India and 12 countries led by the US launched the Indo-Pacific Economic Framework (IPEF) in Tokyo on May 23, 2022 .
Key highlights
- The IPEF aims to strengthen economic partnership among participating countries to enhance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness in the Indo-Pacific region.
- India signalled its readiness to be part of this new economic initiative led by the U.S. for the region. Currently, Australia, Brunei, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, the US and Vietnam are included in this group.
- Three ASEAN countries considered closer to China — Myanmar, Cambodia and Laos — are not members of the IPEF.
- The grouping, which includes seven out of 10 members of the Association of South East Asian Nations (ASEAN), all four Quad countries, and New Zealand, represents about 40% of global GDP.
- U.S. officials made it clear that the IPEF would not be a “free trade agreement”, nor are countries expected to discuss reducing tariffs or increasing market access. In that sense, the IPEF would not seek to replace the 11-nation CPTPP (Trans-Pacific Partnership) that the U.S. quit in 2017, or the RCEP, which China, and all of the other IPEF countries (minus the U.S.) are a part of.
- The framework will focus on four key pillars to establish high-standard commitments that will deepen our economic engagement in the region: Connected Economy, Resilient Economy, Clean Economy and Fair Economy.
- U.S. President Joe Biden has said tackling inflation is a priority and this framework is designed to help lower costs by making supply chains more resilient in the longer term.
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