On Saturday, May 27, 2023, the 14 partners of the Indo-Pacific Economic Framework for Prosperity (IPEF) announced the substantial conclusion of negotiations for the IPEF Supply Chain Agreement (see U.S. Department of Commerce’s press statement here). The IPEF partners – Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the United States, and Vietnam – concluded the agreement at the IPEF Ministerial Meeting in Detroit, Michigan. The agreement aims to enhance the resilience, efficiency, productivity, sustainability, transparency, diversification, security, fairness, and inclusivity of supply chains among the participating countries. The partners will undertake further steps, including domestic consultations and legal reviews, to finalize the proposed agreement before it undergoes each partner’s signature, ratification, acceptance, or approval processes.
The proposed IPEF Supply Chain Agreement focuses on understanding significant supply chain risks, improving crisis coordination and response, benefiting workers and businesses, preparing for and resolving supply chain bottlenecks, promoting regulatory transparency, upholding labor rights, and ensuring the availability of skilled workers.
The agreement also contemplates the establishment of three new bodies: the IPEF Supply Chain Council, IPEF Supply Chain Crisis Response Network and IPEF Labor Rights Advisory Board. These bodies will facilitate cooperation, information sharing, and collaborative actions among the IPEF partners on supply chain issues.
The supply chain agreement is the first outcome of the IPEF initiative. Negotiations are continuing for the other three pillars of the IPEF: (1) encouraging free and fair trade; (2) accelerating the development and deployment of clean energy technologies; and (3) promoting fair competition and enforcing tax, anti-money laundering and anti-bribery regulatory regimes (see Updates of September 9, 2022 and May 24, 2022).