The IPEF could offer us a boat we must not miss

News: The Indo-Pacific Economic Framework may be an opportunity for India’s integration with global supply chains and trade flows. But the US must put global aims above its home politics.

Why India should join IPEF?

India should join IPEF as trade relations with fellow democracies has been its preference after it gave up on the Regional Comprehensive Economic Partnership (RCEP) led by China.

Also, India is often blamed for its export pessimism. Joining IPEF would change that.

— Export Pessimism indicates the pessimism about the demand for exports in developing nations in the markets of developing countries.

Will boost QUAD’s influence: Currently just a forum to discuss common concerns rather than a defence alliance, the Quad’s agenda has steadily expanded over the years. For the group to acquire durable weight, however, talks on how best to help one another prosper must go simultaneously alongside keeping the Indo-Pacific open and free.

To position India as an option to China for manufacturing networks that span borders, we must join forces with a multilateral project aimed at frictionless commerce.

What does the IPEF entail?

Details around IPEF are sketchy at this point. Here’s what’s known so far:

– The IPEF aims to facilitate fair and shock-proof trade, with e-commerce and supply-chain resilience as major aspects of it

What are some concerns that India must consider?

Washington’s dismissal of free trade logic under the Trump administration has not yet been reversed by the White House. So long as electoral fortunes in the US depend on voters who blame globalization for their problems, its leaders will probably be reluctant to openly promote a barrier-free world of exchange.

– Any trade component of Biden’s Asian outreach is thus likely to be impacted by calculations of American jobs.

If the IPEF includes US labour protection and non-tariff barriers in the guise of “fair trade”, then India may hang back. However, if it promises to ease market access and enhance our export output overall, then we must not let item-wise shipment specifics stall our participation.

Way forward

While the IPEF will also cover cooperation on infrastructure and clean energy, apart from coordination over taxation, rule enforcement and the like, its trade prospects should guide New Delhi’s approach.

We need to go beyond bilateral pacts and focus on broad competitiveness instead of two-way particulars.

On its part, the US would do well not to insist on caveats that could blunt any Indian advantage.

India must spell out its interests clearly right at the onset of IPEF talks. But then, just as the White House is seized of the need to keep Indo-Pacific sea-lanes free of a Chinese shadow, it must also be aware of how constraints on Indian export success could work against the Quad’s geopolitical goals.

Source: This post is based on the article “The IPEF could offer us a boat we must not miss” published in Livemint on 24th May 22.