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Malaysia’s Interests in the IPEF: Managing Trade Frictions and Restoring Market Access

To re-engage economically with the Indo-Pacific region, United States (US) President Biden launched the Indo-Pacific Economic Framework for Prosperity (IPEF) in May 2022. For Malaysia, the IPEF could help restore market access to the US by relaxing Withhold Release Orders (WROs) that ban exports of companies facing forced labour allegations. Malaysia also expects that the ease and frequency with which trade sanctions are applied in the future will be better managed as a result of the IPEF.
September 21, 2023 Ordering Information

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These potential benefits of the IPEF need to be weighed against a worst case scenario where the creation of the IPEF further fuels US-China tensions. Another problem is that the IPEF without China is almost economically meaningless to countries with China-centred supply chains like Malaysia. Worse than that, any potential benefits could be more than offset if it fuels US-China tensions leading to actions that further disrupt supply chains and trade.

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IPEF Discussion Paper Series_Chapter 8.pdf
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