Why India opted out of joining trade pillar of IPEF for now


LOS ANGELES: India has chosen to opt out from joining the trade pillar of Indo-Pacific Economic Framework’s (IPEF) for its legitimate concerns regarding the possibility of binding conditionalities linking the same to issues like environment and labour. Union commerce minister Piyush Goyal listed the reasons for opting this decision — digital trade with data laws being formed up; linking environment and labour to trade and possible binding commitments of any nature vis-a-vis the benefits that India will receive as a developing economy.
While India will continue to engage with the 14-member forum on this issue, a final decision will be taken keeping “national interest of its people and businesses in mind.” The IPEF has four pillars — trade, supply chains, clean energy-decarbonisation-infrastructure and tax and anti-corruption. The forum gives flexibility to the 14 member countries to choose which pillar/s they want to be part of.
Piyush Goyal said after the IPEF ministerial meeting got over here on Friday: “We were very comfortable with the final outcome and text and I’ve joined the ministerial declarations on three pillars related to supply chains, tax and anti corruption and clean energy. On trade, a broader consensus is yet to emerge among nations on issues like commitments regarding environment, labour and public procurement.”
“We are yet to see if there are any conditionalities. For example, on the environment front this may discriminate against developing nations who have to provide low cost and affordable energy to meet the needs of a growing economy. While continuing to engage with IPEF on trade, India will wait for the final contours before deciding (on joining this pillar). A decision will be taken keeping in mind the interests of our people and businesses.”
India’s concerns are regarding issues like linking environment and labour to trade and having binding commitments about the same. “There are certain responsibilities that the developed world has. Meanwhile this was the first in person ministerial meeting of the IPEF that was created just months back. I commend the speed with which future contours have been drawn up. This is a record of sorts and never before have we seen such a speed. Both US secretary of commerce Gina Raimondo and US Trade Representative Ambassador Katherine Tai are very supportive of India. Together this group of 14 countries will decide the fate of the member 14 countries in the future,” Goyal said.
India is also in the process of firming up its digital framework and laws, especially regarding privacy and data. He hoped that the IPEF outcome will lead to creation of jobs in all member countries and support local businesses through resilient supply chains. “India has engaged very exhaustively in all the various streams of discussion…. We believe that (there are) certain responsibilities of the developed world. That is a matter which will require deeper engagement and more consultation,” he said.
Asked the reason why India has chosen to remain out of the trade pillar for now, US Trade Representative Katherine Tai said here on Friday after the conclusion of the two-day ministerial meet: “I won’t say India has opted out of the trade pillar. I will say they are not in right now. The US will hold bilateral talks with India later this year which will cover the same issues.”
US secretary of commerce Gina Raimondo said on Friday: “All 14 IPEF members have come together on the issues. There were no skeptics in the room, we have a clear roadmap for the mutual benefit of all members. The timelines for implementation are aggressive as people depend on us to succeed.”
Ambassador Tai said: “IPEF is meant to be flexible. Member countries can choose which pillar they want to participate in. There has been great enthusiasm on ensuring a resilient supply chain between the member countries. IPEF will lead to more investments and create more jobs in all the 14 countries.”
The 14-members of IPEF include Australia, Brunei, Fiji, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Thailand, the United States and Vietnam. Unlike trade agreements, this framework does not look to provide greater market access.





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