Supply chain resilience is at the heart of the first IPEF agreement

Countries negotiating the Indo-Pacific Economic Partnership announced a „substantial outcome of negotiations” at a ministerial meeting on May 27 to make their supply chains more resilient and competitive. Participants also noted More limited progress They are working to finalize deals on trade and other issues, possibly by the end of the year.

The IPEF was launched in 2022 with the aim of strengthening US ties to the region and creating „a stronger, fairer, more resilient economy for families, workers and businesses”. Current participants include Australia, Brunei, India, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam, and each except India has pledged to participate in the initiative’s four pillars: Trade. (India opted out), supply chains, clean economy and fair economy.

The Supply Chain Agreement (1) creates the IPEF Supply Chain Council, which will oversee the development of sector-specific action plans designed to build resilience and competitiveness in (as yet unidentified) critical sectors. vulnerabilities before they become significant disruptions, and (2) the IPEF Supply Chain Crisis Response Network, which will act as an emergency communication channel and facilitate the timely delivery of affected goods during a severe supply chain crisis. The agreement will establish a Labor Rights Advisory Committee to identify areas where labor rights issues may endanger the resilience and competitiveness of partners’ supply chains, develop and ensure availability of a mechanism to address facility-specific allegations of labor rights violations. Adequate number of skilled workers in critical sectors and key commodities.

According to a joint statement, efforts in these areas include „respecting market principles; reducing market distortions, including unnecessary restrictions and barriers to trade; protecting business confidential information.

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Participants will undertake further domestic consultations and extensive legal review to prepare the final text for signature. However, they will „start working immediately” to increase investment in critical sectors, key commodities, physical and digital infrastructure, transport and labor projects.

In addition, the United States intends to take the following actions in support of this agreement.

– Work towards mutual recognition arrangements between CTPAT and existing IPEF Member States’ Authorized Economic Operator programs

– Support collaboration on digital shipping, including pilot projects with IPEF partners starting at the Port of Singapore

– Invite experts from each IPEF market to improve cargo risk assessment procedures, share best practices in incident response planning, and improve capacity to identify import dependencies and other potential supply chain disruptions

– Conduct fact-finding to select IPEF markets involving Commerce Secretary Gina Raimondo and the President’s Export Council.

– Conduct ten trade missions over the next five years focused on connecting US exporters with opportunities in sectors where IPEF partners seek increased diversification and resilience.

– Announce several new feasibility studies and reverse trade work to support supply chain modernization in IPEF markets

– Conducting series of trainings and symposia on issues related to supply chain monitoring and operations

– Launch an exchange program to match early and mid-career professionals from IPEF countries with professional development opportunities related to supply chain operations.

For more information about IPEF, contact Nicole Bivens Collinson at (202) 730-4956 or by email.

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