The Indo-Pacific Economic Framework for Prosperity (IPEF), a U.S.-led initiative launched in May 2022, has made significant strides in fostering economic collaboration across the Indo-Pacific region. The recent developments in the IPEF, particularly in three of its four key pillars, mark a notable advancement in regional economic cooperation and sustainability.
Recent Developments
In November 2023, the IPEF partners, comprising 14 countries, reached substantial agreements on three pillars at a summit in San Francisco. The agreements cover Supply Chains, Clean Economy, and Fair Economy, leaving the Trade pillar still under negotiation. This progress, achieved during the Asia Pacific Economic Cooperation (APEC) leaders’ summit, demonstrates the commitment of participating nations to address key economic challenges collaboratively.
Supply Chains Pillar
Concluded in May 2023, the Supply Chains Pillar focuses on enhancing the resilience, efficiency, and security of supply chains. This pillar represents a collective effort to foster economic sustainability and prepare for future global economic challenges.
Clean Economy and Fair Economy Pillars
The Clean Economy Pillar, a recent addition, emphasizes accelerating research, development, and deployment of clean and climate-friendly technologies. This includes a significant investment, such as the $30 million “catalytic capital fund,” to aid in the development of clean energy solutions. The Fair Economy Pillar addresses anti-corruption measures and tax evasion, aligning with the United Nations Convention Against Corruption. It aims to establish legally binding and non-binding transparency norms in anti-corruption and tax administration laws, with a focus on capacity-building rather than traditional dispute settlement.
Management and Oversight
A newly created ministerial-level council will review and manage all four pillars of the IPEF, holding annual meetings. Additionally, a separate commission will focus on the Commerce-led pillars, ensuring continuous oversight and progress.
The IPEF represents a significant step towards strengthening economic ties and addressing contemporary challenges in the Indo-Pacific region. With the ongoing negotiations on the Trade pillar, the framework continues to evolve, reflecting the dynamic nature of global economic relations and the importance of collaborative and adaptive economic policies.
For more information, visit the following resources:
Indo-Pacific Economic Framework (commerce.gov)
Indo-Pacific Economic Framework for Prosperity (ustr.gov)