The 14 countries in the US-led Indo-Pacific Economic Frameworks (IPEF) agreed on supply chain coordination, the most significant development in President Joe Biden’s new plan for the region thus far, in an apparent effort to reduce their dependency on China and prepare for any supply chain challenges. Through information exchange and coordinated crisis response, India and the US have reached an agreement on supply chain resilience and diversification.
The gathering decided to establish an IPEF supply chain crisis response network, supply chain council, and labour rights advisory network, according to the statement, at the second in-person ministerial conference of IPEF countries this weekend in Detroit. The Indo-Pacific Economic Frameworks also discussed the development of the framework for a clean economy and commerce, and interested countries concurred to establish a regional hydrogen initiative.
The gathering decided to establish an IPEF supply chain crisis response network, supply chain council, and labour rights advisory network
India is a member of three of the four pillars of the Indo-Pacific Economic Framework, although it only participates in the trade pillar as an observer. At the ministerial, the minister of industry and commerce, Piyush Goyal, mainly represented New Delhi. Piyush Goyal, a minister of India, stated in a tweet that India “restate India’s commitment towards building strong supply chains and a clean & fair economy to promote further growth in the region.”
India, Japan, and South Korea, members of the Indo-Pacific Economic Framework, are all among the top ten economies in the world. The framework’s member nations’ combined economic output amounts to nearly 38 trillion dollars. Gina Raimondo, the secretary of commerce for the United States, tweeted at the time of the announcement that she was pleased to share that IPEF had mostly finished talks on a “first-of-its-kind” supply chain agreement. It’s a major deal and the first time an international supply chain agreement including 14 participants from the Indo-Pacific region will be made.
The final wording of the agreement had to be translated, and each nation’s internal approval procedures must then be followed. Australia, Fiji, Brunei, South Korea, Indonesia, Japan, New Zealand, Malaysia, Philippines, Vietnam, Singapore, and Thailand are also members of IPEF in addition to the United States and India.
The first time an international supply chain agreement including 14 participants from the Indo-Pacific region will be made
The objective of the agreement on supply chains, according to IPEF members, is to improve the “efficiency, resilience, productivity, sustainability, transparency, security, diversification, fairness, and inclusivity of their supply chains” through both collective and individual state-level initiatives. Its goals were to “develop a common understanding of significant supply chain risks, supported by each partner’s identification and monitoring of its own crucial regions and primary goods,” according to the attendees. By working together, the parties to the agreement expect to enhance “crisis coordination and response to supply chain disruptions” and facilitate the timely delivery of commodities that are affected.
It will encourage regulatory transparency, foster cooperation, and mobilise investments in fields “critical to national security, the avoidance of significant, pervasive economic disruptions, or public health and safety;” respect, realise, and promote, in good faith, labour rights in partner nations’ supply chains; ensure the availability of adequate skilled labour in fields of critical importance; and identify opportunities for technical assistance.
The statements claim that the IPEF members have promised to achieve this through upholding market principles, removing market distortions, such as pointless trade restrictions and barriers, and safeguarding the private information of the company.