IPEF Overview
The Indo-Pacific Economic Framework for Prosperity (IPEF) was announced by President Biden in Tokyo in May 2022, alongside the leaders of 12 other Indo-Pacific nations that will participate in IPEF discussions. Fiji has subsequently joined the discussions, taking the number of IPEF partners to 14, including the United States.
The IPEF is not a trade agreement in the traditional sense but rather an arrangement for the Indo-Pacific region that aims to improve trade, supply chains, clean energy, and governance.
Although the IPEF will be negotiated among members, it is unlike other trade agreements in that market access – e.g., tariff reductions – are not part of the negotiations.
The Biden administration has proposed four pillars for member cooperation: fair and resilient trade; supply chain resilience; infrastructure, clean energy, and decarbonization; and tax and anti-corruption.
The trade pillar will be negotiated under the auspices of the Office of the U.S. Trade Representative (USTR). The remaining pillars will fall under the Department of Commerce. Prospective members may participate in any number of the pillars, but they must accept the trade pillar negotiations wholesale, as per a conventional agreement.
At this stage, the negotiating scope for the trade pillar is likely to include: labor; environment; the digital economy and emerging technologies; agriculture; transparency and good regulatory practices; competition policy; trade facilitation; gender; indigenous populations; and development and economic cooperation.
US President Joe Biden, Indian Prime Minister Narendra Modi and Japanese Prime Minister Fumio Kishida attend the Indo-Pacific Economic Framework (IPEF) launch event at Izumi Garden Gallery in Tokyo, Japan, on May 23. Photo: Reuters
The Four IPEF Pillars
1. Fair & Resilient Trade
The trade pillar will be negotiated by USTR and is expected to include the following chapters: labor, environment and climate, the digital economy, agriculture, transparency and good regulatory practices, competition policy, and trade facilitation. The digital economy chapter will be co-negotiated by the Department of Commerce.
In announcing the IPEF in May, the White House noted:
“We seek to build high-standard, inclusive, free, and fair trade commitments and develop new and creative approaches in trade and technology policy that advance a broad set of objectives that fuel economic activity and investment, promote sustainable and inclusive economic growth, and benefit workers and consumers. Our efforts include, but are not limited to, cooperation in the digital economy.”
2. Supply Chain Resiliency
The supply chain pillar will be negotiated by the U.S. Department of Commerce. In announcing the IPEF in May, the White House said this about IPEF’s supply chain pillar:
“We are committed to improving transparency, diversity, security, and sustainability in our supply chains to make them more resilient and well-integrated. We seek to coordinate crisis response measures; expand cooperation to better prepare for and mitigate the effects of disruptions to better ensure business continuity; improve logistical efficiency and support; and ensure access to key raw and processed materials, semiconductors, critical minerals, and clean energy technology.”
3. Clean Energy, Decarbonization, and Infrastructure
The clean energy, decarbonization, and infrastructure pillar will be negotiated by the U.S. Department of Commerce. In announcing the IPEF in May, the White House had this to say about this pillar:
“In line with our Paris Agreement goals and efforts to support the livelihood of our peoples and workers, we plan to accelerate the development and deployment of clean energy technologies to decarbonize our economies and build resilience to climate impacts. This involves deepening cooperation on technologies, on mobilizing finance, including concessional finance, and on seeking ways to improve competitiveness and enhance connectivity by supporting the development of sustainable and durable infrastructure and by providing technical assistance.”
4. Taxation and Anti-Corruption
The taxation and anti-corruption pillar will be negotiated by the U.S. Department of Commerce. In announcing the IPEF in May, the White House had this to say about the taxation and anti-corruption pillar:
“We are committed to promoting fair competition by enacting and enforcing effective and robust tax, anti-money laundering, and anti-bribery regimes in line with existing multilateral obligations, standards, and agreements to curb tax evasion and corruption in the Indo-Pacific region. This involves sharing expertise and seeking ways to support capacity building necessary to advance accountable and transparent systems.”
14 Economies
United States of America
Australia
Brunei
Fiji
India
Indonesia
Korea
Japan
Malaysia
New Zealand
Philippines
Singapore
Thailand
Vietnam