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Impact of regional trade agreements on the IPEF

The Indo-Pacific Economic Framework (IPEF) seeks to establish the United States (US) as the primary rule-setter in the Asia Pacific (APAC), a position it has ceded to China in recent years. The reciprocal benefits for the APAC are not so evident. Many in the region are not keen to choose sides and as a trade pact, it compares poorly with the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

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On its side, the IPEF has reminded detractors that it is not a traditional Free-Trade Agreement (FTA), but
a new generation economic agreement. This has some appeal and the APAC allies have signed on
quickly. But the IPEF’s flexible approach means that having signed on, there is no compulsion to
follow through. Importantly, for now, there are no clear incentives for the private sector to part
with the sensitive supply chain information that is central to the IPEF’s success. Future negotiations
will benefit from the US’s willingness to sweeten the terms and position IPEF as an economic
arrangement complementing existing trade pacts rather than upending those.

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Contact Person

Cristita Marie Perez

Cristita Marie Perez KAS

Senior Programme Manager, Regional Economic Programme Asia (SOPAS)

cristita.perez@kas.de +81 3 6426 5041

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