The countries currently involved in the Indo-Pacific Economic Partnership, or IPEF, have announced that they have reached a “substantial conclusion of negotiations” for an agreement to make their supply chains more resilient and competitive. The deal is expected to outline plans to build resilience and competitiveness in critical sectors through a sector-specific action plan that will also help companies address vulnerabilities in their supply chains before they lead to bottlenecks. The agreement will also set out plans for an IPEF Supply Chain Crisis Response Network to ensure the timely delivery of affected goods during an acute supply chain crisis.
The IPEF initiative was launched in 2022 and is aimed at strengthening U.S. ties to the Indo-Pacific region. The current participants include Australia, Brunei, India, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. While each country has pledged to take part in all four of the initiative’s pillars, India has opted out of the trade pillar. The initiative’s four pillars include trade, supply chains, clean economy, and fair economy.
According to a joint statement, the supply chain agreement will “respect market principles; minimize market distortions, including unnecessary restrictions and impediments to trade; and protect business confidential information.” This will involve the creation of an IPEF Labor Rights Advisory Board to identify labor rights inconsistencies and ensure sufficient numbers of skilled workers in critical sectors and key goods.
The next step for the IPEF participants is to take further domestic consultations and comprehensively review the agreement text before signatures are penned. However, they will also immediately increase investment in critical sectors, key goods, physical, and digital infrastructure, transportation, and workforce projects.
In addition, the U.S. has taken steps to support and collaborate with the agreement. This includes working towards mutual recognition arrangements between CTPAT and the authorized economic operator programs of IPEF member states, supporting cooperation on digital shipping, conducting fact-finding missions, and holding trainings and symposia on supply chain monitoring and operations.
Overall, the IPEF supply chain agreement aims to build a stronger, fairer, and more resilient economy for families, workers, and businesses in the Indo-Pacific region. It is a significant step towards better collaboration between countries to enhance supply chain resilience and competitiveness.
For more information on IPEF, please contact Nicole Bivens Collinson at (202) 730-4956 or via email.
