Indo-Pacific: ‘Substantial conclusion’ on new US-led economic initiative

MALAYSIA and 13 other nations completed most of the key “pillars” to the Indo-Pacific Economic Framework for Prosperity (IPEF), marking a major milestone in the United States-led initiative that was launched over a year ago.

Only the section on Trade (Pillar 1) has not been concluded following the two-meeting held on the sidelines of Asia Pacific Economic Cooperation (APEC) summit in San Francisco this week.

This latest development is significant as it will be one of the largest trade pacts in the world, when eventually ratified.

It is also geared to be the most influential one to cover economies located in eastern Asia and around the Pacific Ocean.

The grouping accounts for a massive 40% of the global gross domestic product and 28% of the global goods and services trade.

The countries are Australia, Brunei, Fiji, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand, the US and Vietnam.

The talks among the ministers of the countries also saw substantial conclusions on negotiations on Clean Economy (Third Pillar) and Fair Economy (Fourth Pillar).

A ministerial-level council and commission are to be formed to formalise their cooperation.

The creation of the council will be realised through the Indo-Pacific Economic for Prosperity Agreement, which will be signed later.

The IPEF partners will now undertake the necessary steps, including further domestic consultations and a legal review, to prepare the final texts of the three proposed agreements.

Once finalised, the draft agreements will be subject to IPEF partners’ domestic processes for signature, followed by ratification, acceptance, or approval.

Malaysian Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the signing of the Supply Chain agreement will establish a communication channel for IPEF nations to seek assistance in the event of disruptions.

The deal will also improve coordination during crises and speed-up recovery efforts.

“Not only did we conclude and sign this first-of-its-kind agreement, but we also accomplished this in record time and will potentially have it enter into force in record time as well.

"Malaysia is aware of the necessary procedures that must be followed before signing and ratifying the agreements pertaining to Pillars 3 and 4," he said on the signing of the agreement.

Malaysia will now have to prepare for the implementation of the supply chain bodies and committees under these pillars, he said.

Tengku Zafrul said Malaysia also welcomes the proposed annual IPEF Clean Economy Investor Forum, with the first meeting scheduled to take place in the first half of 2024.

IPEF was launched in Tokyo on May 23, 2022. The partner nations have worked intensively through eight rounds of in-person negotiations. – The Vibes, November 17, 2023