Landmark Indo-Pacific supply chain pact to come into force on Feb 24

The US on Thursday announced that a landmark agreement on supply chain resilience under the Indo-Pacific economic framework involving 14 partner nations, including India, Japan and Australia, will come into force on February 24.

US Commerce Secretary Gina Raimondo said the pact will facilitate a collaborative approach to strengthen supply chains and prevent potential disruptions.

The US Department of Commerce said the Indo-Pacific Economic Framework for Prosperity (IPEF) agreement relating to supply chain resilience will enter into force on February 24.

The agreement is aimed at coordination among the IPEF partners on building resilient, efficient, productive, sustainable, transparent, diversified, secure, fair, and inclusive supply chains.

"This is a critical step in bringing the landmark, first-of-its kind agreement into action and promoting coordination among the IPEF partners on building resilient, efficient, productive, sustainable, transparent, diversified, secure, fair, and inclusive supply chains," it said.

In line with Washington's long-term vision for the Indo-Pacific, US President Joe Biden launched the ambitious Indo-Pacific Economic Framework for Prosperity (IPEF) in May 2022.

It is an initiative aimed at deeper cooperation among like-minded countries in areas like clean energy, supply-chain resilience and digital trade.

Besides India, Japan, and Australia, the other member nations of the IPEF are Brunei Darussalam, Fiji, Indonesia, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam.

The IPEF member nations negotiated the supply chain agreement to establish a framework for deeper collaboration to prevent, mitigate, and prepare for supply chain disruptions, such as those experienced in recent years from the COVID-19 pandemic.

"I am thrilled to see the continued commitment and enthusiasm of the IPEF partners to make concrete progress and deliver tangible outcomes in record time," US Commerce Secretary Raimondo said.

"With the IPEF supply chain agreement shortly entering into force, we will now move forward and work collaboratively through this innovative framework with the goal of strengthening our supply chains and preventing potential disruptions before they arise for the collective benefit of our countries' workers and businesses," she said.

Since the signing of the IPEF supply chain agreement in November, five IPEF partners–India, Japan, Singapore and the United States and Fiji–have deposited their instruments of ratification, acceptance, or approval, facilitating the agreement's entry into force, the US Commerce Department said.

With the agreement's entry into force on February 24, the focus in the coming months will turn to various milestones set out in the pact related to establishing three supply chain bodies–the supply chain council, crisis response network, and labour rights advisory board.

Also Read

Govt to borrow Rs 14.13 lakh Cr from market in FY25 to meet revenue shortfall

The main focus after the pact comes into force would be to identify the representatives to the three supply chain bodies by no later than March 25 and selecting the chair of each of the supply chain bodies by no later than April 24.

The priority would also be to develop the guidelines for the facility-specific reporting mechanism on labour rights inconsistencies in IPEF supply chains by no later than August 22.

The IPEF supply chain agreement was negotiated pursuant to the ministerial statement on Pillar II (supply chains) released during the IPEF ministerial meeting in September 2022 in Los Angeles.

Negotiations were substantially concluded in May 2023 after approximately six months of deliberations.

The text of the agreement was made public in September 2023. On November 14, Raimondo and her counterparts formally signed the landmark agreement in San Francisco, according to the US Commerce department.