Indo-Pacific Economic Framework for Prosperity (IPEF)

About Indo-Pacific Economic Framework for Prosperity (IPEF)

• It is a regional arrangement to build cooperation and economic integration in the Indo-Pacific region.
• It was launched by United States President Joe Biden on May 23, 2022.
• This framework is intended to advance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness for member economies.
• IPEF will seek to complement and build on existing regional architecture and support the global rules-based trading system.
• It currently includes 14 partner countries: Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the United States, and Vietnam.
• The economic framework broadly rests on four pillars:
  • Trade
  • Supply chain resilience
  • Clean Energy, Decarbonization, and Infrastructure
  • Taxes and anti-corruption measures
• The IPEF is not a Free Trade Agreement (FTA), but allows members to negotiate the parts they want to.
• Indian and IPEF:
  • India has been actively participating in the IPEF, but not in all pillars.
  • India has decided to opt out of the trade pillar of the IPEF as most issues promoted by the IPEF do not align with India's trade policies.

Q1) What is a Free Trade Agreement (FTA)?

A free trade agreement is a pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.

Source: IPEF inks deal to boost supply chain