Facts for Prelims (FFP)
Source: PIB
Context: The second Indo-Pacific Economic Framework for Prosperity (IPEF) Ministerial Meeting concluded with successful negotiations under the Supply Chains (Pillar II) and good progress in the other pillars.
About IPEF:
| IPEF Dimensions | Details |
| About | IPEF is a US-led framework for 14 participating countries to solidify their relationships and engage in crucial economic and trade matters that concern the region. |
| Launch | Launched by US President Joe Biden in May 2022 |
| Founding Members | 14 participating founding member nations in the Indo-Pacific region (with an open invitation for other countries to join): The United States, India, Australia, Brunei, Fiji, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and Vietnam. |
| Significance | IPEF members represent 40% of the global GDP and 28% of the world’s trade |
| Pillars of IPEF | |
| Pillar I (Trade) | Enhancing economic engagement, trade agreements, and market access among IPEF member countries. |
| Pillar II (Supply Chains) | Making supply chains more resilient, robust, and well-integrated through crisis response measures, cooperation, logistics and connectivity, and promotion of investments. |
| Pillar III (Clean Economy) | Advancing cooperation on research, development, commercialization, availability, and deployment of clean energy, regional hydrogen initiatives, and climate-friendly technologies. |
| Pillar IV (Fair Economy) | Strengthening implementation of effective anti-corruption and tax measures to boost commerce, trade, and investment among IPEF economies. |
| India’s Participation | Joined Pillars II to IV; Undecided on joining the trade pillar |
| Comparison to TPP | TPP is a trade agreement negotiated among 12 Pacific Rim countries, including the US, Canada, Japan, Australia, and others, with the aim to establish a comprehensive trade and investment framework. US withdrew from TPP in 2017. |
| Comparison with Regional Comprehensive Economic Partnership (RCEP) | RCEP is the trade deal between the 10-member Association of Southeast Asian Nations (ASEAN) and China, Japan, South Korea, Australia, and New Zealand. India participated in RCEP discussions but chose to opt out. |
| Issues with IPEF | Dependence of participating countries on China, Centrality of SEA, Potential non-starter, Taxation issues, Lack of common grounds for countries |
| Reasons for India’s Participation | Being part of a multilateral forum, the Advantages of China |
| Recommendations | Learn from Japan, Establish Common Standards, Streamline Taxation Issues, Address Tech-related Issues, Simplify Trade Negotiations |
