[CTC] IPEF countries ‘substantially’ conclude negotiations on supply chains

Tue May 30 07:56:09 PDT 2023

Three items below...

IPEF countries ‘substantially’ conclude negotiations on supply chains

May 27, 2023 at 12:45 PM

DETROIT -- Indo-Pacific Economic Framework for Prosperity countries have “substantially concluded” negotiations on the IPEF pillar covering supply chains, Commerce Secretary Gina Raimondo said on Saturday.

Raimondo, who leads the talks on the supply chain pillar, said the 14 IPEF partners had “for the first time ever” forged an “international agreement on supply chains and recognizing for the first time ever that workers and labor rights are a core component of what it means to have global resilient supply chains.”

“This is really a very big deal,” she added in a closing press conference at an IPEF ministerial here.

Over time, she added, IPEF partners will “deliver concrete deliverables in the region” that will show how important the deal is.

In a statement following Raimondo's remarks, Commerce said the IPEF partners would “now take steps, including further domestic consultations and a comprehensive legal review to prepare a final text for signature and then ratification, acceptance, or approval. However, the United States and its Partners will begin work immediately to realize the benefits of cooperation on supply chains, including through private sector engagement and the utilization of technical assistance and capacity building activities to increase investment in critical sectors, key goods, physical and digital infrastructure, transportation, and workforce projects.”

Describing the agreement broadly, Raimondo said the partners would set up an “IPEF Supply Chain Council” to manage issues in “crucial sectors,” as well as an “IPEF Supply Chain Response Network” she described as an “emergency communications channel” that will help with “crisis response.”

Moreover, the negotiators agreed to the establishment of a “Labor Rights Advisory Board” that will help ensure the public and private sectors work together to promote “stronger labor rights” throughout the Indo-Pacific, Raimondo added.

Japanese Economy, Trade and Industry Minister Yasutoshi Nishimura told reporters the deal would be “a framework for cooperating and covering each other in the event of a crisis,” according to a report in Nikkei, informally translated.

“This is the world's first multilateral supply chain agreement,” he added.

U.S. Trade Representative Katherine Tai, who leads the framework’s trade pillar, said she and her counterparts “checked in on our progress” to date during the ministerial and identified where they need “more convergence.”

“We have more work to do,” she said, adding that she was “confident” that results from the trade pillar would be announced in “the months ahead.” -- Margaret Spiegelman (mspiegelman at iwpenws.com <mailto:mspiegelman at iwpenws.com>) and Dan Dupont (ddupont at iwpnews.com <mailto:ddupont at iwpnews.com>)

https://www.commerce.gov/news/press-releases/2023/05/press-statement-substantial-conclusion-ipef-supply-chain-agreement <https://www.commerce.gov/news/press-releases/2023/05/press-statement-substantial-conclusion-ipef-supply-chain-agreement> 

Press Statement on the Substantial Conclusion of IPEF Supply Chain Agreement Negotiations
FOR IMMEDIATE RELEASE

Saturday, May 27, 2023

Today, the 14 partners of the Indo-Pacific Economic Framework for Prosperity (IPEF) –Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the United States, and Viet Nam – announced the substantial conclusion of the negotiations of a first-of-its-kind international IPEF Supply Chain Agreement at the IPEF Ministerial Meeting in Detroit, Michigan. The proposed Agreement aims to increase the resilience, efficiency, productivity, sustainability, transparency, diversification, security, fairness, and inclusivity of their supply chains through both collaborative activities and individual actions taken by each IPEF partner.

Following the launch of IPEF in Tokyo, Japan on May 23, 2022, and since the release of the IPEF Ministerial Statements on September 9, 2022, the IPEF partners have worked constructively, including through four rounds of in-person negotiations, several virtual intersessional meetings, and numerous bilateral meetings. The IPEF partners will undertake the necessary steps, including further domestic consultations and a legal review, to prepare a final text of the proposed IPEF Supply Chain Agreement. Once finalized, the proposed Agreement will be subject to IPEF partners’ domestic processes for signature, followed by ratification, acceptance, or approval.

The IPEF partners are committed to working towards early realization of the cooperation envisioned under the proposed IPEF Supply Chain Agreement. This includes engaging with businesses and utilizing technical assistance and capacity building to increase investment in critical sectors, key goods, physical and digital infrastructure, transportation, and workforce projects.

Under the proposed IPEF Supply Chain Agreement, the IPEF partners seek to:

provide a framework to build their collective understanding of significant supply chain risks, supported by each partner’s identification and monitoring of its own critical sectors and key goods;

improve crisis coordination and response to supply chain disruptions and work together to support the timely delivery of affected goods during a crisis;

ensure that workers and the businesses, especially micro-, small-, and medium-sized enterprises, in the economies of IPEF partners benefit from resilient, robust, and efficient supply chains by identifying disruptions or potential disruptions and responding promptly, effectively, and, where possible, collectively;

better prepare businesses in the economies of the IPEF partners to identify, manage, and resolve supply chain bottlenecks, including by strengthening supply chain logistics and infrastructure;

facilitate cooperation, mobilize investments, and promote regulatory transparency in sectors and goods critical to national security, public health and safety, or the prevention of significant or widespread economic disruptions;

respect, promote, and realize, in good faith, labor rights in IPEF partners’ supply chains, in recognition of the essential role of workers in achieving greater supply chain resilience;

ensure the availability of a sufficient number of skilled workers in critical sectors and key goods, including by upskilling and reskilling workers, promoting inclusivity and equal access, and increasing comparability of skills credentials frameworks;

identify opportunities for technical assistance and capacity building in strengthening IPEF partners’ supply chains; and

respect market principles, minimize market distortions, including unnecessary restrictions and impediments to trade, and protect business confidential information.
In support of these efforts, the proposed IPEF Supply Chain Agreement contemplates the establishment of three new IPEF Supply Chain bodies to facilitate cooperation among the IPEF partners on supply chain issues:

The IPEF Supply Chain Council: The proposed Agreement would establish a mechanism for the IPEF partners to work collaboratively to develop sector-specific action plans for critical sectors and key goods to enhance the resilience of IPEF partner’s supply chains, including through diversification of sources, infrastructure and workforce development, enhanced logistics connectivity, business matching, joint research and development, and trade facilitation.

The IPEF Supply Chain Crisis Response Network: The proposed Agreement would establish an emergency communications channel for the IPEF partners to seek support during a supply chain disruption and to facilitate information sharing and collaboration among the IPEF partners during a crisis, enabling a faster and more effective response that minimizes negative effects on their economies.

The IPEF Labor Rights Advisory Board: The proposed Agreement would establish a new advisory board, consisting of government, worker, and employer representatives, as well as a subcommittee composed of government representatives, to support the IPEF partners’ promotion of labor rights in their supply chains, promotion of sustainable trade and investment, and facilitation of opportunities for investment in businesses that respect labor rights.

The IPEF partners are committed to operationalizing this landmark Agreement as soon as practicable, including starting preparatory work, to bolster resilient supply chains while recognizing the different economic and geographic characteristics of the partners.’

FOR IMMEDIATE RELEASE
May 27, 2023

CONTACT: media at ustr.eop.gov <mailto:media at ustr.eop.gov>

Press Statement for the Trade Pillar, Clean Economy Pillar, and Fair Economy Pillar 

Recalling the successful launch of the Indo-Pacific Economic Framework for Prosperity (IPEF) in May 2022, today, the IPEF partners met in Detroit, Michigan for a ministerial meeting.  The IPEF partners released summaries of the ministerial meeting for Pillars I, III, and IV as provided below.

Pillar I (Trade)

The United States, Australia, Brunei Darussalam, Fiji, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and Viet Nam discussed the status of the negotiations and next steps to continue their work to achieve strong tangible outcomes and benefits for our economies.  The Trade Pillar partners affirmed their commitment to seek to craft high-standard, inclusive, free, fair, and open trade commitments that build upon the rules-based multilateral trading system.  They will seek to develop new and creative approaches to trade and technology policies that advance a broad set of objectives and that fuel economic activities and generate investments; promote resilient, sustainable, and inclusive economic growth and development; and benefit workers, consumers, Indigenous Peoples, local communities, women, and companies, including micro-, small-, and medium-sized enterprises (MSMEs).  Through the IPEF partners’ intensive negotiations over these last months, they have advanced negotiations toward high ambition commitments across the Trade Pillar.  Recognizing different levels of economic development and capacity constraints, the Trade Pillar partners are committed to considering flexibilities, where appropriate, and working with partners on providing for technical assistance and capacity building.  They noted that substantial progress has been made with respect to the chapter text on Technical Assistance and Economic Cooperation. 

The partners look forward to continuing their work to jointly creating an environment conducive to expanding access to opportunities for workers, companies, and peoples in their markets, boosting flows of trade and investment among their economies, enhancing standards, and reducing trade barriers.

Pillar III (Clean Economy)

The United States, Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and Viet Nam discussed the status of the negotiations and welcomed the good progress made to date. Consistent with the September 2022 Ministerial Statement setting out the scope of the negotiations, the IPEF partners are exploring ways to pursue their respective climate goals. Together, they will advance cooperation on research, development, commercialization, availability, accessibility, and deployment of clean energy and climate friendly technologies, and facilitate investment towards climate-related projects in the region. The IPEF partners will achieve this through connecting markets through policies and standards, ensuring that energy is sustainable, resilient, reliable, and affordable, and promoting low-and zero-emission goods and services. Thus far, the IPEF partners have put forward a variety of innovative ideas and approaches to accelerate their transition to a clean economy. Recognizing the importance of delivering concrete economic outcomes, the IPEF partners are concurrently identifying and developing initiatives and proposals to advance cooperation in key areas that are critical to realizing their unique pathways towards net zero emission economies, whilst recognizing the unique national circumstances of each IPEF partner, including their development needs. 

In this spirit, interested IPEF partners are introducing a regional hydrogen initiative to encourage widespread deployment of low-carbon and renewable hydrogen and its derivatives in the region. Those IPEF partners look forward to collaboration, including through drawing upon expertise from both the public and private sectors, which expands new investment, industrialization and job opportunities, and spurs innovation and productivity, in charting their respective pathways towards net zero emissions economies. Other IPEF partners may join the initiative when ready to do so. The IPEF partners look forward to promoting just transition through the creation of decent work, quality jobs, and labor rights based on the ILO Declaration and exploring other future areas for collaboration as negotiations continue. To advance the collaboration, the IPEF partners are committed to enhancing their efforts to reaching a high-standard and mutually beneficial outcome in the upcoming negotiating rounds.

Pillar IV (Fair Economy)

The Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the United States and Viet Nam discussed the status of the negotiations and welcomed the progress made to date to meet Pillar IV’s objectives of effectively implementing and accelerating progress on anti-corruption measures and tax initiatives, including through enhanced cooperation on capacity building and technical assistance. The IPEF partners have made good progress toward development of the text of an agreement that will strengthen implementation of effective anti-corruption and tax measures to boost commerce, trade, and investment among IPEF economies. The IPEF partners look forward to intensifying their efforts in the subsequent negotiating rounds in order to achieve a high-standard and mutually beneficial Fair Economy Agreement.

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Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

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