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Abstract
1. Introduction
The idea of Indo-Pacific Economic Framework (IPEF) first came up with a White House statement in late 2021 and it was launched in May 2022.1 The Biden administration has termed it as a medium of the US engagement in the Indo-Pacific
Md Rafid Abrar Miah is Research Officer at Bangladesh Institute of International and Strategic Studies (BIISS). His e-mail address is rafidabrar@biiss.org; Mohammad Jasim Uddin, PhD is Research Director at Bangladesh Institute of International and Strategic Studies (BIISS). His e-mail address is jasim@biiss.org
© Bangladesh Institute of International and Strategic Studies (BIISS), 2024
1 Aidan Arasasingham et al., “Domestic Perspectives on IPEF's Digital Economy Component,” Center for Strategic and International Studies, updated January 23, 2023, https://www.csis.org/analysis/domesticperspectives-ipefs-digital-economy-component
region.2 According to the administration, IPEF is yet to be a single undertaking, like a traditional trade agreement. Rather, it is being viewed as a platform for separate negotiations on topics of interest, conducted at varying speeds, with different characteristics of countries, and with an array of potential outcomes.3 IPEF consists of four broad pillars—connected, resilient, clean, and fair economy, and it is aimed at structural economic transformation.4 Fourteen countries—the US, Australia, Japan, New Zealand, Indonesia, India, Brunei, Republic of Korea, Singapore, Malaysia, the Philippines, Fiji, Vietnam, and Thailand have signed the is framework.5 The countries, especially the ASEAN member states including Bangladesh’s close neighbour India, have given their initial views on IPEF. Being a rising economy in the region, Bangladesh has stakes in IPEF.
Bangladesh is considered as a strategically important country in South Asia and the Indo-Pacific region due to its geographic location connecting South and Southeast Asia.6 Japan considers Bangladesh to be a vital country in geopolitical terms and it needs to utilise its geographical advantage to increase economic opportunities.7 Bangladesh’s official position in this regard is stated in the Indo-Pacific Outlook8 published in April 2023 where it is stated that,
“Being a littoral State of the Bay of Bengal, Bangladesh considers the stability and prosperity in the Indo-Pacific to be a crucial factor in realizing her ‘Vision 2041’… The Indo-Pacific area’s collective share in global GDP, preponderance in international trade, enhanced climate action and growing technological dynamism can be key determinants for ensuring Bangladesh’s long-term resilience and prosperity.”
2 Matthew P. Goodman, and William Alan Reinsch, “Filling in the Indo-Pacific Economic Framework,” Center for Strategic and International Studies, updated January 26, 2022, https://www.csis.org/analysis/filling-indopacific-economic framework
3 Aidan Arasasingham et al., “Unpacking the Indo-Pacific Economic Framework,” Center for Strategic and International Studies, updated May 23, 2022, https://www.csis.org/analysis/unpacking-indo-pacific-economicframework- launch; U.S. Department of the Commerce, Ministerial Statements for the Four IPEF Pillars: Trade; Supply Chains; Clean Economy; and Fair Economy, U.S. Department of the Commerce, 2022. https://id.usembassy.gov/ministerial-statements-for-the-four ipef-pillars-trade-supply-chains-clean-economyand-fair-economy/; White House, Fact Sheet.
4 “Fact Sheet: In Asia, President Biden and a Dozen Indo-Pacific Partners Launch the Indo-Pacific Economic Framework for Prosperity,” White House, 2022, https://www.whitehouse.gov/briefing-room/statementsreleases/2022/05/23/fact sheet-in-asia-president-biden-and-a-dozen-indo-pacific-partners-launch-the indopacific-economic-framework-for-prosperity/
5 Aidan Arasasingham et al., “Unpacking the Indo-Pacific Economic Framework Launch.”
6 Md Shariful Islam, “The growing importance of Bangladesh in the Indo-Pacific,” The Daily Star, November 21, 2023, https://www.thedailystar.net/opinion/views/news/the-growing-importance bangladesh the-indopacific-3474976
7 Islam, “The growing importance.”
8 “Indo-Pacific Outlook of Bangladesh,” Ministry of Foreign Affairs Bangladesh, accessed February 22, 2023, https://mofa.gov.bd/site/press_release/d8d7189a-7695 4ff5-9e2b-903fe0070ec9.
This official position of Bangladesh and views of different partner countries of Bangladesh clearly depicts that Bangladesh is one of the important countries in the Indo-Pacific region and collective development of this region will facilitate fulfilling its’ ‘Vision 2041’.
One of the important development partners of Bangladesh, China, is still hesitant about IPEF. China is concerned about Bangladesh’s engagement in the IPEF.9 China is one of the major trading partners of Bangladesh particularly for the raw materials of the readymade garments (RMG) industry.10 On the contrary, the US is a very important destination for the country’s RMG exports and for other bilateral economic engagements.11 Bangladesh hereby requires maintaining good relations with both countries to continue economic growth and development. Considering Bangladesh’s forthcoming graduation from Least Developed Countries (LDCs) and its aftermath, engaging in platforms like IPEF that may have potential for serving national interest of the country might be pivotal. On that note, gauging economic benefit should be the main guiding principle to determine to what extent and in which context Bangladesh would be engaged with IPEF. Joining such an initiative is a political decision but there is a need for an economic gauge to explore the importance of any such arrangement.
This paper thus limits its scope within gauging economic benefits by exploring both the opportunities and challenges that Bangladesh may be encountered with because of IPEF. However, all these issues are still assumptions and to get concrete evidence, there is a need for academic interventions. This study will help examine the assumptions that will benefit the policymakers. In addition to that, given its 50 years’ experience, growth, and development, Bangladesh is no longer an inconsequential country. For the country, joining any economic arrangement will no longer be easy. Maintaining the foreign policy of neutrality a non-alignment will be difficult. Any impromptu decision may bring serious consequences. Evidence-based policymaking is, therefore, instrumental for Bangladesh. This paper is an attempt to examine how far IPEF may serve Bangladesh’s national economic. The objectives of the paper are twofold: first, to explore the opportunities Bangladesh may get from IPEF, and second, to identify”
9 “China tells Bangladesh to ‘reject Cold War mentality and bloc politics,” Hindustan Times, June 02, 2022, https://www.hindustantimes.com/world-news/china-tells-bangladesh-to-reject-cold-war-mentality-and-blocpolitics-101654185173874.html
10 Li Jiming, “Ambassador Li Jiming Publishes an Article titled China's high-standard opening up will benefit Bangladesh,” Embassy of China in Bangladesh, December 10, 2022, http://bd.chinaembassy.gov.cn/eng/dshd/202212/t20221212_10989207.htm#:~:text=Among%20China's%20exports%20to%20Bangladesh,Bangladesh's%20productivity%20and%20RMG%20industries.
11 Refayet Ullah Mirdha, “Garment exports to US double in five years,” The Daily Star, January 22, 2024, https://www.thedailystar.net/business/news/garment-exports-us-double-five-years-3525571.
the challenges that Bangladesh may face once it decides to join IPEF. To meet these objectives, two research questions are set. First, what are the opportunities for Bangladesh in IPEF? And, how IPEF may affect Bangladesh if it decides to join?
The research follows an interpretive approach, a method of qualitative data analysis, to analyse the opportunities and challenges Bangladesh may enjoy and face if it decides to join IPEF. Data was collected both from primary and secondary sources through (a) Key Informant Interviews (KII) with practitioners, academia and analysts, and (b) literature review. Documentary information helped accumulate explicit data and was collected from a variety of sources including government and nongovernment documents, academic journals, online opinion pieces, speeches, reports, and newspaper articles and clippings sourced from both available online resources and print media. For KII, the paper followed a semi-structured interview method comprising four phases—developing the semi-structured KII checklist, selecting respondents, arranging interviews, and setting up of interpretive outlines to address the research questions. The KII respondents were selected purposively based on their expertise. This paper has seven sections. Following introduction, section two provides a review of literature while section three discusses the four pillars of IPEF. Section four analyses the potentials of IPEF for Bangladesh and section five examines the critical aspects of IPEF for Bangladesh. Section suggests way forward and section seven concludes the paper.