New Zealand inks multilateral pacts to boost trade in Indo-Pacific region

Participants at the Indo-Pacific Economic Framework (IPEF) meet held in Singapore on Thursday, 6 June 2024 (Facebook photo)

Venu Menon
Wellington, June 7, 2024

New Zealand has signed key multilateral agreements under the Indo Pacific Economic Framework (IPEF).

Trade Minister Todd McClay and Climate Change Minister Simon Watts signed three agreements with 13 IPEF partners on Thursday, 6 June 2024 in Singapore, aimed at meeting climate goals and “boosting the New Zealand economy to achieve the aspirational target of doubling exports value in 10 years.”

New Zealand’s IPEF partners include Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, The Philippines, Singapore, Thailand, the United States, and Vietnam.

Together, they constitute 40% of global GDP and are a critical market for Kiwi exporters.

Between them, the ministers from New Zealand signed agreements aimed at creating a “secure and transparent economic climate in the Indo-Pacific region,” as well as an “investment eco-system that is safe, transparent, and reliable for business, while attracting investors.”

The forum was attended by ministers from the IPEF partner countries, public lenders and government agencies, multilateral development banks, institutional investors, as well as private companies.

The agreements promote climate change solutions as well as “renewable energy and emissions reducing technology.”

The IPEF is distinct from a free trade agreement in that it does not include market access for goods or services typically provided under an FTA.

Minister of Trade Todd McClay signs the Fair Economy Agreement under the Indo-Pacific Economic Framework (Facebook photo)

But trade is among the four IPEF pillars under discussion, along with supply chains, a clean economy and a fair economy.

In 2022, leaders of the 14 IPEF countries, including New Zealand, announced the start of talks on setting up the platform.

The following year, on 16 November 2023, IPEF partners met in San Francisco in the US and gave shape to the key pillars of the Framework.

A virtual meeting of ministers took place on 14 March 2024 to assess progress under the Framework, and release the texts of agreements reached at that point. They included the Clean Economy Agreement, the Fair Economy Agreement and the IPEF Agreement.

Parties to the agreements included the major economies of the Indo-Pacific region as well as ASEAN (Association of Southeast Asian Nations).

The Indo-Pacific region, which is home to over half of the world’s population, has a strategic importance, and the IPEF provides a vital platform for the US to engage with the region.

The IPEF’s priorities include “decarbonising economies, harnessing the digital economy, and making supply chains more resilient” in the region.

Negotiation rounds have taken place in December 2022, and throughout 2023.

Washington is the key driver behind IPEF. US Commerce Secretary Gina Raimondo was set on “doing deals and making investments in the clean economy in the IPEF countries.”

Raimondo was pushing for renewable energy projects such as solar and wind, and hoped to clinch multibillion-dollar investments in places such as Thailand and Malaysia, which were “looking to attract investment to their climate-related infrastructure.”

She said these countries needed capital to achieve their climate goals, and “that’s what we’re going to bring to the equation.”

Raimondo stressed the imperative to fight corruption and tax evasion.

“It enables all the rest of this thing to work.”

Venu Menon is an Indian Newslink reporter based in Wellington

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