Broader consensus on ‘trade pillar’ of IPEF yet to emerge: Goyal | The Financial Express

Broader consensus on ‘trade pillar’ of IPEF yet to emerge: Goyal

Explaining the reason behind India’s decision to not join the “trade pillar” yet, Goyal said: “We have yet to see what benefits member countries will derive (from various aspects of the trade pillar) and whether any conditionalities (will be imposed) on, for example, environment.”

Broader consensus on ‘trade pillar’ of IPEF yet to emerge: Goyal
India has joined the three other critical pillars of the IPEF, such as supply chains, tax & anti-corruption and clean energy, Goyal told reporters here at the end of the first in-person ministerial of the US-led initiative.

Commerce and industry minister Piyush Goyal on Friday said India hasn’t joined the crucial “trade pillar” of the 14-member Indo-Pacific Economic Forum for Prosperity (IPEF) initiative, as a broader consensus on certain aspects of this track has yet to emerge among all nations.

However, New Delhi will continue to engage other members and wait for final contours of the IPEF framework on this pillar to emerge so that it can take a final decision on this matter, he said.

Nevertheless, India has joined the three other critical pillars of the IPEF, such as supply chains, tax & anti-corruption and clean energy, Goyal told reporters here at the end of the first in-person ministerial of the US-led initiative.

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The trade pillar requires a country to make commitments on several sensitive issues, including digital economy, data flow, labour, environment and public procurement. India is in the process of firming up its own rules and regulations on some of these areas, especially in the digital economy and data privacy. So, it would have been hard for New Delhi to take on any binding commitments on these issues.

Explaining the reason behind India’s decision to not join the “trade pillar” yet, Goyal said: “We have yet to see what benefits member countries will derive (from various aspects of the trade pillar) and whether any conditionalities (will be imposed) on, for example, environment.” The country will also be sensitive to any potential discrimination in the IPEF framework against developing countries, “who have the imperative to provide low cost and affordable energy to meet the needs of a growing economy”. “We are also in the process of firming up our own digital framework and laws, particularly regarding data privacy,” he said.

Nevertheless, Goyal termed the IPEF ministerial deliberations “fruitful”. Productive discussions have been held over the last few days to bring together a group of like-minded countries with shared interests in an open Indo Pacific region and who would opt for rules of trade, transparent economic policies, Goyal said.

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“On three out of four pillars related to supply chains, tax and anti-corruption and clean energy, we were very much comfortable with the final outcome and text and I have joined the ministerial declaration,” Goyal said.

Addressing reporters here on Friday, US trade representative Katherine Tai said: “India is not now in the ‘trade pillar’. However, minister (Piyush) Goyal and I have been talking and we have our bilateral and trade policy forum. I should be meeting him by the end of this year. We would cover the same issues in that bilateral channel.”

Asked why India opted out, Tai said: “That question you should pose to minister Goyal. I wouldn’t characterise it as opting out, India is not in the trade pillar right now.” It means doors remain open for New Delhi to join the ‘trade’ pillar later should it change its mind.

Speaking at the first in-person meeting of trade ministers of the IPEF members here on Thursday, the USTR had stressed how the IPEF will be “a 21st century tool to tackle 21st century issues, including supply chain resilience and digital commerce”. This framework “will be a durable model for the rest of the world to follow”, Tai had said. The IPEF is being viewed as a mechanism to counter the aggressive and non-transparent trade and economic policies of China.

The IPEF is a grouping of 14 countries in the Indo-Pacific region, which make up over 40% of the global GDP. The 14 members are Australia, Brunei, Fiji, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, Vietnam and the US.

(The reporter is in the US at the invitation of industry body CII)

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