations

  • May 17, 2023
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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IPEF Negotiations

Subject : International Relations

Section: International Groupings

Indo-Pacific Economic Framework (IPEF) is a US led trade agreement for which negotiations are in the 3rd round, with 14 participating countries which includes Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and Vietnam

Negotiation heads: 4 heads namely, Trade, Supply chains, clean economy and fair economy. Below are the head wise issues that India should keep in mind while negotiating.

  1. TRADE: WTO plus approach with US practices in digital trade, labour, environment, agriculture etc forming the basis.
    1. Digital Trade: With virtual space becoming the important for most business activity, government should ensure ownership of national data and not allow BIgTech to have unfair control. India should avoid binding commitments like made with Information Technology Agreement (ITA) 1 which locked India out of electronic manufacturing. Should promote local firms by giving favorable access to data. Not adopt US Artificial Intelligence models as they have biases in-built that may not suit local needs.
    2. Labour Standards: India should avoid US-Mexico style provisions that by mandating minimum wage discourage export of labour intensive products.
    3. Environment standards: India cannot afford to price carbon at the same rate as US, as this will make energy very expensive and thus make our exports uncompetitive.
    4. Agriculture: Not allow GM crops in the name of food security, as most of these are heavily subsidised by countries like the US. Avoid seed monopoly of GM firms. Farmer’s right to reproduce and exchange seeds should be ensured.
    5. Transparency and good regulatory practices: in name of transparency India should not give up regulatory and policy autonomy.
    6. Inclusivity and gender: India should use women and MSME participation to get concessions in government procurement.
  2. SUPPLY CHAINS: Not agree to stop using export restriction clause, as domestic concerns should determine such decisions.
  3. CLEAN ECONOMY: Not agree to non-derogation clause (non derogation – must be followed no matter what). Should say no to minimum standards for domestic market.
  4. FAIR ECONOMY: With India already having undertaken several anti-corruption obligations, we should say no to any legally enforceable norms.
GIST of any FTA negotiation with the developed country

  • Settle issues at domestic level before undertaking international obligations.
  • Should not allow standalone obligations like ILO, COP26 to be made part of FTAs like IPEF.
  • Should resist provisions that undercut, our competitive advantage or that undermine our policy autonomy.
  • India needs to urgently set up rules/standards in all areas of negotiations at domestic level, so as not to be made to say yes to provisions of IPEF and FTA with EU, UK.
International Relations IPEF Negotiations

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