In May 2022, President Biden launched the Indo-Pacific Economic Framework for Prosperity (IPEF) — bringing together 14 nations representing 40% of global GDP. Positioned as America's economic response to China's growing influence in Asia, IPEF represents the US's most substantive regional economic engagement in the post-TPP era.

What is IPEF?

The Indo-Pacific Economic Framework is a US-led initiative designed to strengthen economic ties between the United States and Indo-Pacific partners. Unlike traditional free trade agreements, IPEF is structured around four independent pillars:

  • Pillar I — Trade: Digital economy standards, labour protections, environmental rules
  • Pillar II — Supply Chains: Building resilient, transparent supply chains for critical sectors
  • Pillar III — Clean Economy: Renewable energy, decarbonisation, climate investment
  • Pillar IV — Fair Economy: Tax transparency, anti-corruption, anti-money laundering standards

IPEF Member Countries

The 14 founding members: United States, Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and Vietnam. China is notably absent.

Why Was IPEF Created?

  • Counter China's BRI and RCEP: China's Belt and Road Initiative and the RCEP trade bloc have strengthened China's Asian economic leverage
  • Post-TPP re-engagement: The US withdrawal from TPP in 2017 left a vacuum; IPEF partially fills it
  • Supply chain resilience: COVID-19 exposed dangerous manufacturing dependencies on single countries
  • Digital economy standards: Establishing US-aligned rules before Chinese or EU frameworks dominate

India's Selective Participation

India joined three of the four pillars (II, III, IV) but opted out of the Trade pillar (Pillar I) due to concerns about import liberalisation impacts. This reflects India's historically cautious approach to trade agreements — seeking cooperation benefits without traditional market access commitments.

Criticism and Limitations

  • IPEF offers no meaningful market access — unlike traditional FTAs
  • Congressional approval is not required, limiting US enforceability commitments
  • Narrower scope than RCEP and CPTPP; less attractive to partner nations seeking genuine trade concessions

Strategic Significance

Despite limitations, IPEF represents the most substantive US economic engagement with Indo-Pacific nations since the failed TPP. Its long-term significance depends on whether concrete, enforceable agreements emerge — particularly on supply chains, where US and partner interests align most strongly. The Indo-Pacific's economic architecture is still being written. IPEF is America's attempt to write some of the key chapters.