PM joins Biden to launch Indo-Pacific eco initiative to spur growth in region
In the presence of US President Joe Biden in Tokyo, Prime Minister Narendra Modi on Monday announced India’s participation in the IndoPacific Economic Framework for Prosperity (IPEF), the American-led economic initiative that has on board all four Quad members apart from South Korea and New Zealand and seven of the 10 Asean (Southeast Asian) nations. Mr Modi declared that the IPEF is a “declaration of our collective will to make the region an engine of global economic growth”, while pushing for “Trust, Transparency and Timeliness” as the “three main pillars of resilient supply chains”. The IPEF will focus on “pillars” such as trade, supply chains, clean energy, taxation and anticorruption measures.
In all, the United States, India, Australia, Japan, New Zealand, South Korea, Brunei, Indonesia, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam are part of the IPEF. The move by these 13 nations to strengthen their economic
I thank President Biden very much for this important initiative… History is witness that India has been a major centre in trade flows of the Indo-Pacific region for centuries… — Narendra Modi, Prime Minister
partnership “with the objective of enhancing resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness in the IndoPacific region” is significant, given China’s economic and military assertiveness in the region. But the door has been left open by the IPEF for more Indo-Pacific nations in the region to join it in future.
India and the US also signed an Investment Incentive Agreement (IIA) on Monday in Tokyo to “keep pace with the additional investment support programmes, offered by DFC, such as debt, equity investment, investment guaranty, investment insurance or reinsurance, feasibility studies for potential projects and grants”. The pact was signed by India’s foreign secretary Vinay Mohan Kwatra and Scott Nathan, CEO of the US International Development Finance Corporation (DFC).
In his short address at the IPEF’s launch, Mr Modi said: “The IndoPacific Economic Framework is a declaration of our collective will to make the region an engine of global economic growth. I thank President Biden very much for this important initiative. The Indo-Pacific region is the centre of manufacturing,
economic activity, global trade and investment. 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, India. Therefore, it is essential that we find common and creative solutions for the economic challenges of the region.”
He added: “India will work with all of you to build an inclusive and flexible IndoPacific 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.”
New Delhi later 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”.
It further said “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”, adding “with today's launch, partner countries will begin discussions focusing on strengthening economic cooperation and achieving shared goals.”
In his address at the IPEF launch, President Biden said: “We’re writing the new rules for the 21st century economy that are going to help all of our countries’ economies grow faster and fairer. We’ll 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. Let’s start with new rules governing trade in digital goods and services so companies don’t have to hand over the proprietary technology to do business in a country. Let’s create a firstof-its-kind supply chain commitments to eliminate bottlenecks in critical supply chains and develop early warning systems so we can identify problems before they occur. And let’s… let’s pursue other first-of-its-kind commitments to clean energy and decarbonisation.”
The US President added: “Let’s choke off the loopholes that get at the corruption that steals our public resources. It’s estimated that corruption saps between two to five per cent of global GDP. It exacerbates inequality. It hollows out a country’s ability to deliver for its citizens.
And tax and trade belong in the same framework, because if companies aren’t paying their fair share, it’s harder for governments to pay for
Trade Adjustment Assistance or to fund education or health services, or a range of public investments - that make it so hard for families, it feels like they can’t raise their children and give them a better life. That’s ultimately my economic policy and -- and foreign and domestic -- what our foreign and domestic policy is about. And that’s what this framework is about as well. So, starting today with 13 economies -- economies that represent diverse sets of perspectives as we work on pursuing our common goals”.
In a statement issued later, the United States said: “We, the United States, Australia, Brunei Darussalam, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand and Vietnam of the Indo-Pacific region acknowledge the richness and the diversity of our vibrant regional economy. We share a commitment to a free, open, fair, inclusive, interconnected, resilient, secure, and prosperous IndoPacific 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.”
The US added: “In order to prepare our economies for the future, we are launching the process to establish the Indo-Pacific Economic Framework for Prosperity… We invite participation from additional Indo-Pacific partners that share our goals, interests, and ambitions for the region. Today, we launch collective discussions toward future negotiations on the following pillars.”
On the IPEF’s various pillars, the US said: “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.”
On supply chains, the US said: “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.”