Clean and fair economy agreements involving the United States, Japan and a dozen other Indo-Pacific countries have taken effect in a step to advance decarbonization and economic cooperation in the region.
The deals on two of the four pillars of the Indo-Pacific Economic Framework entered into force on Friday and Saturday, respectively. An accord on strengthening supply chains already took effect in February, while the remaining pillar is still being negotiated.
Under the Clean Economy Agreement, 14 IPEF economies aim to accelerate energy transition in the fast-growing region through efforts such as incorporating hydrogen into their energy plans, enhancing the deployment of sustainable aviation fuel and the efficient procurement of clean electricity.
Six countries including Japan, Singapore and the United States had completed domestic processes for the clean economy pillar by September, clearing the requisite threshold for an IPEF accord.
The IPEF economies also aim to implement and enforce foreign bribery laws and prevent corruption in public procurement under the Fair Economy Agreement, focused on proper taxation coupled with anti-corruption measures.
The U.S. government has announced it will offer IPEF partners technical assistance and capacity building to help with implementation of the anti-corruption provisions, primarily focused on enforcement training centered on foreign bribery, corporate liability and compliance.
Thailand, the United States and four other countries had completed their domestic processes for approval of the fair economy pillar by last month.
The IPEF economies reached substantial conclusions on the Clean Economy Agreement and the Fair Economy Agreement in November in San Francisco.
The outlook for a deal on trade, the fourth and final pillar of the economic initiative, remains uncertain partly due to divisions over digital trade.
IPEF, representing about 40 percent of global gross domestic product, was launched in May 2022 by the administration of U.S. President Joe Biden to seek deeper economic engagement in the Indo-Pacific, where China has been expanding its influence.
The framework, which is not a traditional free trade pact involving tariff-cutting commitments, also includes Australia, Brunei, Fiji, India, Indonesia, Malaysia, New Zealand, the Philippines, South Korea, and Vietnam.
