IPEF to focus on uniform standards on digital economy, data flow | The Financial Express

IPEF to focus on uniform standards on digital economy, data flow

First in-person ministerial of Indo-Pacific Economic Framework (IPEF) grouping kicks off in the US

IPEF to focus on uniform standards on digital economy, data flow
Commerce and industry minister Piyush Goyal is in Los Angeles to attend the two-day IPEF ministerial.

The US on Thursday presented its vision for the 14-member Indo-Pacific Economic Framework (IPEF) grouping, seeking to build connectivity and trust between key markets on critical issues relating to the digital economy. These include firming up uniform standards on cross-border data flows and data localisation.

Speaking at the first in-person meeting of trade ministers of the IPEF members here on Thursday, US trade representative Katherine Tai sought to “fill in the details of our shared vision on issues like the digital economy, labour, environment, agriculture, and trade facilitation”.

The American focus on creating a uniform architecture on digital economy for the IPEF nations comes at a time when India, a key member of the group, has withdrawn its own Personal Data Protection Bill from Parliament to introduce a more “comprehensive legal framework”. Importantly, certain provisions of the Bill, especially the need for data localisation, were earlier opposed by big American tech companies such as Facebook and Google.

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In light of the changing strategic landscape, analysts believe India’s data protection framework will now have to be aligned with the broader IPEF architecture if New Delhi chooses to remain an integral part of the grouping.

Commerce and industry minister Piyush Goyal is in Los Angeles to attend the two-day IPEF ministerial.

Importantly, the USTR 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 said. The IPEF is being viewed as a mechanism to counter the aggressive and non-transparent trade and economic policies of China.

“To address the serious flaws in our supply chains exposed by the pandemic, we are pursuing an accelerated implementation of the World Trade Organization’s Trade Facilitation Agreement, which will streamline the movement of goods across borders,” Tai said.

“And critically, we will continue establishing strong labour and environmental standards and corporate accountability provisions to build the foundation for sustainable growth,” Tai said, according to a prepared speech. The US, she said, also supports farm trade through science-based decision-making and the adoption of sound, transparent regulatory practices.

The US-led IPEF may enable India to reap the advantage of being in a large region-specific bloc after its exit from the China-dominated RCEP trade pact, trade economists have said. However, the group’s focus on pillars such as data flow and climate change, driven by the US, will likely impose exacting standards on India to comply with, some of them have cautioned.

India was among a dozen countries that joined the IPEF, which was launched by US President Joseph Biden in Tokyo in May. The members have since held virtual meetings a couple of times.

Speaking at the ministerial, US secretary of commerce Gina Raimondo said the 14 countries together are creating a roadmap for cooperation, aligning objectives to meet our economic goals for workers, businesses and communities.

The success of the IPEF will spur economic activity and investment across the Indo-Pacific region, she said. 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.

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