Members of the 14-nation bloc IPEF have “substantially” concluded negotiations on the supply chain agreement, including improvements to logistics and connectivity; Encouraging investment in critical sectors and working together to mitigate disruptions to ensure business continuity, the Commerce Department said on Sunday. The IPEF was jointly launched in Tokyo on May 23 by the US and other partner countries in the Indo-Pacific region. The framework is divided into four pillars: trade, supply chains, clean economy and fair economy (topics such as taxes and anti-corruption). India has joined all the pillars except the trade pillar.
The talks on supply chains, clean economy and fair economy took place on May 27th in Detroit, USA. Trade and Industry Minister Piyush Goyal attended the ministerial meeting virtually.
“At this meeting, the supply chain (Pillar II) negotiations were essentially completed; On the other hand, good progress has been reported on the other IPEF pillars,” the ministry said.
The proposed Supply Chain Agreement aims to increase the resilience, efficiency, productivity, sustainability, transparency, diversification, security, fairness and inclusiveness of their supply chains through joint activities and individual actions of each IPEF partner.
The IPEF partners will take the necessary steps, including further domestic consultations and a legal review, to prepare a final text of the proposed IPEF supply chain agreement.
Once the proposed agreement is finalized, it will be subject to IPEF partners’ domestic processes for signature, followed by ratification, acceptance or approval.
As part of this pact, the partners also strive to improve crisis coordination and response to supply chain disruptions, and work together to support the timely delivery of affected goods during a crisis.
A press release from IPEF members following the meeting said the proposed supply chain pact would see the creation of three new IPEF supply chain bodies to facilitate collaboration between partners.
The three bodies will be: the Supply Chain Council; the Supply Chain Crisis Response Network and the IPEF Advisory Committee on Labor Rights.
“The proposed agreement would establish a new Advisory Council composed of government, labor and employer representatives and a sub-committee of government representatives to support IPEF partners in promoting labor rights in their supply chains and promoting sustainable trade investments and facilitating investment opportunities in companies that respect labor rights,” the statement continued.
Under the Supply Chain Agreement, IPEF partner countries aim to make their supply chains more resilient, robust and better integrated through crisis response measures; Collaboration to mitigate disruption to better ensure business continuity and improve logistics and connectivity; Encouraging investment, particularly in critical sectors and the production of essential goods, and empowering workers through required upskilling and reskilling.
During his intervention under this pillar, Goyal called for the expeditious implementation of all action-oriented collaborative and cooperative elements identified as part of this agreement.
As part of the “Clean Economy” pillar, the member countries want to promote cooperation in the areas of research, development, commercialization, availability, accessibility and use of clean energy and climate-friendly technologies.
In addition, they talk about facilitating investments in climate-related projects in the region.
In addition, interested IPEF partners are launching a regional hydrogen initiative to promote the widespread deployment of renewable and low-carbon hydrogen and its derivatives in the region.
Goyal said India would like the pillar to focus on action-oriented elements such as mobilizing low-cost, long-term climate finance and increasing access to clean energy technologies.
Under the Fair Economy pillar, IPEF partners are working to draft a treaty text designed to strengthen the implementation of effective anti-corruption and tax measures to boost trade, trade and investment between IPEF economies.
IPEF partners represent 40 percent of global GDP and 28 percent of world trade in goods and services.
The 14 countries include the United States, Japan, Australia, New Zealand, the Republic of Korea, India, Fiji and seven ASEAN countries (Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam).