In a significant development during the Asia Pacific Economic Cooperation (APEC) leaders' summit in San Francisco, countries belonging to the U.S.-led Indo-Pacific Economic Framework (IPEF) announced consensus on two key pillars of the initiative. These pillars revolve around cooperation in clean energy and anti-corruption measures. Additionally, ministers from the 14 IPEF nations formally signed the already established third pillar, which focuses on supply chain resilience.
However, the absence of an agreement on the IPEF trade pillar is a notable setback for the Biden administration's ambitions. The initiative was intended to be a cornerstone of the administration's efforts to demonstrate renewed economic engagement in Asia, offering an alternative to China's growing influence in the region.
U.S. Commerce Secretary Gina Raimondo highlighted the positive outcomes in supply chain resilience, clean energy, and anti-corruption efforts, emphasizing the enthusiasm generated among IPEF partners. She expressed that IPEF is actively addressing issues related to supply chains, infrastructure, and climate change that hold significant relevance for its member nations.
The participating countries have also committed to establishing a ministerial-level council responsible for overseeing and managing all four IPEF pillars. This council will convene annually and create a dedicated commission specifically focusing on the Commerce-led pillars.
The clean energy pillar entails commitments to accelerate research, development, and deployment of clean energy technologies and climate-friendly solutions. According to a joint statement from the 14 nations, this agreement will open avenues for increased private investment in IPEF member countries, facilitating their transition to low-carbon energy sources. Notably, a $30 million "catalytic capital fund" will be established to support the development of viable clean energy projects and offer technical assistance to countries. The U.S. and Japan will contribute $10 million each, with Australia contributing $8 million. A separate group, known as the Indo-Pacific Partnership for Prosperity, comprising private sector firms and non-profit organizations, will focus on mobilizing climate investments in IPEF countries.
Regarding the anti-corruption pillar, the countries have committed to taking measures to prevent, detect, prosecute, and sanction corruption offenses in line with the United Nations Convention Against Corruption. These measures encompass anti-money laundering actions and call for both legally binding and non-binding transparency regarding anti-corruption and tax administration laws. It's worth noting that traditional dispute settlement mechanisms will not be used to enforce compliance with these anti-corruption provisions. Instead, the agreement promotes capacity-building tools to aid countries in developing stronger institutions and compliance mechanisms.
Participating countries in IPEF include Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, Vietnam, and the United States. All of these nations, except India and Fiji, are also members of APEC.
