News Highlight
India has opted out of the trade pillar of the 14-member Indo-Pacific Economic Framework (IPEF).
Key Takeaway
- All the other 13 Indo-Pacific Economic Framework for Prosperity countries have joined the four pillars of IPEF.
- Trade
- Supply chains
- Clean economy
- Fair Economy
The Indo-Pacific Economic Framework (IPEF)
- It was launched by the United States (US) President in Tokyo in 2022.
- The IPEF was launched with a dozen initial partners representing 40% of the world’s GDP.
- It aims to strengthen economic partnerships among participating countries to enhance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness in the Indo-Pacific region.
- The 13 members of IPEF are
- Australia
- Brunei
- Fiji
- Indonesia
- Japan
- Korea
- Malaysia
- New Zealand
- The Philippines
- Singapore
- Thailand
- Vietnam
- The US.
Need of the IPEF
- Focus on the Indo-Pacific:
- It is a declaration of a collective desire to make the Indo-Pacific region an engine of global economic growth.
- Connect with ASEAN:
- A positive impact on the furtherance of the Indo-Pacific Economic Corridor is the move toward establishing the ASEAN Economic Community.
- Supply Chain Resilience:
- The flexibility of the framework and the focus on supply chains are probably two areas that make the framework attractive to its members.
- Climate Change:
- In line with the Paris Agreement’s goals and efforts to support the livelihoods of people and workers, it plans to accelerate the development and deployment of clean energy technologies to decarbonise our economies and build resilience to climate impacts.
- A challenge to China:
- IPEF appears to challenge China’s unilateral Belt and Road Initiative by creating a regional alternative to Chinese predatory economics.
- For example, the IPEF mainly concerns China’s claims over the territorial disputes in the South China Sea.
- Crisis Management:
- The emphasis in IPEF is on preparing for the economic crisis.
- The COVID pandemic has disrupted many sectors of the global economy and, hence working with like-minded countries in a rules-based order strengthens members’ competitiveness.
- Reduce Chinese Dependency:
- The IPEF can consider members as alternative sources for its raw material requirements.
- For example, Malaysia could increase the supply of chips.
Pic Courtesy: Kalinga TV
Content Source: The Prinit