IPEF’s “flexible and inclusive” American design model; Delhi sees this positively

WashingtonThe United States views India’s participation in the Indo-Pacific Economic Framework (IPEF) as “very important”, views India as a “vital partner” in its economic engagement in the region, and has been “very actively engaged “with the Indian government. to answer questions about the framework, he told the Foreign Office. Washington is also designing a framework to prioritize “flexibility and inclusiveness,” and participating countries can join IPEF without having to adhere to the framework’s four pillars – a finicky arrangement that could leave the India more open to membership.

The four pillars of IPEF include fair and flexible trade (including digital standards, labor, environment, etc.); supply chain flexibility; infrastructure, decarbonization and clean energy; taxation and the fight against corruption. “We are still discussing the mechanics of the framework with our partners, but we have designed them to prioritize flexibility and inclusion. A State Department spokesperson answered a series of questions from HT.

India, for its part, sees the framework “from a positive perspective” and notes some similarities with regard to the pillars of supply chain resilience, but has sought flexibility in the framework to create incentives for countries to join, said a person familiar with the conversation on the subject. During his visit to Washington in April, Treasury Secretary Nirmala Sitharaman Describing IPEF as a “fantastic idea”, he said the United States had shared the framework with India, and Prime Minister Narendra Modi indicated it would be considered.

Naturally, India is concerned about some of the other pillars, especially trade, and their implications, and is working closely with various branches of the US government (Treasury, Commerce, State Department and National Security Council) to find out the details. of the frame. and what to expect. The government has also learned to be open to India joining the framework, subject to Cabinet approval, in a way that may require cooperation on some pillars, even if discussions on other pillars are continuing.

The United States seems open to such a mechanism. The State Department spokesperson, quoted above, said the United States expects discussions with regional partners over the coming months to focus on developing “common goals and tangible results”. Second, we expect conversations about the different units of this framework to move at different speeds. Through this process, we will pursue long-term goals while working to consolidate areas of cooperation that can be completed in the near future.

It is understood that Washington’s openness to what experts call a ‘pick and choose’ model in terms of choosing a few among all the pillars has been shaped by bilateral talks with India as well as consultations with other potential cadre members, and an effort is underway. is seeking to have New Delhi join IPEF as a founding member, possibly later this month.

While the State Department said the United States was “actively working to release the framework soon” without providing a timeline, Japanese Ambassador to the United States Koji Tomita said this week that the framework should be released. officially deployed when President Joe Biden was elected. to visit. in South Korea and Japan in the third week of May. Biden will also meet with other Quartet leaders, including Modi, in Tokyo on May 24. The international forum will also participate in discussions at a special summit between the United States and the Association of Southeast Asian Nations in Washington on Thursday and Friday.

Although the United States did not specify which countries could join the framework, Australia and Japan – two other Quartet countries and US treaty allies – are expected to join, along with Singapore, and possibly Korea. South and New Zealand. Discussions are also underway with various other Southeast Asian countries.

Rational and targeted

Amid criticism that the United States has been overshadowed by China’s aggressive economic and trade deals in the Indo-Pacific, and in a political climate where US involvement in trade deals is difficult to sell at home due to opposition from left and right, the Biden administration is working on IPEF to intensify its economic footprint, not particularly in the area of ​​normalization, as part of its Indo-Pacific strategy.

The State Department spokeswoman noted that the framework sets out a “positive and inclusive economic agenda” that will deepen U.S. engagement and coordination with its Indo-Pacific partners, “We envision the framework will address the areas of the economy that we urgently need as we work together to prepare our economy for the future.

Acknowledging that the heart of the framework is still being discussed with partners, the spokesperson said the United States hopes to use the IPEF “to establish standards that promote fair and open competition and inclusive growth for all.” our citizens, in particular our workers and the affected middle class. class.” The spokesperson said the United States has received “positive feedback” after initial discussions from partners who value IPEF as an initiative to strengthen its economy and competitiveness.

Central India

Regarding India’s role, the spokesperson said the United States’ partnership with India has been “critical” to making progress on “India’s clean energy and climate, pandemic response, supply chain diversity and resilience, new technologies, investment screening and other important areas.” IPEF. India is an important partner in our positive economic engagement in the region. We see India playing a key role in global efforts to develop a more diverse and resilient global supply chain.

Noting that the United States wants India to join the pillars of infrastructure, decarbonization and clean energy, the spokesperson said: “In addition, India’s clean energy transition is in the interest of the whole world, and we must help India achieve its ambitions. clean energy goals. announced by Prime Minister Modi during COP-26. We are already working with India and other partners to mobilize the financing and technology needed to achieve this goal. India has demonstrated its leadership in the area of ​​clean energy, notably through ambitious targets and the creation of the International Solar Alliance.

For all these reasons, the State Department said, the United States believes that India’s participation in IPEF will be “very significant.” “We have been actively working with the Indian government to answer their questions about the framework.”

No Indo-Pacific nation promises more as a U.S. economic partner than India, says Richard M. Russo, Wadhwani Chair in Native American Policy Studies at the Center for Strategic and International Studies and among leading experts in Native American economics. . Connections in Washington. So I am sure that the government will urge India to consider joining all the pillars. Whether Delhi accepts naturally depends on the content.”

Describing the “pick and choose” approach like a novel, Rousseau said he was eager to see how it turned out. “I think India’s involvement in multiple pillars is more likely than India’s engagement in a larger and more comprehensive trade deal.”

Diversity and sustainability

Asked about the extent to which the framework has guided the need to counter China’s economic centralization and what many see as predatory practices in the region, and whether the IPEF serves as an alternative, a spokesperson for the Department of State said the US view of the framework was positive and inclusive. This is intended to ensure the cooperation of the United States and its like-minded partners in the Indo-Pacific on key economic issues and emerging global economic challenges. “Our goal is to promote long-term inclusive growth and stability across the Indo-Pacific to support efforts to diversify economic growth.”

On whether the IPEF would be an effective tool to help the United States fill in the missing economic piece of its Indo-Pacific strategy, Rousseau said that with “half the publicity” for its content and ” only general standards,” it’s unclear “how deep or concrete IPEF will be.” Right now, the Biden administration appears to be building a plane in the air — in a bid to drum up interest for IPEF as it finalizes its content. But it’s hard to imagine a stronger package than the original free trade agreement.”

Russo added that he would prefer the United States to push to join the Comprehensive and Advanced Agreement for Trans-Pacific Partnership (CPTPP), and expand it if necessary. “Most of our main partners in the region have accepted these major trade agreements, which aim to unify their economies. However, India is not a member of the CPTPP. Neither have Korea, Indonesia and other major trading partners in the region. It must therefore be expanded to truly fulfill its promise. Indo-Pacific Economic Cooperation”.

In response to criticism that IPEF is a poor alternative to a trade deal, a State Department spokesperson said the United States recognizes the “inevitability” of “engaging in the region,” but also stressed the importance of continuity, in what appears to be an indication of political concern in the United States and the region. We believe this framework will only work if it continues. We know that to ensure its sustainability, it must reflect the long-term interests of the United States and our like-minded Indo-Pacific partners. »

Cheryl Tenny

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