In a significant development, the US Department of Commerce has officially announced that the Indo-Pacific Economic Framework for Prosperity (IPEF) Supply Chain Agreement, also known as the Supply Chain Agreement, will come into effect on February 24, 2024. This landmark agreement involves 14 partners, including the US, Bharat, Australia, and others, aiming to enhance coordination in building secure, efficient, and fair supply chains.
The IPEF Supply Chain Agreement focuses on strengthening supply chain resilience, especially in the face of disruptions like those witnessed during the COVID-19 pandemic. The participating countries, representing the Indo-Pacific region, have negotiated this framework to prevent, mitigate, and prepare for future disruptions collaboratively.
Gina Raimondo, the US Secretary of Commerce, expressed her joy at witnessing the commitment of IPEF partners to making tangible progress in record time. With the agreement entering into force, the focus will shift to establishing three key supply chain bodies: the Supply Chain Council, Crisis Response Network, and Labor Rights Advisory Board.
Five IPEF partners, including Fiji, Bharat, Japan, Singapore, and the US, have already deposited their instruments of ratification, leading to the agreement’s entry into force provision being triggered. Post this development, the countries will work towards identifying representatives for the supply chain bodies, selecting their chairs, and adopting terms of reference by specific deadlines.
The next steps outlined in the agreement include the identification and notification of each country’s critical sectors and key goods for cooperation, to be completed within 120 days after the agreement’s entry into force for each nation. Additionally, guidelines for the reporting mechanism on labor rights inconsistencies in IPEF supply chains are expected to be developed by August 22.
The IPEF Supply Chain Agreement was negotiated based on the Ministerial Statement on Pillar II (Supply Chains) released during the IPEF Ministerial meeting in September 2022. After about six months of negotiations, the agreement’s text was made public in September 2023, and it was officially signed on November 14, 2023, in San Francisco, California, by US Commerce Secretary Gina Raimondo and her counterparts.
This development signifies a major step forward in fostering collaboration among Indo-Pacific nations to ensure the stability and resilience of supply chains for the collective benefit of their economies, workers, and businesses.
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