India's Commerce and Industry Minister Piyush Goyal, virtually took part in IPEF's (Indo-Pacific Economic Framework) 1st Ministerial meeting in 2024, along with US Secretary of Commerce Gina Raimondo, Thai Deputy Prime Minister and Foreign Minister Parnpran Bahiddha Nukara, and the ministers from the other IPEF partners.
Welcoming the significant progress made since the substantial conclusion of the negotiations for the proposed IPEF Clean Economy Agreement (Pillar III), the IPEF Fair Economy Agreement (Pillar IV), and the Agreement on IPEF in November 2023, the IPEF partners discussed the ongoing cooperative work across the three proposed agreements.
The inaugural IPEF Clean Economy Investor Forum will be held in Singapore on June 5-6. The IPEF partners announced that the Ministers will next meet in-person on June 6 to discuss the Supply Chain Agreement, the Clean Economy Agreement, the Fair Economy Agreement, and the Agreement on IPEF. The IPEF partners also discussed steps to deliver concrete outcomes under the Framework over the next few months, including several new lines of effort under the Clean Economy pillar and launch of 4 new Cooperative Work Programs (CWPS).
Following the substantial conclusion of the negotiations of the three proposed agreements in November 2023, the IPEF partners had conducted an intensive legal review, including an in-person round held in Washington DC, from 19th to 23rd February.
Having completed the legal review process, the IPEF partners will now undertake their respective domestic processes to prepare for signature of the agreements, followed by acceptance, approval and ratification.
The IPEF Clean Economy Agreement facilitates enhanced collaboration and cooperation between IPEF partners in their respective efforts to accelerate clean energy transition, enhance energy security, and climate resilience and adaptation, and support sustainable livelihoods in IPEF member countries. The Agreement, upon implementation, is likely to increase inward investments in India in the clean economy domain, promote development of low-cost climate technologies, facilitate technical assistance and capacity building, provide new opportunities for Indian exports, and generate additional employment opportunities.
The proposed Fair Economy Agreement aims to create a more transparent, predictable trade and investment environment across the Indo-Pacific. To achieve these goals, under the proposed agreement, the IPEF partners would work together to enhance their efforts to prevent and combat corruption including bribery, and support efforts to improve tax transparency and the exchange of information, domestic resource mobilisation, and tax administration.
To help ensure effective implementation of initiatives across the IPEF pillars and agreements, as well as ensure the durability of the Framework over the long-term for ongoing economic cooperation, the proposed Agreement on IPEF establishes two ministerial-level bodies, each to meet annually: an IPEF Council, which will consider matters affecting the collective operation of the IPEF agreements and Framework as whole, including proposals for negotiations on new agreements and accession of new members; and a Joint Commission to monitor the work under the Supply Chain Agreement, the Clean Economy Agreement, and the Fair Economy Agreement, with a view to identify cross-cutting synergies and avoiding duplication of work.
The IPEF partners also announced plans to provide $33 million in initial grant funding for the IPFF Catalytic Capital Fund under the Pillar Clean Economy Agreement. These funds will be instrumental in catalyzing up to $3.3 billion in private investment for climate infrastructure projects in IPEF economies party to the IPEF Clean Economy Agreement. The Fund's founding supporters include Australia, Japan, the Republic of Korea, and the United States.
The Private Infrastructure Development Group will administer and leverage the Fund to deploy concessional financing, technical assistance, and capacity building support to expand the pipeline of high quality, resilient, and inclusive climate infrastructure projects. In addition, the IPEF partners took stock of the CWP on hydrogen announced in May 2023, as well potential new ones. Under the proposed agreement, the CWPs are a mechanism through which the IPEF partners or a group of partners prioritize their focus and resources on a common goal.
The following is a brief description of the IPEF Pillars:
Pillar II: Building Supply Chain Resiliency for the Indo-Pacific
Following the signing of the IPEF Supply Chain Agreement in November 2023, the agreement entered into force on 24 February 2024, after five partners deposited their instruments of ratification, acceptance, or approval. The IPEF partners are now working towards operationalizing the agreement, including naming their representatives to the agreement's three bodies (the Supply Chain Council, the Crisis Response Network, and the Labor Rights Advisory Board), electing chairs, and adopting terms of reference for each, as well as identifying their respective initial lists of critical sectors and key goods for cooperation under the agreement
Pillar III: Cooperating to Accelerate the Transition to Cleaner IPEF Economies
The IPEF partners further discussed the progress on Pillar Ill since the substantial conclusion of the negotiations of the proposed Clean Economy Agreement in November 2023. The IPEF partners welcomed the inaugural IPEF Clean Economy Investor Forum which will take place in Singapore on 5th and 6th June 2024. The Forum aims to bring together some of the region's largest investors and philanthropies with government agencies and innovative companies and entrepreneurs to mobilise increased investment for climate-related infrastructure, technologies, and projects in the region. These investments intend to advance the goals of the 14 IPEF partner countries set out in the proposed Clean Economy Agreement.
Pillar IV: Enhancing Transparency and Predictability in the Business Environment
The IPEF partners discussed ways to deliver early results under the proposed Pillar IV Fair Economy Agreement to foster a more predictable and transparent business environment and help drive greater trade and investment among the partners. The Pillar IV Agreement is expected to enhance information sharing among partners, facilitate asset recovery and strengthen cross-border investigations and prosecutions. It will also aid in India's fight against consumption, money laundering and terror financing. In recognition of the critical role of technical assistance and capacity building (TACB) on achieving the commitments laid out in the proposed agreement and ensuring effective implementation and enforcement of anti-corruption measures and improving transparency tax administration, the partners look forward to identify and implement TACB initiatives to strengthen anti-corruption efforts and the efficiency of tax administration.
