US and Indo-Pacific nations sign key economic agreements

Agreements are a part of the Indo-Pacific Economic Framework (IPEF)

June 11, 2024

The pact aims to counter China’s economic influence in the region

Clean economy deal focuses on renewable energy and climate change

The Fair Economy Deal addresses taxation and corruption issues

Significant investment commitments announced for Indo-Pacific infrastructure

The US and 13 other Asian and Pacific nations have signed agreements crucial to Washington’s strategy to strengthen its regional influence. These agreements, part of the Indo-Pacific Economic Framework (IPEF), cover clean and fair economy initiatives, as US Commerce Secretary Gina Raimondo announced after a two-day forum in Singapore.

The IPEF, a key effort led by President Joe Biden, aims to counter China’s significant economic presence in Asia. The participating countries, including economic powerhouses like Japan, India, and South Korea, represent approximately US$ 38 trillion in combined economic output. The Clean Economy Agreement focuses on transitioning to renewable energy and combating climate change, while the Fair Economy Agreement deals with taxation and anti-corruption measures.

Previously, the IPEF partners agreed on the supply-chain pillar to prevent bottlenecks similar to those experienced during the COVID-19 pandemic. However, they have not yet reached a consensus on the final trade pillar, which involves complex issues like digital commerce and labour standards. A senior US commerce official noted that while not all partners signed the latest accords, some countries are in the process of completing their domestic formalities and intend to sign soon.

Raimondo also highlighted a significant investment commitment from a coalition including allied climate partners, BlackRock, GIC, the Rockefeller Foundation, and Temasek, which has pledged over $25 billion for infrastructure projects in the Indo-Pacific emerging markets. Additionally, the forum identified over $23 billion in priority infrastructure projects, with the US industry engaging directly with governments on these investment opportunities.

Singapore’s Prime Minister Lawrence Wong emphasised the importance of deepening ties with the US, highlighting the peace and prosperity brought by America’s longstanding presence in the region. He reiterated Singapore’s advocacy for active US engagement, particularly in Southeast Asia, to maintain stability and promote economic growth.

Source: Economic Times

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