Indo-Pacific Economic Framework: Agreements for a Fair and Clean Economy

November 17, 2023

India, the United States, and 12 other members of the Indo-Pacific Economic Framework for Prosperity (IPEF) have successfully concluded negotiations on the IPEF Clean Economy Agreement and the IPEF Fair Economy Agreement. This follows the signing of the Supply Chain Resilience Pact, showcasing a collaborative effort towards economic resilience.

Next Steps

The member countries, including Australia, Brunei Darussalam, Fiji, Indonesia, Japan, Malaysia, New Zealand, the Republic of Korea, the Philippines, Singapore, Thailand, the US, and Vietnam, will now proceed with necessary steps, including domestic consultations and legal reviews, to prepare the final texts of the agreements. The proposed agreements will then undergo domestic processes for signature, ratification, acceptance, or approval.

IPEF Clean Economy Agreement

The IPEF Clean Economy Agreement commits the countries to actively pursue shared climate objectives and pathways to net-zero emission economies. The agreement covers critical issues related to transitioning to clean economies, including energy security, climate resilience, greenhouse gas emissions mitigation, and the promotion of sustainable livelihoods. The countries aim to increase investment flows to the region, addressing the need for financing climate-related infrastructure, technologies, and projects.

IPEF Clean Economy Investor Forum

To catalyze investment for sustainable infrastructure and climate technology, the countries will convene an annual IPEF Clean Economy Investor Forum. The first meeting is scheduled to take place in Singapore in the first half of 2024.

IPEF Catalytic Capital Fund

An IPEF Catalytic Capital Fund has been established to be administered by the Private Infrastructure Development Group. This fund aims to expand the pipeline of bankable climate-related infrastructure projects, further supporting the transition to clean economies.

IPEF Fair Economy Agreement

Under the IPEF Fair Economy Agreement, member nations commit to working together to enhance fairness, inclusiveness, transparency, the rule of law, and accountability in their economies. The agreement focuses on improving the trade and investment environment in the Indo-Pacific region by promoting a more transparent and predictable business environment. Efforts to prevent and combat corruption, improve tax transparency, exchange information, enhance domestic resource mobilization, and strengthen tax administration are key components of this agreement.

IPEF Background

Launched in Tokyo on May 23 last year, the IPEF addresses issues related to trade, supply chains, clean economy, and fair economy. With India participating in all pillars except trade, the framework aims to bolster economic cooperation and resilience in the Indo-Pacific region, comprising countries accounting for 40% of the world’s economic output and 28% of trade.

« Previous Post Next Post »