IPEF negotiating objectives announced as India opts out of trade pillar

September 12, 2022: Trade ministers from the 14 countries involved in the Indo-Pacific Economic Forum met in Los Angeles on Friday and published a more detailed statement of the negotiating objectives for the four pillars which aim to form a framework for trade and investment in the region.  

The governments involved are the United States, Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand and Vietnam.

IPEF is an initiative of the US Biden administration mainly motivated by strategic competition with China in the region, and by US domestic politics. The US is not part of the two big existing legally binding regional trade agreements. These are the Regional Comprehensive economic Partnership (RCEP) of the ten ASEAN countries plus five other countries, and the Comprehensive and Progressive Agreement on Trans-Pacific Partnership  (CPTPP) of 11 Pacific Rim countries. There is bipartisan US Congressional opposition to legally binding trade agreements.

IPEF aims for a trade and investment framework for US-aligned countries in the region, without legally binding access to US markets. The four pillars of this framework were clarified as:

  • Trade (Including labour and environment standards, agriculture and digital trade)
  • Supply chains between IPEF partners, increased security and resilience (implying less dependence on China)
  • Clean economy: cooperation on clean energy and climate-friendly technologies, enhance energy security and reduce overall greenhouse gas emissions
  • Fair Economy:  level the playing field by combatting corruption, curbing tax evasion, and enhancing transparency, recognizing the importance of fairness.

Governments can opt to join or not join each of the four pillars, but if they opt in, it appears that they must agree to all aspects of each pillar. India has opted out of the trade pillar. It is not clear how the development needs of lower-income countries will be considered, although there may be offers of aid projects. For example, big tech companies have offered digital training for women.

It is still unclear how commitments made in each pillar will be legally enforceable. The statement mentions the need for consultations with business, unions and civil society groups, but so far only business has been involved.

Before the meeting 46 civil society organisations including AFTINET called for transparency and participation for a new trade model that prioritizes the interests of working people, as well as the environment, consumers, family farmers and indigenous peoples instead of just big corporations. There was also a rally of unions and civil society groups held outside the meeting. See photos here.

Further negotiations on the content of each pillar will begin soon and the next meeting of trade ministers is scheduled for early 2023. AFTINET will continue to monitor the negotiations and ask the Albanese government to implement its policy of a more transparent and democratic process.

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