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The Indo-Pacific Economic Framework for Prosperity (IPEF) is an economic initiative launched by U.S. President
Joe Biden Joseph Robinette Biden Jr. (born November 20, 1942) is an American politician who was the 46th president of the United States from 2021 to 2025. A member of the Democratic Party (United States), Democratic Party, he served as the 47th vice p ...
on May 23, 2022. The framework launched with fourteen participating founding member nations in the
Indo-Pacific The Indo-Pacific is a vast biogeographic region of Earth. In a narrow sense, sometimes known as the Indo-West Pacific or Indo-Pacific Asia, it comprises the tropical waters of the Indian Ocean, the western and central Pacific Ocean, and the ...
region with an open invitation for other countries to join.


Background


Obama and Trump administration policies

During the presidency of
Barack Obama Barack Hussein Obama II (born August 4, 1961) is an American politician who was the 44th president of the United States from 2009 to 2017. A member of the Democratic Party, he was the first African American president in American history. O ...
(with Joe Biden as
vice president A vice president or vice-president, also director in British English, is an officer in government or business who is below the president (chief executive officer) in rank. It can also refer to executive vice presidents, signifying that the vi ...
), the United States negotiated a trade proposal with twelve
Pacific Rim The Pacific Rim comprises the lands around the rim of the Pacific Ocean. The '' Pacific Basin'' includes the Pacific Rim and the islands in the Pacific Ocean. The Pacific Rim roughly overlaps with the geological Pacific Ring of Fire. List ...
countries that would become known as the
Trans-Pacific Partnership The Trans-Pacific Partnership (TPP), or Trans-Pacific Partnership Agreement (TPPA), was a proposed trade agreement between 12 Pacific Rim countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietn ...
(TPP). In 2015, the Obama administration pitched the proposal as a means to promote American economic interests in the region in the face of a rising China. Following his election in
2016 2016 was designated as: * International Year of Pulses by the sixty-eighth session of the United Nations General Assembly. * International Year of Global Understanding (IYGU) by the International Council for Science (ICSU), the Internationa ...
and subsequent inauguration, then-President
Donald Trump Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who is the 47th president of the United States. A member of the Republican Party (United States), Republican Party, he served as the 45 ...
issued an executive order pulling the United States out of the TPP, which had not been ratified by Congress. In 2018, the eleven remaining countries in the TPP went on to sign a revised version of the agreement, known as the
Comprehensive and Progressive Agreement for Trans-Pacific Partnership The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), previously abbreviated as TPP11 or TPP-11 before enlargement, is a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand ...
.


Biden administration policy

Prior to the launch of the IPEF, critics argued that the U.S. was engaged in an “all guns and no butter” strategy, in which defense was emphasized over regional economic policy. Commentators have described the IPEF as being part of the Biden administration's efforts to counter growing Chinese influence in the region. According to the ''
Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and also published digitally that focuses on business and economic Current affairs (news format), current affairs. Based in London, the paper is owned by a Jap ...
'', countries in the region urged the Biden administration to develop an international economic policy framework to combat China's influence. Analysts have compared it to the
Trans-Pacific Partnership The Trans-Pacific Partnership (TPP), or Trans-Pacific Partnership Agreement (TPPA), was a proposed trade agreement between 12 Pacific Rim countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietn ...
(TPP), which the
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
withdrew from in 2017. The Biden administration stated that it has no intention to join TPP's successor, the
Comprehensive and Progressive Agreement for Trans-Pacific Partnership The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), previously abbreviated as TPP11 or TPP-11 before enlargement, is a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand ...
. The IPEF is intended to be a precursor for later negotiations, as it does not include a uniform lowering of
tariff A tariff or import tax is a duty (tax), duty imposed by a national Government, government, customs territory, or supranational union on imports of goods and is paid by the importer. Exceptionally, an export tax may be levied on exports of goods ...
s. On 22 May 2022, the Biden administration issued a 12-paragraph IPEF. Biden described the initiative as "writing the new rules for the 21st century economy", stating that the agreement would make the participant's economies "grow faster and fairer".
Secretary of Commerce The United States secretary of commerce (SecCom) is the head of the United States Department of Commerce. The secretary serves as the principal advisor to the president of the United States on all matters relating to commerce. The secretary rep ...
Gina Raimondo argued that the framework constituted "the most significant international economic engagement that the United States has ever had in this region". The pact has been described as being "hollow", "meaningless" or "useless" by some commentators, including US industry groups, due to its lack of tangible policy actions such as lowering tariffs. Writing in 2022, academics Xinru Ma and David C. Kang described IPEF as lacking concrete proposals.


Supply Chains

The Agreement Relating to Supply Chain Resilience was signed in November 2023, and entered into force in February 2024. The agreement establishes the Supply Chain Council, the Crisis Response Network and the Labor Rights Advisory Board to address supply chain resilience.


Clean Economy

The Clean Economy Agreement was signed in June 2024, and entered into force on October 11, 2024. The agreement includes measures on developing and deploying clean energy and climate-friendly technologies, facilitating investment towards climate-related projects in the region, connecting markets through policies and standards, and promoting low-and zero-emission goods and services.


Fair Economy

The Fair Economy Agreement was signed in June 2024, and entered into force on October 12, 2024. The agreement aims to prevent and combat corruption and to improve tax transparency and the exchange of information, domestic resource mobilization, and tax administration.


Trade

In November 2023, the United States halted plans for the IPEF's trade component. The Biden administration had intended to conclude the negotiations during the
Asia-Pacific Economic Cooperation Asia-Pacific Economic Cooperation (APEC ) is an inter-governmental forum for 21 member economy , economies in the Pacific Rim that promotes free trade throughout the Asia-Pacific region. Following the success of Association of Southeast Asia ...
forum, but reversed course following opposition from Democratic members of Congress including
Sherrod Brown Sherrod Campbell Brown ( ; born November 9, 1952) is an American politician who served from 2007 to 2025 as a United States senator from Ohio. A member of the Democratic Party, he was the U.S. representative for from 1993 to 2007 and the 47t ...
.


Participating nations


Nations included in the framework

The IPEF has fourteen participating member states, representing around 40% of the world's GDP. Seven members of the IPEF are
ASEAN The Association of Southeast Asian Nations, commonly abbreviated as ASEAN, is a regional grouping of 10 states in Southeast Asia "that aims to promote economic and security cooperation among its ten members." Together, its member states r ...
(Association of Southeast Asian Nations) member states. The 14th and most recent entry into the IPEF was
Fiji Fiji, officially the Republic of Fiji, is an island country in Melanesia, part of Oceania in the South Pacific Ocean. It lies about north-northeast of New Zealand. Fiji consists of an archipelago of more than 330 islands—of which about ...
, which was welcomed into the framework on May 27, 2023, as the first
Pacific Island The Pacific islands are a group of islands in the Pacific Ocean. They are further categorized into three major island groups: Melanesia, Micronesia, and Polynesia. Depending on the context, the term ''Pacific Islands'' may refer to one of several ...
nation to join. Including the United States, the following member countries joined in the framework: Member countries with the four largest GDPs: * (partly opted out on the trade pillar) * * * Countries in Oceania: * * * ASEAN member states: * * * * * * *


Excluded or potential entrant nations

The following non-participating nations were subject to media attention surrounding their potential involvement in the IPEF: * : Canada was not among the nations included in the framework at the time of its launch. Since then, the country has sought admission into the IPEF, with trade minister Mary Ng claiming in December 2022 that the country's bid has the support of all constituent members. * : Taiwan (ROC) was not invited to join the IPEF. * : In August 2023, the British
Foreign Affairs Committee Foreign Affairs Committee may refer to: * Canadian House of Commons Standing Committee on Foreign Affairs and International Development * Canadian Senate Standing Committee on Foreign Affairs and International Trade * Foreign Affairs Committee of t ...
urged the
UK Government His Majesty's Government, abbreviated to HM Government or otherwise UK Government, is the central government, central executive authority of the United Kingdom of Great Britain and Northern Ireland.
to assess membership of the IPEF, as part of the UK's 'Indo-Pacific tilt'.


International reactions

Chinese Foreign Minister Wang Yi criticized the initiative as an attempt to further economic decoupling from
China China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...
. Wang Yi argued that the initiative, and the US
Indo-Pacific The Indo-Pacific is a vast biogeographic region of Earth. In a narrow sense, sometimes known as the Indo-West Pacific or Indo-Pacific Asia, it comprises the tropical waters of the Indian Ocean, the western and central Pacific Ocean, and the ...
strategy as a whole, created divisions and "incited confrontation". Wang stated that such an agreement would "ultimately be a failure". Many analysts have criticized the lack of inclusion of
Taiwan Taiwan, officially the Republic of China (ROC), is a country in East Asia. The main geography of Taiwan, island of Taiwan, also known as ''Formosa'', lies between the East China Sea, East and South China Seas in the northwestern Pacific Ocea ...
in the framework, with '' Taiwan News'' calling the lack of inclusion a "snub". An opinion piece published in '' The Hill'' asserted that Taiwan was excluded in order to appease key "fence-sitter" countries such as
Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania, between the Indian Ocean, Indian and Pacific Ocean, Pacific oceans. Comprising over List of islands of Indonesia, 17,000 islands, including Sumatra, ...
whose governments feared angering China.Former Malaysian Prime Minister
Mahathir Mohamad Mahathir bin Mohamad (; ; born 10 July 1925) is a Malaysian politician, author and doctor who was respectively the fourth and seventh Prime Minister of Malaysia, prime minister of Malaysia from 1981 to 2003 and from 2018 to 2020. He was the ...
criticized the grouping as an initiative intended to isolate China, saying "many countries recognize that this is not an economic grouping but it is truly a political grouping."


India

Initially, India did not outline a definitive position towards the Indo-Pacific Economic Framework. Prabir De of the Research and Information System for Developing Countries, a think tank associated with the Ministry of External Affairs, wrote that India may be uncomfortable with the high economic standards envisaged by the US. He also noted that the IPEF position on digital governance contained issues that directly conflict with India's stated positions. In September 2022, Minister of Commerce & Industry
Piyush Goyal Piyush Vedprakash Goyal (born 13 June 1964) is an Indian politician who is serving as Ministry of Commerce and Industry (India), Minister of Commerce and Industry since 2019. He also served as Minister of Textiles (India), Minister of Textiles ...
said at a press conference in the United States that India had agreed to three pillars relating to supply chains: tax, anti-corruption and clean energy, but that the fourth pillar on trade, involving labour, environment, digital data and public procurement, had not been agreed yet. The US expressed concerns about potential Indian demands for data localisation to ensure that data about Indian users is held and processed only in India and not in the US. A particular aspect of the framework caters also to Indian protectionists. The framework does not allow access to the U.S. market and does not mandate tariff liberalization. Instead, it emphasizes supply chain resilience and provides room to negotiate regulations related to India's highly controversial policies such as data localization.


United States

In March 2022, a bipartisan coalition of over 200 members of the
United States Congress The United States Congress is the legislature, legislative branch of the federal government of the United States. It is a Bicameralism, bicameral legislature, including a Lower house, lower body, the United States House of Representatives, ...
wrote a letter to Secretary of Commerce Gina Raimondo and Trade Representative Katherine Tai urging the inclusion of
Taiwan Taiwan, officially the Republic of China (ROC), is a country in East Asia. The main geography of Taiwan, island of Taiwan, also known as ''Formosa'', lies between the East China Sea, East and South China Seas in the northwestern Pacific Ocea ...
in the IPEF. Following the IPEF's formation, groups including
Public Citizen Public Citizen is an American non-profit, Progressivism in the United States, progressive consumer rights advocacy group, and think tank based in Washington, D.C. It was founded in 1971 by the American activist and lawyer Ralph Nader. Lobbying e ...
urged trade officials to be transparent during negotiations, including through the publication of draft text proposals. In a 2022 hearing, two Democratic members of the
U.S. Senate The United States Senate is a chamber of the bicameral United States Congress; it is the upper house, with the U.S. House of Representatives being the lower house. Together, the Senate and House have the authority under Article One of the ...
expressed concerns that the IPEF was insufficiently ambitious in scope. Senator
Bob Menendez Robert Menendez (; born January 1, 1954) is an American former politician and lawyer who represented New Jersey in the United States Senate from 2006 until his resignation in 2024. A member of the Democratic Party (United States), Democratic ...
(D- NJ), who chaired the
Senate Committee on Foreign Relations The United States Senate Committee on Foreign Relations is a standing committee of the U.S. Senate charged with leading foreign-policy legislation and debate in the Senate. It is generally responsible for authorizing and overseeing foreign a ...
, stated that he did not believe the framework was “as robust as I think we need" and questioned the absence of Taiwan in the framework. Senator
Maria Cantwell Maria Ellen Cantwell (; born October 13, 1958) is an American politician who has been the junior United States senator from Washington since 2001. A member of the Democratic Party, she served in the Washington House of Representatives from 19 ...
(D- WA) expressed concern that IPEF does not include a mechanism to allow U.S. agriculture producers the opportunity to export to new markets.


Comparison with the RCEP

The combined
population Population is a set of humans or other organisms in a given region or area. Governments conduct a census to quantify the resident population size within a given jurisdiction. The term is also applied to non-human animals, microorganisms, and pl ...
and
gross domestic product Gross domestic product (GDP) is a monetary measure of the total market value of all the final goods and services produced and rendered in a specific time period by a country or countries. GDP is often used to measure the economic performanc ...
of IPEF member states exceeds that of the
Regional Comprehensive Economic Partnership The Regional Comprehensive Economic Partnership (RCEP ) is a free trade agreement among the Asia-Pacific countries of Australia, Brunei, Cambodia, China, Indonesia, Japan, South Korea, Laos, Malaysia, Myanmar, New Zealand, the Philippines, S ...
(RCEP), a 2020 regional trade deal that includes China. The only RCEP members not also included in the IPEF are China,
Myanmar Myanmar, officially the Republic of the Union of Myanmar; and also referred to as Burma (the official English name until 1989), is a country in northwest Southeast Asia. It is the largest country by area in Mainland Southeast Asia and has ...
,
Cambodia Cambodia, officially the Kingdom of Cambodia, is a country in Southeast Asia on the Mainland Southeast Asia, Indochinese Peninsula. It is bordered by Thailand to the northwest, Laos to the north, and Vietnam to the east, and has a coastline ...
, and
Laos Laos, officially the Lao People's Democratic Republic (LPDR), is the only landlocked country in Southeast Asia. It is bordered by Myanmar and China to the northwest, Vietnam to the east, Cambodia to the southeast, and Thailand to the west and ...
; while non-RCEP members are the United States, India, and Fiji.


See also

* Bangladesh and the Indo-Pacific Strategy *
Comprehensive and Progressive Agreement for Trans-Pacific Partnership The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), previously abbreviated as TPP11 or TPP-11 before enlargement, is a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand ...
(CPTPP) *
Trans-Pacific Partnership The Trans-Pacific Partnership (TPP), or Trans-Pacific Partnership Agreement (TPPA), was a proposed trade agreement between 12 Pacific Rim countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietn ...
(TPP) *
China–United States trade war An economic conflict between China and the United States has been ongoing since January 2018, when U.S. president Donald Trump began Tariffs in the first Trump administration, imposing tariffs and other trade barriers on China with the aim of fo ...
* Free and Open Indo-Pacific (FOIP) *
Indo-Pacific The Indo-Pacific is a vast biogeographic region of Earth. In a narrow sense, sometimes known as the Indo-West Pacific or Indo-Pacific Asia, it comprises the tropical waters of the Indian Ocean, the western and central Pacific Ocean, and the ...
* Trade policy of the Joe Biden administration


References

{{reflist


External links


Indo-Pacific Economic Framework, U.S. Department of Commerce
International economic organizations 2022 establishments in the United States Organizations established in 2022