Indo-Pacific Economic Framework: Evaluating Merits and Demerits

Beyond the traditional idea of trade agreements, the emergence of Indo-Pacific Economic Framework (IPEF) by the USA during the Joe Biden administration aims at building a resilient economy. The IPEF aims to address the interests of several small, medium and large powers across continents. In order to mitigate the impact of the US withdrawal from Trans-Pacific Partnership (TPP) and expanding influence of China through its flagship Belt and Road Initiative (BRI), the US envisages the IPEF as a potential instrument to re-establish its economic influence across the region. China’s willingness to join CPTPP and the hesitation of some ASEAN countries to join IPEF can shape the outcome that the USA expects the IPEF to be result-oriented. IPEF needs to incorporate its regulation regarding expansion of market access to attract ASEAN countries. On the other hand, due to the dependency of the South Asian economy on the Chinese on its supply chain, China can play a vital role in the success of IPEF. It is to be seen if the IPEF can prove to be an effective counter narrative espoused by the US to check China’s expanding economic footprint through its BRI. However, Donald Trump who succeeded Biden has unleashed a worldwide trade and tariff war, thereby threatening the world economy could put the IPEF into an uncertain terrain.