Indo-Pacific bloc acts to boost supply chains

US-led deal ‘helps avoid disruption to essential items during a Covid-like crisis’

Trade ministers of 14 countries in the US-led Indo-Pacific Economic Framework (IPEF) talks “substantially completed” a deal to make supply chains more resilient and secure, the Commerce Department said, marking the first tangible results of the year-long negotiations.

US Commerce Secretary Gina Raimondo told a press conference in Detroit on Saturday that the “first of its kind” agreement called for countries to form a council to coordinate supply chain activities and a “Crisis Response Network” to give early warnings to IPEF countries of potential supply disruptions.

The deal provides an emergency communications channel for IPEF countries to seek support during supply chain disruptions, coordinate more closely during a crisis and recover more quickly.

Raimondo cited shortages of semiconductors during the Covid-19 pandemic that shut down American auto production, idling thousands of workers.

“I can tell you I would have loved to have had that Crisis Response Network during Covid19. It absolutely would have helped us secure American jobs and keep supply chains moving,” she said.

The supply chains agreement also includes a new labour rights advisory board aimed at raising labour standards in supply chains, consisting of government, worker, and employer representatives.

Raimondo led the supply chains negotiations, one of four “pillars” in the IPEF talks, which represents the Biden administration’s main economic initiative in Asia, aimed in part at providing countries in the region with an alternative to closer ties with China.

China is not part of the IPEF discussions, but took part in AsiaPacific Economic Cooperation (Apec) trade talks in Detroit, which wrapped up last Friday with a pledge for more inclusive trade but no joint statement.

The other three IPEF pillars – trade, climate transition, and labour and inclusiveness – are more complex and expected to take longer to negotiate but US officials are aiming for more results by the time of the Apec leaders’ summit in San Francisco in November.

US Trade Representative Katherine Tai told reporters that the ministers “checked in on our progress and identified the areas where we need additional attention”.