Quad-led IPEF agrees to build resilient supply chains, cut dependence on China
New Delhi, May 29
While differences prevented the Asia-Pacific Economic Cooperation (APEC) from issuing a joint statement recently, the latest economic bloc — Indo-Pacific Economic Framework for Prosperity (IPEF) — managed to reach an agreement on supply chains, which is one of the four pillars of this grouping.
The proposed IPEF Supply Chain Agreement will have three new IPEF supply chain bodies to facilitate cooperation on supply chain issues. The IPEF Supply Chain Council will establish a mechanism to develop sector-specific action plans for critical sectors and key goods to enhance the resilience of IPEF partner’s supply chains. The IPEF Supply Chain Crisis Response Network would establish an emergency communications channel to seek support during a supply chain disruption. The IPEF Labour Rights Advisory Board will consist of government, workers and employer representatives on labour rights and sustainable trade and investment.
India is not a member of APEC, which met in Detroit on May 27, but is a founder-member of the IPEF, which was launched during US President Joe Biden’s visit to Tokyo for the Quad summit in May last year in the presence of PM Narendra Modi and other leaders. Besides the four Quad members, the other partners are Brunei, Fiji, Indonesia, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand and Vietnam. The IPEF meeting was held on the sidelines of the APEC meeting in Detroit.
APEC trade ministers could not issue a joint statement at their meeting in Bangkok in May last year. This could brighten the prospect of IPEC at which India, Japan and the US have been calling for the establishment of alternate supply chains to reduce dependence on China, which is a member of APEC. Analysts say the APEC framework has become dysfunctional due to deep divisions among its members.
While APEC was deadlocked on some issues, IPEF substantially concluded its negotiations under the supply chains pillar and good progress was reported under the other three.
During his intervention under this pillar, Commerce Minister Piyush Goyal, who attended virtually, urged for expeditious implementation of all action-oriented cooperative and collaborative elements identified as part of this supply chain agreement.
The IPEF framework has four pillars — trade, supply chains, clean economy, and fair economy. India has joined all pillars except that of trade, where it has an observer status.
The IPEF member countries will now undertake further domestic consultations and a legal review to prepare a final text of the proposed supply chain agreement. Once finalised, it will be subject to domestic processes for signature, followed by ratification.
