US-led Indo-Pacific talks produce deal on supply-chain early warnings

US Secretary of Commerce Gina Raimondo speaks at the Indo-Pacific Economic Framework ministerial meeting in Detroit on May 27. PHOTO: AFP

DETROIT – 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, the Commerce Department said last Saturday, 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 disruptions.

The deal provides an emergency communication channel for IPEF countries to seek support during the disruptions, coordinate more closely during a crisis and recover more quickly.

Ms Raimondo cited shortages of semiconductors during the Covid-19 pandemic that shut down American auto production, idling thousands of workers.

“I can tell you I would have loved to have had that Crisis Response Network during Covid-19. It absolutely would have helped us secure American jobs and keep supply chains moving,” she added.

The supply-chain agreement also includes a new labour rights advisory board aimed at raising standards in supply chains, consisting of government, worker and employer representatives.

The IPEF talks represent 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.

China is not part of the IPEF discussions but participated in the Asia-Pacific Economic Cooperation (Apec) trade talks in Detroit, which wrapped up last Friday 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 of the Apec leaders’ summit in San Francisco in November.

Minister for Trade and Industry Gan Kim Yong said Singapore welcomes the agreement, adding that it “will enhance our individual and collective efforts to strengthen the resilience and connectivity of our supply chains”.

“This will also put us in a stronger place to anticipate and respond to any future disruptions to these supply chains...

“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,” he added.

To support these efforts, Mr Gan announced that Singapore will offer capacity-building programmes organised by various government agencies, in topics relevant to each of the four IPEF pillars, such as trade and business development, supply-chain management, clean energy and emissions reduction, and anti-corruption.

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,” Ms Tai added.

She and Ms 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.

Ms Raimondo said that view reflects a “misunderstanding” of IPEF’s goals.

Ms Tai noted that IPEF “from the very beginning, is not a traditional trade deal. We’re not just trying to maximise efficiencies and liberalisation. We’re trying to promote sustainability, resilience and inclusiveness”. REUTERS

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