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Home / Opinion / Views /  The IPEF could offer us a boat we must not miss

The post-Cold War integration of Russia’s economy with the West’s may not have prevented its invasion of Ukraine, but the mutual gains of trade ties can usually be relied upon to foster a pax economica. In a world being cleaved apart by geopolitics again, this time with a US-versus-China bipolarity in the offing, India’s neutrality will be tested as we seek to retain and build bridges that serve our interests. For Indo-Pacific security, we have cast our lot with the US, Japan and Australia to form the four-nation Quad. Currently just a forum to discuss common concerns rather than a defence alliance, the Quad’s agenda has steadily expanded over the years. For the group to acquire durable heft, however, talks on how best to help one another prosper must go with convergence on keeping the Indo-Pacific open and free. If the Indo-Pacific Economic Framework (IPEF) proposed by US President Joe Biden on his visit to Asia meets even a minimal bar for what suits us, New Delhi should sign up for it. Trade relations with fellow democracies, after all, have been our preference after we gave up on the Regional Comprehensive Economic Partnership (RCEP) led by China. With a dozen odd participants, it’s the IPEF that “should drive a race to the top", Biden said on Monday.

The RCEP was deemed unsuitable by New Delhi, but an IPEF sign-up could acquit us of export pessimism charges in the Asian context. Yet, even a gift horse must be checked closely. In spite of Biden’s declaration that “America is back", Washington’s dismissal of free trade logic under the Trump administration—which took a tariff-happy turn in reaction to Chinese gains—has not been reversed by the White House. So long as electoral fortunes in the US depend on voters who blame globalization for their woes, its leaders will probably be reluctant to openly promote a barrier-free world of exchange. Any trade component of Biden’s Asian outreach is thus likely to be inflected by calculations of American jobs. Though its details are sketchy, the IPEF aims to facilitate fair and shock-proof trade, with e-commerce and supply-chain resilience as major aspects of it. For us to position India as an option to China for manufacturing networks that span borders, a big opportunity that arose only recently, we must join forces with a multilateral project aimed at frictionless commerce. Of course, if the proposal reveals US labour protection and non-tariff barriers in the guise of “fair trade", then we may demur. However, if it promises to ease market access and enhance our export output overall, then we must not let item-wise shipment specifics stall our participation.

While the IPEF will also cover cooperation on infrastructure and clean energy, apart from coordination over taxation, rule enforcement and the like, its trade prospects should guide New Delhi’s approach. We need to go beyond bilateral pacts and focus on broad competitiveness instead of two-way particulars. On its part, the US would do well not to insist on caveats that could blunt any Indian advantage. Our put-offs will have to be spelt out with clarity right at the onset of IPEF talks. But then, just as the White House is seized of the need to keep Indo-Pacific sea-lanes free of a Chinese shadow, it must also be aware of how constraints on Indian export success could work against the Quad’s geopolitical goals. Making a go of an expanded plan will take not just policy alignment, but also large resources. Sure, America is back, in a way, but it must put its money where its mouth is.

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