Indo-Pacific Economic Framework for Prosperity (IPEF) overview
The Indo-Pacific Economic Framework for Prosperity (IPEF) is an economic agreement covering four pillars:
- trade;
- supply chains;
- clean economy; and
- fair economy.
On 23 May 2022, Leaders from 14 Indo-Pacific countries including New Zealand announced the start of talks toward launching negotiations on the Indo-Pacific Economic Framework for Prosperity. The Joint Leaders statement on the proposed initiative can be read here: Statement on Indo-Pacific Economic Framework for Prosperity | The White House(external link).
On 16 November 2023 IPEF partners met in San Francisco to announce the substantial conclusion of negotiations of the Clean Economy Agreement under Pillar III and the IPEF Fair Economy Agreement under Pillar IV, as well as of the Agreement on the Indo-Pacific Economic Framework for Prosperity, which seeks to establish a ministerial-level council and commission to formalize and ensure ongoing cooperation.
In addition, IPEF partners took stock of the significant progress made on negotiations on Trade under Pillar I. Following the substantial conclusion of the negotiations on the IPEF Supply Chain Agreement under Pillar II in May 2023, Ministers also signed the Supply Chain Agreement on 14 November.
The Joint Statement from IPEF Ministers and the Leader's Statement can be read here:
Background
Countries that have committed to developing the IPEF span our wider home region in the Indo-Pacific and include both ASEAN partners and some of the region’s major economies. Along with New Zealand, Australia, Brunei, Fiji, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Thailand, the US and Viet Nam have all pledged to collaborate on closer economic integration in new and novel ways, not limited to trade. Together the 14 economies represented 40% of global GDP in 2021.
The Indo-Pacific region is vital for the prosperity and security of New Zealand. It is home to over half of the world’s population. Strategically it is important for New Zealand to be an active partner in helping shape an Indo-Pacific order that delivers regional stability and economic integration in a sustainable and inclusive way.
The Indo-Pacific Economic Framework for Prosperity is an opportunity to strengthen economic cooperation with the United States and other economies across our wider home region.
A fully realised IPEF that includes New Zealand perspectives and ideas would provide an open and inclusive platform for the US to engage more deeply in the economic architecture of the Indo-Pacific, which we think is valuable for both New Zealand and our region.
The Framework will cover some of the most important future-focused economic issues facing our region and the world, including harnessing the digital economy, decarbonising our economies, and making our supply chains more resilient.
The principles of sustainability and inclusivity are embedded throughout the Framework. There are strong linkages between the Framework and the principles that underpin New Zealand’s Trade for All Agenda, principles we are bringing to the table in discussions to ensure the benefits of this Framework are broadly shared by our peoples.
The IPEF is not a free trade agreement, and will not include market access for goods or services through traditional schedules, though we think that there may be commercial opportunity for New Zealand in the Trade pillar through the negotiation of rules on Trade Facilitation, on Digital Trade, and on Regulatory Cooperation among other things.
In September 2022, the scoping phase of the Framework concluded, and New Zealand joined the launch of negotiations on all four pillars of IPEF (trade; supply chains; clean economy; and fair economy). Since then, negotiation rounds have taken place in December of 2022, and February, March, May, July, October and November of 2023.