Raimondo, IPEF Ministers Welcome Continued Progress at Indo-Pacific Economic Framework for Prosperity (IPEF) Virtual Ministerial Meeting

Raimondo, IPEF Ministers Welcome Continued Progress at Indo-Pacific Economic Framework for Prosperity (IPEF) Virtual Ministerial Meeting
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Thu, 03/14/2024 – 06:00

Export and investment promotion

FOR IMMEDIATE RELEASE

Thursday, March 14, 2024

Office of Public Affairs

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Bangkok – Today, U.S. Secretary of Commerce Gina Raimondo joined Thai Deputy Prime Minister and Foreign Minister Parnpree Bahiddha-Nukara along with the ministers from the 12 other IPEF partners, in their first ministerial meeting this year.

During the virtual ministerial meeting on Pillars II-IV, Secretary Raimondo welcomed the significant progress made since the substantial conclusion of the negotiations for the proposed IPEF Clean Economy Agreement, the IPEF Fair Economy Agreement, and Agreement on IPEF in November 2023. The IPEF partners also discussed the ongoing cooperative work ahead across the three proposed agreements.

Additionally, the Secretary welcomed the February 24, 2024 entry into force of the IPEF Supply Chain Agreement, and reaffirmed the U.S. commitment to work closely with the IPEF partners to quickly begin operationalizing the agreement. Building on that progress, the Department of Commerce today published the text of the proposed Clean Economy Agreement, Fair Economy Agreement, and Agreement on IPEF. 

The IPEF partners also discussed next steps to deliver concrete outcomes under the Framework over the next several months. This includes several new lines of effort under the Clean Economy pillar, including the launching of four new Cooperative Work Programs (CWPs), announcing that the inaugural IPEF Clean Economy Investor Forum will be held in Singapore on June 5-6, and providing more details on the IPEF Catalytic Capital Fund.

The IPEF partners further announced that the Ministers will next meet in-person in Singapore on June 6 to discuss the Supply Chain Agreement, the Clean Economy Agreement, the Fair Economy Agreement, and the Agreement on IPEF.

“I continue to be amazed by the energy and collaborative spirit that each of our IPEF partners brings to the table and by how much we have accomplished together in such a short amount time,” said Commerce Secretary Gina Raimondo. “This framework did not exist less than two years ago. And now, from completing the legal review of the proposed Clean Economy and Fair Economy Agreements and the Agreement on IPEF, to bringing the Supply Chain Agreement into force and launching additional meaningful initiatives, it’s clear that the next phase of IPEF will continue to deliver concrete results for each of our economies.”

Commerce Department Publishes Texts of Landmark Clean Economy Agreement, Fair Economy Agreement, and Agreement on IPEF

Following the substantial conclusion of the negotiations of the three proposed agreements in November 2023, the IPEF partners conducted an intensive legal review, including an in-person round held in Washington, D.C., on February 19-23, 2024. Having completed the legal review process, the IPEF partners today took a significant step forward with the finalization of the texts for the three proposed agreements. The IPEF partners will now undertake their respective domestic processes to prepare for signature of the agreements, followed by acceptance, approval, or ratification of the agreements.

The progress made under the proposed Clean Economy Agreement is a significant step forward in the Administration’s efforts as an international leader on climate action. In particular, the proposed agreement establishes a basis for how the IPEF partners can work together to pursue net-zero emission economies and promote the sustainable growth and success of all partner economies. The proposed agreement reflects the shared objective of the partners to work together and with the private sector to improve the business environment so that U.S. companies, as well as those of the IPEF partners, have more export and investment opportunities, thereby supporting strong jobs here at home. At the same time, the proposed agreement emphasizes the importance of supporting U.S. and IPEF partners’ workers and communities throughout the transition process. 

The proposed Fair Economy Agreement aims to create a more level playing field for U.S. workers and businesses, as well as those of the IPEF partners, and to create a more transparent, predictable trade and investment environment across the Indo-Pacific. To achieve these goals, under the proposed agreement, the IPEF partners would work together to enhance their efforts to prevent and combat corruption including bribery, and support efforts to improve tax transparency and the exchange of information, domestic resource mobilization, and tax administration. In particular, the proposed agreement reflects how combatting corruption and enforcing labor laws can empower workers, with commitments to ensure that labor rights are respected, including to provide appropriate protections to migrant workers, and to take appropriate measures to prohibit employer interference with the exercise of freedom of association and collective bargaining rights.

To help ensure effective implementation of initiatives across the IPEF pillars and agreements, as well as ensure the durability of the Framework over the long-term for ongoing economic cooperation, the proposed Agreement on IPEF establishes two ministerial-level bodies, each to meet annually: an IPEF Council, which will consider matters affecting the collective operation of the IPEF agreements and Framework as whole, including proposals for negotiations on new agreements and accession of new members; and a Joint Commission to monitor the work under the Supply Chain Agreement, the Clean Economy Agreement, and the Fair Economy Agreement, with a view to identifying cross-cutting synergies and avoiding duplication of work.

As part of its ongoing commitment to transparency, the Department of Commerce is making public the texts of the three proposed agreements, which can be accessed here on its website [insert links].

Pillar II: Building Supply Chain Resiliency for the Indo-Pacific

Following the signing of the IPEF Supply Chain Agreement in November 2023, the agreement entered into force on February 24, 2024, after five partners deposited their instruments of ratification, acceptance, or approval. The IPEF partners are now working towards operationalizing the agreement, including naming their representatives to the agreement’s three bodies (the Supply Chain Council, the Crisis Response Network, and the Labor Rights Advisory Board), establishing chairs, and adopting terms of reference for each, as well as identifying their respective initial lists of critical sectors and key goods for cooperation under the agreement.

Pillar III: Cooperating to Accelerate the Transition to Cleaner IPEF Economies

The IPEF partners further discussed the progress on Pillar III since the substantial conclusion of the negotiations of the proposed Clean Economy Agreement in November 2023.

The IPEF partners welcomed the inaugural IPEF Clean Economy Investor Forum, which will take place in Singapore on June 5-6, 2024. The Forum will bring together some of the region’s largest investors and philanthropies with government agencies and innovative companies and entrepreneurs to mobilize increased investment for climate-related infrastructure, technologies, and projects in the region. These investments will advance the goals of the 14 IPEF partner countries set out in the proposed Clean Economy Agreement. For more information and future updates, please visit: www.IPEFinvestorforum.org.

The IPEF partners also announced plans to provide $33 million in initial grant funding for the IPEF Catalytic Capital Fund under the Pillar III Clean Economy Agreement. These funds will be instrumental in catalyzing up to $3.3 billion in private investment for climate infrastructure projects in IPEF economies party to the IPEF Clean Economy Agreement. The Fund’s founding supporters include Australia, Japan, the Republic of Korea, and the United States, which will take steps to complete their respective domestic processes to contribute funds, as well as raise awareness about the Fund and its opportunities for public and private sector stakeholders. The Private Infrastructure Development Group will administer and leverage the Fund to deploy concessional financing, technical assistance, and capacity-building support to expand the pipeline of high-quality, resilient, and inclusive climate infrastructure projects.

In addition, the IPEF partners took stock of the CWP on hydrogen announced in May 2023, as well potential new ones. Under the proposed agreement, the CWPs are a mechanism through which the IPEF partners or a group of partners prioritize their focus and resources on a common goal. On hydrogen, those interested IPEF partners have taken steps to advance the initiative, including establishing workstreams related to the exchange of information and sharing of best practices on methodologies, standards, and certifications developed by international bodies on the carbon intensity of hydrogen and its carriers, as well as cross-border pilots and demonstration projects.

The IPEF partners also announced four new CWPs based on proposals put forward by partners:

On carbon markets, interested IPEF partners initially are seeking to understand existing regional carbon market priorities and identify strategies for improving the enabling conditions for cooperation;
Interested IPEF partners also are pursuing clean electricity enhancement to facilitate increased decarbonization and access to clean energy in the region, including through public-private cooperation;
To advance the promotion of employment creation and labor rights and strengthen efforts to address employment shifts in the move to clean energy, interested IPEF partners endeavor to pursue workforce development efforts to ensure a just transition towards achieving a clean economy; and  
Interested IPEF partners will collaborate on sustainable aviation fuels (SAF) to enhance the availability and affordability of SAF and its feedstocks, so as to catalyze and develop regional SAF value chains in the region.
Pillar IV: Enhancing Transparency and Predictability in the Business Environment

The IPEF partners also discussed ways to deliver early results under the proposed Pillar IV Fair Economy Agreement to foster a more predictable and transparent business environment and help drive greater trade and investment among the partners. In recognition of the critical role of technical assistance and capacity building (TACB) on achieving the commitments laid out in the proposed agreement and ensuring effective implementation and enforcement of anti-corruption measures and improving transparency tax administration, the partners look forward to continuing to identify and implement TACB initiatives to strengthen anti-corruption efforts and the efficiency of tax administration.  

About IPEF

In May 2022, President Biden launched IPEF, bringing together 14 regional partners – Australia, Brunei, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, the United States, and Vietnam – in a new model of economic cooperation. IPEF negotiations began in late 2022. In May 2023, the IPEF partners announced the substantial conclusion of the negotiations for a first-of-its-kind IPEF Supply Chain Agreement. In November 2023, the IPEF partners announced the substantial conclusion of the negotiations on the proposed IPEF Clean Economy and Fair Economy Agreements, as well as on a proposed overarching Agreement on IPEF to help ensure the durability of the framework and held a signing ceremony for the IPEF Supply Chain Agreement.

Links:

November 2023 IPEF Ministerial Joint Statement
Proposed IPEF Clean Economy Agreement (full text)
Proposed IPEF Fair Economy Agreement (full text)
Proposed Agreement on IPEF (full text)

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Indo-Pacific Economic Framework

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