Indo-Pacific supply chain pact to take effect on February 24, boosting resilience

Commerce Secretary Raimondo expressed satisfaction with the swift progress made by partner nations in advancing the objectives of the IPEF. With the supply chain agreement set to enter into force, the focus will now shift towards operationalizing various aspects outlined in the pact.

The United States has announced that an agreement on supply chain resilience within the Indo-Pacific economic framework, involving 14 partner nations including India, Japan, and Australia, will come into effect on February 24.

Commerce Secretary Gina Raimondo hailed the agreement as a pivotal step towards fostering collaboration among partner nations to fortify supply chains and mitigate potential disruptions. The Indo-Pacific Economic Framework for Prosperity (IPEF) agreement, about supply chain resilience, aims to bolster coordination among partner nations in building resilient, efficient, sustainable, and inclusive supply chains.

The agreement, set to take effect on February 24, represents a critical milestone in operationalizing this landmark initiative and underscores the commitment of partner nations towards enhancing supply chain resilience and efficiency. It aligns with the long-term vision outlined by US President Joe Biden for the Indo-Pacific region, emphasizing deeper cooperation among like-minded countries in areas such as clean energy, digital trade, and supply chain resilience.

Apart from India, Japan, and Australia, the IPEF member nations include Brunei Darussalam, Fiji, Indonesia, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. These nations collectively negotiated the supply chain agreement to establish a framework for deeper collaboration to address supply chain disruptions, particularly in light of challenges posed by the COVID-19 pandemic in recent years.

Commerce Secretary Raimondo expressed satisfaction with the swift progress made by partner nations in advancing the objectives of the IPEF. With the supply chain agreement set to enter into force, the focus will shift towards operationalizing various aspects outlined in the pact.

Following the agreement’s entry into force, the forthcoming months will witness concerted efforts to establish three key supply chain bodies: the supply chain council, crisis response network, and labour rights advisory board. Key milestones include identifying representatives to these bodies by March 25 and selecting their chairs by April 24.

Furthermore, priority will be given to developing guidelines for a facility-specific reporting mechanism on labour rights inconsistencies in IPEF supply chains by August 22, underscoring the commitment to ensuring fair labour practices and inclusivity within supply chains.

The IPEF supply chain agreement, negotiated following the ministerial statement on Pillar II (supply chains) released during the IPEF ministerial meeting in September 2022, marks a significant achievement after approximately six months of deliberations. The agreement’s text was made public in September 2023, and on November 14, Commerce Secretary Raimondo and her counterparts formally signed the agreement in San Francisco.

The forthcoming IPEF supply chain agreement implementation signals a new era of collaboration and resilience-building among Indo-Pacific nations, aimed at fostering economic prosperity and stability in the region.