US-led Indo-Pacific talks produce deal on supply chain early warnings
Ministers also announced a regional hydrogen initiative to encourage the widespread deployment of low-carbon and renewable hydrogen
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.
This is the first multi-country agreement to strengthen the resilience and connectivity of supply chains through collective and individual actions.
The deal was announced by the US Commerce Department on Saturday (May 27), marking the first tangible results of the year-long negotiations.
US Commerce Secretary Gina Raimondo told a press conference in Detroit that the “first of its kind” agreement 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 disruptions.
Singapore is one of the 14 countries involved in the IPEF, with Trade and Industry Minister Gan Kim Yong attending the two-day ministerial meeting in Detroit.
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.
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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.
The Commerce Department 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.
In a news release issued on Sunday, Gan said that the supply chain agreement will enhance the IPEF nations’ individual and collective efforts to strengthen the resilience and connectivity of supply chains.
“This will also put us in a stronger place to anticipate and respond to any future disruptions to these supply chains. Singapore looks forward to the early operationalisation of the agreement, as well as further progress being made on the negotiations on the other IPEF pillars,” he said.
The 14 trade ministers also introduced a regional hydrogen initiative to “encourage the widespread deployment” of low-carbon and renewable hydrogen and its derivatives in the Indo-Pacific region, by drawing upon expertise from the public and private sectors.
“We welcome the introduction of the hydrogen initiative among interested IPEF partners, to capitalise on the promise of growth in this area and support our respective green economies,” said Gan.
China is not part of the IPEF discussions, but participated in Asia-Pacific Economic Cooperation (Apec) trade talks also held in Detroit, which wrapped up on May 26 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 Apec leaders gather for their next 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”.
The trade pillar does not include negotiations over tariff reductions or other market-access aspects of traditional free trade deals, but aims for common rules on agriculture, labour, 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.
Tai and Raimondo pushed back against complaints from US farm and industry groups that IPEF lacks market access improvements, putting it at a disadvantage to other trade deals in the region, including one led by China.
Raimondo said that view reflects a “misunderstanding” of IPEF’s goals. Tai added that, even from the start, IPEF was not meant to be a traditional trade deal.
“We are not just trying to maximise efficiencies and liberalisation. We are trying to promote sustainability, resilience and inclusiveness.”
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