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Wednesday, July 06, 2022

India joins Indo-Pacific economic bloc led by US to counter China

Will strengthen supply chain pillars — trust, transparency & timeliness: PM

Written by Shubhajit Roy | New Delhi |
Updated: May 24, 2022 7:57:17 am
Indo-Pacific Economic Framework, Indo-Pacific Economic Framework (IPEF), Fumio Kishida, Joe Biden, Narendra Modi, Indian Express, India news, current affairs, Indian Express News Service, Express News Service, Express News, Indian Express India NewsPM Narendra Modi with US President Joe Biden and Japan PM Fumio Kishida in Tokyo on Monday. Reuters

Moving to provide an economic alternative to China’s strategic footprint in the Indo-Pacific, India and 12 countries  led by the US Monday launched the Indo-Pacific Economic Framework (IPEF) that aims to strengthen economic partnership among participating countries to enhance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness in the Indo-Pacific region.

In Tokyo, Prime Minister Narendra Modi sat alongside US President Joe Biden, Japanese Prime Minister Fumio Kishida and US Secretary of State Antony Blinken at the launch of the IPEF — New Delhi’s participation at the highest level displayed its commitment to join forces to take on Beijing’s growing assertiveness in the region and beyond.

This economic initiative came a day before the summit of the Quad leaders in Tokyo — the second in-person meeting after the summit in Washington DC last September.

Leaders and officials joined in virtually from Australia, Brunei, Indonesia, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and Vietnam. Among the prominent leaders were South Korean President Yoon Suk Yeol, New Zealand Prime Minister Jacinda Ardern, Singapore Prime Minister Lee Hsien Loong, Thailand Prime Minister General Prayut Chan-o-cha and Vietnam Prime Minister Pham Minh Chinh.

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Modi said, “The Indo-Pacific Economic Framework is a declaration of our collective will to make the region an engine of global economic growth.”

Thanking President Biden for this “important initiative”, he said, “India will work with all of you to build an inclusive and flexible Indo-Pacific Economic Framework. 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.”

Underlining that “Indo-Pacific region is the centre of manufacturing, economic activity, global trade and investment,” the Prime Minister said, “History is witness to the fact that India has been a major centre in the trade flows of the Indo-Pacific region for centuries. It is worth mentioning that the world’s oldest commercial port was in Lothal in my home state of Gujarat. Therefore, it is essential that we find common and creative solutions for the economic challenges of the region.”

Biden launched the IPEF with a dozen initial partners who together represent 40 per cent of the world GDP, the White House said. “Alongside the United States, that’s 13 countries launching this — a baker’s dozen,” US National Security Advisor Jake Sullivan said.


A coalition rises

With China weaponising its economic heft in the Indo-Pacific, the US has now put together what is being seen as a “coalition of the willing” to take on Beijing and provide alternatives.

Biden said, “The future of the 21st century economy is going to be largely written in the Indo-Pacific — in our region. The Indo-Pacific covers half the population of the world and more than 60 per cent of the global GDP. And the nations represented here today, and those who will join this framework in the future, are signing up to work toward an economic vision that will deliver for all peoples… the vision for an Indo-Pacific that is free and open, connected and prosperous, and secure as well as resilient, where our economic growth is sustainable and is inclusive.”

“We are writing the new rules for the 21st century economy that are going to help all of our countries’ economies grow faster and fairer. We will do that by taking on some of the most acute challenges that drag down growth and by maximising the potential of our strongest growth engines,” he said.

A joint statement said that the countries share a commitment to a free, open, fair, inclusive, interconnected, resilient, secure, and prosperous Indo-Pacific region that has the potential to achieve sustainable and inclusive economic growth. “We acknowledge our economic policy interests in the region are intertwined, and deepening economic engagement among partners is crucial for continued growth, peace, and prosperity,” it said.

US Commerce Secretary Gina Raimondo spelt out China as the challenge: “This marks an important turning point in restoring US economic leadership in the region and presenting Indo-Pacific countries an alternative to China’s approach to these critical issues… And I would say, especially as businesses are beginning to increasingly look for alternatives to China, the countries in the Indo-Pacific Framework will be more reliable partners for US businesses.”

The joint statement said that they are launching collective discussions toward future negotiations, and identified four pillars under the IPEF.

Prime Minister Narendra Modi waves ahead of the Quad Leaders’ Summit, between the United States, Japan, India and Australia, at Haneda Airport in Tokyo, Japan May 23, 2022. (Reuters)

* Trade: “We 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 that fuels economic activity and investment, promotes sustainable and inclusive economic growth, and benefits workers and consumers. Our efforts include, but are not limited to, cooperation in the digital economy.”

* Supply Chains: “We are committed to improving transparency, diversity, security, and sustainability in our supply chains to make them more resilient and well-integrated. We seek to coordinate crisis response measures; expand cooperation to better prepare for and mitigate the effects of disruptions to better ensure business continuity; improve logistical efficiency and support; and ensure access to key raw and processed materials, semiconductors, critical minerals, and clean energy technology.”

* Clean Energy, Decarbonization, and Infrastructure: “In line with our Paris Agreement goals and efforts to support the livelihood of our peoples and workers, we plan to accelerate the development and deployment of clean energy technologies to decarbonize our economies and build resilience to climate impacts. This involves deepening cooperation on technologies, on mobilizing finance, including concessional finance, and on seeking ways to improve competitiveness and enhance connectivity by supporting the development of sustainable and durable infrastructure and by providing technical assistance”, it said.

* Tax and Anti-Corruption: “We are committed to promoting fair competition by enacting and enforcing effective and robust tax, anti-money laundering, and anti-bribery regimes in line with existing multilateral obligations, standards, and agreements to curb tax evasion and corruption in the Indo-Pacific region. This involves sharing expertise and seeking ways to support capacity building necessary to advance accountable and transparent systems.”

The joint statement said that framework partners will be engaging in such discussions on various ways to strengthen economic cooperation to achieve these goals, and invited other interested Indo-Pacific partners to join IPEF.

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A statement by the Ministry of External Affairs said India is committed to a free, open, and inclusive Indo-Pacific region and believes that deepening economic engagement among partners is crucial for continued growth, peace, and prosperity.

“India is keen to collaborate with partner countries under the IPEF and work towards advancing regional economic connectivity, integration and boosting trade and investment within the region. With today’s launch, partner countries will begin discussions focusing on strengthening economic cooperation and achieving shared goals,” the MEA said.

Modi, who arrived in Tokyo early Monday, met business leaders and the Indian community. He will attend the Quad leaders’ summit Tuesday and hold bilateral meetings with President Biden, Prime Minister Kishida and newly-elected Australian Prime Minister Anthony Albanese.

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