India joined the Indo-Pacific Economic Framework (IPEF)

In 2009, Barack Obama envisioned a trade pact in the Asia-Pacific through the Trans-Pacific Partnership (TPP) as part of his pivoting toward the region as well as a counter to China’s rising clout. However, the Trump administration in 2017 exited the trade pact holding that it is not in the interest of American workers. While the Biden administration didn’t join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) given domestic pressure not to yield market access through tariff cuts, it believes a trade bloc minus the tariff cuts in the Indo-Pacific region is a logical extension of the Quad formulation that also includes India, Australia and Japan. In many ways, IPEF is Biden’s TPP.

PEF proposes to have four pillars: Trade; supply chains; clean energy, decarbonisation and infrastructure; and tax and anti-corruption.

The member countries do not plan to begin negotiations for a trade pact immediately. They only promised to launch “collective discussions towards future negotiations” with the ambitious wish list.

A fact sheet released by the White House gave out more details about IPEF. “We will pursue high-standard rules of the road in the digital economy, including standards on cross-border data flows and data localisation. We will also seek strong labour and environment standards and corporate accountability provisions that promote a race to the top for workers through trade,” it said.

The proposed economic bloc has 13 members so far and more countries are expected to join. Apart from the four Quad members, IPEF includes Brunei Darussalam, Indonesia, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam.

IPEF gives India an opportunity to be part of the value chain in the Asia-Pacific region after it exited the RCEP trade deal at the last minute. It also takes care of India’s concern of China being part of RCEP as IPEF by design excludes China.