Much ado about Something? Australia’s Views on IPEF’s Prospects.

The Indo-Pacific Economic Framework for Prosperity (IPEF) Discussion Paper Series: Much ado about Something? Australia’s Views on IPEF’s Prospects.

IITs Professor Peter Draper discusses Australian perspectives on the IPEF’s anticipated outcomes, negotiation challenges and implementation issues. Given that these negotiations are still underway and at an early stage, the material is sourced primarily from internet sources and confidential background interviews with Australian stakeholders. Thereafter, Australia’s participation in the IPEF negotiations is assessed, including a limited case-study on the Pillar 3 – Clean Economy – negotiations.

Professor Draper provides an analysis of the opportunities and challenges related to Australia's stance on the Indo-Pacific Economic Framework. The key takeaways are as follows:

Opportunities:
Strategic Partnership with the USA is crucial for Australia. The IPEF's economic arrangements maintain the US as a key player in the Asia-Pacific.

Establishing strong and enforceable labour rights across all four pillars could create a reliable framework for labour rights that can also be applied to future trade agreements.

If the IPEF members were to adopt Australian designs, then Australia would have a first-mover advantage: a potential ‘Canberra effect’.

Challenges:
Implementation issues depend on the outcomes, specifically, who stays the course and on what issues, and the content of agreed outcomes. Considering the anticipated outcomes, one can only speculate.

Smooth trade and investment in the realm of clean energy demand common approaches to carbon emissions accounting. Yet, as each nation possesses its unique approach to emissions accounting, challenges persist.

In its public statements on the IPEF, US representatives consistently emphasize their expectation that the IPEF signatories will adopt high standards across the four pillars, anchored in US preferences for a ‘worker-centric’ trade policy, in what could be construed as a ‘Washington effect’ to mirror the well-known ‘Brussels effect’.

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The views expressed here are the author(s) alone, and do not represent the views of the Institute for International Trade.