The United States Department of Commerce has announced that the United States will be a part of the Indo-Pacific Economic Framework for Prosperity (IPEF), which is set to enter into force on February 24, 2024. The aim of this framework is to fortify the supply chains of the 14 IPEF partners.
U.S. Secretary of Commerce Gina Raimondo expressed her enthusiasm for the initiative, stating, "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." She further added, "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."
According to a press release by the Department of Commerce, five partners have ratified the IPEF Supply Chain Agreement, signed in November 2023. These include Fiji, India, Japan, Singapore, and the United States. The agreement is set to be triggered by its entry into force on February 24, 2024. Key milestones encompass establishing three supply chain bodies: the Supply Chain Council, Crisis Response Network, and Labor Rights Advisory Board. These bodies must be identified, chaired, adopt terms of reference, and develop guidelines for labor rights inconsistencies by June 23.
The IPEF Supply Chain Agreement Text posted on the Commerce website states that this agreement will enhance supply chain transparency among participating countries. This is expected to globally reduce supply chain risk while helping identify bottlenecks and slow down supply chain disruptions. The parties involved plan cooperative activities aimed at increasing diversification, security, and sustainability within IPEF supply chains. Additionally, each party will continue exploring new ways to improve investment opportunities within these supply chains. In case a supply chain disruption occurs, the response network being created through this partnership must convene within 15 days of the meeting request to ensure that the issue is minimized.
