As part of the hyperactive senior-level and ministerial-level talks launched during US President Joe Biden’s visit to Japan in May, the United States is hosting the first in-person ministerial meeting of signatory states to the “Indo-Pacific Economic Framework”. on Thursday and Friday.
Led by U.S. Trade Representative Katherine Tai and Secretary of Commerce Gina Raimondo, the past three months have seen several such online and hybrid meetings aimed at “delineating” “arrangements” for the four pillars of IPEF – trade rules, clean energy, supply chains and taxation and anti-corruption.
Despite the speed, the IPEF remains a work in progress and no joint statement has so far spelled out what it has achieved. The United States, meanwhile, wants to finalize the basic principles of IPEF before hosting the APEC leaders’ meeting in November 2023.
But the 18 months between May 2022 and November 2023 are not his only challenge.
For starters, India has already emerged as a country of concern, sparking speculation about its possible exit from IPEF. India’s refusal to denounce Russia’s ‘special military operation’ in Ukraine and the increase in Russian oil imports over the past six months have revealed growing disjunctures that could prevent India from becoming a member. standing of the group.
India’s case also brought to light similar palpable disjunctions between the United States and other IPEF signatory states. In fact, India’s last-minute decision to withdraw from the world’s largest free trade agreement – the Regional Comprehensive Economic Partnership Agreement – in 2019 heightens concerns about India’s choice to make even with IPEF. And the fact that India only joined the IPEF trade talks as an “observer” in August adds more credence to such speculation.
Additionally, India has recently embarked on a wave of trade deal signings. He has signed trade agreements with Australia and the United Arab Emirates, and he is rapidly advancing negotiations with Canada, Israel, the European Union and the United Kingdom. Yet the India-US free trade agreement remains in suspended animation with implications for India permanently joining the US-led IPEF.
The flexibility of the IPEF described in Tokyo may have led New Delhi to align itself with it. The IPEF has been touted as a framework to “advance resilience, sustainability, inclusiveness, economic growth, equity and competitiveness” by creating flexible arrangements where member states are free to join or not joining initiatives under any of the stipulated pillars, and both pillars and membership could be expanded beyond the original four and 14.
Like RCEP, IPEF should not be another free trade agreement involving tariff reductions, improved market access or dispute resolution mechanisms. But now that having gone from a lofty vision to a mundane reality, plans to create a regulatory mechanism, build alternative supply chains and fight corruption if necessary, India could face some of RCEP’s old challenges.
In addition, awareness of the infrastructure and connectivity deficit among “Indo-Pacific” countries has been heightened, particularly due to the formation of the US-led Trans-Pacific Partnership under the administration of Barack Obama and how he was abandoned by the previous US president. Donald Trump in 2017. Meanwhile, over the past five years, several of these countries have aligned themselves with China’s proposed Belt and Road Initiative.
This makes IPEF’s vision too China-centric, which will make it extremely difficult, if not impossible, for member states to choose sides in the event of a blow. China not only helped establish the Asian Infrastructure Investment Bank, which now has 105 member economies and has become the new standard bearer of economic globalization and technically the “leader” of the most the world’s largest FTA, the RECP, it has also applied to join the The Reincarnation of the TPP — the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
This is where India’s parallel engagement with China and the United States also complicates its negotiations within the IPEF. China remains a close competitor to the United States and yet it is India’s biggest trading partner and biggest investor. This prompted American interlocutors to see patterns where none exist. For example, in the wake of continued border clashes with China, why did India refuse to accept US mediation?
Additionally, the India-US trade partnership has been hiccuping, with India insisting on data localization and the US expecting India to improve its environmental and labor standards. . All this can circumscribe the IPEF form responding to New Delhi’s concerns.
Finally, many members of IPEF are also members of RCEP. India remains sensitive to negative trade deficits, protecting its small and medium industries and exploring opportunities for its skilled labor force. But more than RCEP, IPEF has added knots to untie: Washington wants to explore cheap manufacturing avenues for its high-end designs and yet hasn’t been able to trust the recipients of its cutting-edge technology.
The United States has mastered the art of building old-fashioned political alignments in order to conquer global markets for its goods and services and to export its weapons. This explains its recent announcements of opening new embassies in Kiribati and Tonga and holding a special ASEAN-US summit. But economic multilateralism involving complex coexistence with counter-coordinating and accommodating impulses can push the United States to the edge and push India into making hard choices it wants to avoid.
The author is Professor of International Relations at Jawaharlal Nehru University (New Delhi) and currently Visiting Professor at the University of British Columbia (Vancouver, Canada).
Opinions do not necessarily reflect those of China Daily.