Asia-Pacific nations, US vow to build more resilient supply chains

Ministers during the "family photo" at the Indo-Pacific Economic Ministerial event in Los Angeles, California, on Sept 8, 2022. PHOTO: BLOOMBERG

WASHINGTON - In the first high-level in-person meeting on a new economic initiative led by the United States, ministers from 14 nations have committed to making supply chains "more resilient, robust, and well-integrated."

The members of the Indo-Pacific Economic Framework (IPEF) said on Friday that supply chain resilience "may require strengthening the capacity and capability of industries to prepare for and recover quickly from unexpected disruptions," according to a statement issued after a two-day meeting in Los Angeles.

Actions will include creating an information sharing and crisis response mechanism, strengthening supply chain logistics and transparency, and investing in training and development to ensure a sufficient number of skilled workers.

Building resilient supply chains has become an urgent issue after the pandemic led to the closing of borders and disrupted the delivery of goods.

The framework, launched in May by US President Joe Biden, is intended to catalyse US economic engagement in the Indo-Pacific five years after Washington pulled out of the erstwhile Trans Pacific Partnership.

It brings together the US, Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam. They account for more than 40 per cent of the global gross domestic product.

It has four pillars: trade; supply chains; clean energy, decarbonisation and infrastructure; as well as taxes and anti-corruption.

The ministers, for example, agreed to "scale up low- and zero-emissions goods, services, and fuels." They zeroed in on energy security and transition, greenhouse gas emission reductions, sustainable land, water and ocean solutions, as well as innovative technologies for greenhouse gas removal, among others.

They agreed to "advance cooperation on research, development, commercialisation, availability, accessibility, and deployment of clean energy and climate-friendly technologies, as well as sustainable livelihoods and quality jobs,"

They also pledged to "effectively implement and accelerate progress on anti-corruption measures and tax initiatives within our domestic legal frameworks."

The ministers also want "to build connectivity and trust between key markets, including standards on cross-border data flows and data localisation."

In her opening remarks on Thursday, US Trade Representative Katherine Tai said the framework is a commitment to the region that the US "will fight for the common good to ensure that the next generation inherits a better world."

It will be "a durable model for the rest of the world to follow" she said. "It will unlock enormous economic value for our region, especially for small businesses… (and) will also promote resilience and benefit working families and our planet."

IPEF member states account for more than 40 per cent of the global gross domestic product. PHOTO: BLOOMBERG

Singapore's Minister for Trade and Industry Gan Kim Yong said: "The IPEF is a forward-looking, ambitious, and innovative initiative that will allow us to go beyond traditional trade rules to address new and emerging economic issues."

He added: "The continuing global economic uncertainty has made regional and international cooperation even more crucial and urgent, to provide countries with platforms to address challenges that require collective action."

"We look forward to working with IPEF partners to develop tangible benefits for our workers, businesses and communities, such as projects in the digital and green economies."

The framework is also seen as a move by the US to counterbalance China's growing influence across the Indo Pacific.

In an editorial on Friday, China's state-owned Global Times said "Washington's real purpose is to create a small circle of supply chains and industrial chains in the Asia-Pacific region that is 'decoupled' from China."

The paper added: "It also attempts to quietly turn these countries into economic vassals of the US."

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