US hopes to start trade talks under IPEF to fuel economic activity

The 14 members of the Indo-Pacific Economic Framework (IPEF) held their first informal meeting in Paris, with the US hoping to start negotiations on the trade pillar that would include contentious issues such as labour and environmental standards.

While United States Trade Representative (USTR) Katherine Tai chaired the meeting on Saturday, India’s trade minister Piyush Goyal could not attend as he was on his way to Geneva for the World Trade Organisation (WTO) 12th Ministerial Conference (MC12). India was represented at the meeting by the additional secretary in the Ministry of Commerce and Industry Amit Yadav. A senior government official, under the condition of anonymity, said it was too early for India to comment on whether it would join the negotiations on the trade pillar or not.

Last month, India joined 13 other countries to establish the IPEF, led by the US to counter China’s growing clout in the Indo-Pacific region. The other countries that joined the IPEF are Australia, Brunei, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, Vietnam and Fiji.

After the meeting, USTR Tai in a statement on Sunday said the US looked forward to launching negotiations under the trade pillar, which would help fuel economic activity and investment, promote sustainable and inclusive economic growth, and benefit workers and consumers across the region. 

The joint statement released last month talked about four pillars of the IPEF: Trade; supply chains; clean energy, decarbonisation and infrastructure; and tax and anti-corruption.

Tai hoped the US and the IPEF partners that choose to join the trade pillar “will 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 related to: labour; environment; the digital economy; agriculture; transparency and good regulatory practices; competition policy; and trade facilitation.”

The IPEF gives India an opportunity to be part of the supply chain in the Asia-Pacific region after it exited the Regional Comprehensive Economic Partnership (RCEP) trade deal at the last minute. It also takes care of India’s concern about China being part of the RCEP, as the IPEF, by design, excludes China.

However, on issues such as digital commerce, labour, and environmental standards, India and the US have contrasting views. India strongly resists putting such standards in any of the free trade agreements it signs. India didn’t join the Osaka track on the digital economy at the G20 leaders’ summit in 2019, as it remains reluctant on setting global rules on e-commerce, holding that this may deny policy space to developing countries to expand their nascent e-commerce space.

Speaking at the launch event in Tokyo last month, Indian Prime Minister Narendra Modi had said that India would work with other members to build an “inclusive and flexible” IPEF, highlighting the supply chain pillar. “The Indo-Pacific Economic Framework is a declaration of our collective will to make the region an engine of global economic growth. I believe that there should be three main pillars of resilient supply chains: Trust, transparency, and timeliness. I am confident that this framework will help strengthen these three pillars, and pave the way for development, peace, and prosperity in the Indo-Pacific region,” Modi said, without mentioning the other three pillars of the proposed trade deal.