Trade ministers from 14 countries have resolved to make supply chains more resilient and secure during the Indo-Pacific Economic Framework (IPEF) meeting in Detroit on Saturday.
In a press conference, US Commerce Secretary Gina Raimondo said the agreement was the "first of its kind," which calls 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 chain disruptions.
On the other hand, Japanese economic minister Yasutoshi Nishimura said building a strong supply chain that would include the countries of the so-called Global South is "extremely significant"
Supply chain resiliency deal
The agreement was to be used as an emergency measure for IPEF countries to coordinate more closely during supply chain disruptions, provide support to make a quicker recovery and prevent similar occurrences in the future, such as what happened during the COVID-19 pandemic and the continuing Russian invasion of Ukraine.
"I can tell you I would have loved to have had that Crisis Response Network during COVID," Raimondo said. "It absolutely would have helped us secure American jobs and keep supply chains moving."
Also included in the supply chains deal is the establishment of a new labor rights advisory board aimed at raising and maintaining labor standards in supply chains. The board would consist of government, worker, and employer representatives.
China was not part of the IPEF discussions, but its representatives were in Detroit earlier this week to participate in the Asia Pacific Economic Cooperation (APEC) trade talks in the city, which culminated with a pledge for more inclusive trade but fell short of a joint statement.
Tai: IPEF's trade pillar goals will take longer to complete
Meanwhile, US trade representative Katherine Tai told reporters that IPEF's participating ministers "checked in" on its progress and "identified" areas in need of additional attention.
Trade is the first of IPEF's three pillars, which is aimed at providing common rules on agriculture, labor, environmental standards, and trade facilitation.
"We have more work to do, but I am confident that we will start seeing results under Pillar 1 in the months ahead," Tai said.
Complaints from industry groups
IPEF's objectives have been criticized by US farm and industry groups, saying the framework lacks market access improvements and puts it at a disadvantage to other trade deals within the Asia-Pacific region, including those involving China.
Both Raimondo and Tai downplayed such views. "We're not just trying to maximize efficiencies and liberalization," Tai said. "We're trying to promote sustainability, resilience, and inclusiveness."
The IPEF represents about 40% of the global gross domestic product (GDP) and includes countries such as Australia, Brunei, Fiji, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand, the United States, and Vietnam. Canada also seeks to join the framework as its 15th member state.
