Indo-Pacific trade deal’s tangible benefits need to be told, says Tengku Zafrul

SAN FRANCISCO: The Indo-Pacific Economic Framework's (IPEF) 14 member countries have signed the supply chain agreement, marking the entry of the trade deal led by the United States (US) sealed in record time.

Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz said it is now vital to send a strong signal on the tangible benefits of the IPEF.

"Not only to the partners but to the rest of the world on what we can collectively accomplish under this Framework," he said after the signing ceremony here on Tuesday (Nov 14) on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting.

The 14 countries are Australia, Brunei, Fiji, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand, the US and Vietnam.

The IPEF consists of four main pillars: Pillar 1 - Trade, Pillar 2 - Supply Chain, Pillar 3 Clean Energy and Pillar 4 - Fair Economy.

IPEF negotiations will see four separate agreements for each of these pillars.

"Not only did we conclude and sign this first-of-its-kind agreement, but we also accomplished this in record time and will potentially have it enter into force in record time as well," said Tengku Zafrul.

The minister said that in addition to this remarkable success, the Pillar 3 and Pillar 4 agreements have been substantially concluded as well as the Indo-Pacific Economic Framework for Prosperity agreement in an equally impressive time.

"While we certainly deserve to celebrate all these accomplishments, it is also time to step on the gas pedal and move to the next phase - the implementation of all that we have negotiated and agreed upon.

"Malaysia is cognisant of the due processes that are required before we can sign and ratify the Pillar 3 and Pillar 4 agreements," he said

Tengku Zafrul said Malaysia could also begin undertaking the preparatory work for activating the implementation mechanism, such as the supply chain bodies and the committees established under the four pillars.

On that note, he registered Malaysia's appreciation to Australia for its initiative to kickstart the capacity-building work with the "IPEF Supply Chain Crisis Tabletop Exercise", conducted at the sidelines of the recent Kuala Lumpur round.

The minister said that these exercises are critical for assessing the readiness of partners in dealing with potential crises going forward.

Recognising the importance of climate-related infrastructure

Tengku Zafrul said Malaysia also welcomes the proposed annual IPEF Clean Economy Investor Forum, with the first meeting scheduled to take place in the first half of 2024.

He said Malaysia has always emphasised the importance of financing to catalyse the energy transition, the adoption of climate technologies and investment in climate-resilient infrastructure and initiatives.

Although Malaysia also welcomes the establishment of the IPEF Catalytic Capital Fund, it is important to recognise that climate-related infrastructures are not always bankable, but they are critical, especially for many developing partner countries, said Tengku Zafrul

"The increasing climate-related disasters globally are clear indications of the existential threat faced by the more vulnerable developing partners.

"Therefore, Malaysia would like to propose that we explore appropriate funding mechanisms to implement climate infrastructure projects that could also include multilateral financial institutions," he said.

The focus on innovative clean technologies, including carbon capture utilisation and storage (CCUS), will play an important role in reducing greenhouse gas (GHG) emissions in the IPEF region, said Tengku Zafrul.

He said although the CCUS has been identified as a potential technology for removing GHG in Pillar 3, there has been limited work done in cross-border storage.

"Therefore, Malaysia would like to encourage work in establishing an internationally recognised governance and accounting framework to enable this.

"I am optimistic that we will be able to carry out our work and maintain the same momentum and tenacity demonstrated in the past year when negotiating the Pillar 2 agreement," he added.

-- BERNAMA