IPEF Supply Chains Text Issued (CHECK)

The Commerce Department released the text of the proposed Indo-Pacific Economic Framework for Prosperity Supply Chain Agreement, calling for the creation of three bodies to address the topic.

“The IPEF Supply Chain Agreement further delivers on President Biden’s commitment to revitalize American manufacturing and strengthen the critical supply chains our workers, companies, and consumers rely on,” said Secretary of Commerce Gina Raimondo. “By working toward finalization of this monumental Agreement, the United States is taking an important step forward to fortify bonds with our partners throughout the Indo-Pacific. Working in lockstep, we will be prepared to best address our shared economic challenges together.”

The proposed Supply Chain Agreement is designed to enable IPEF partners to work together collaboratively to make supply chains more resilient, efficient, transparent, diversified, secure and inclusive, including through information exchange, sharing of best practices, business matchmaking, collective response to disruptions and supporting labor rights.

The aim is to create a commercial environment among IPEF partners that will make supply chains more competitive, according to Commerce. It is also designed to facilitate a reliable supply of critical goods during a time of crisis, working to ensure that US companies have access to key inputs and that US workers will not face unnecessary furloughs and work stoppages due to supply chain disruptions.

Supply Chain Bodies

The IPEF partners continued collaboration would be accomplished through the formal establishment of three supply chain bodies.
Senior government officials from IPEF partners would form an IPEF Supply Chain Council responsible for overseeing collaboration on supply chain issues across the Indo-Pacific.

This work would center around “critical sectors” and “key goods” identified by each partner as essential to its national security, public health and safety, or the prevention of widespread economic disruptions. The Council, envisioned to meet at least annually, would collaborate and organize teams of experts to assess capabilities, map supply chains, identify bottlenecks, and explore options for diversification of concentrated sources of supply for sectors and goods of shared interest.

To help prepare for and respond to future supply chain disruptions, IPEF partners also would form an IPEF Supply Chain Crisis Response Network. Partners would establish an emergency communications channel to facilitate information exchange and provide a platform for IPEF partners to request and offer assistance to respond to, mitigate, and recover from the impacts of a supply chain disruption. The Network would also organize simulations to glean insights into potential vulnerabilities to inform the work of the Supply Chain Council and help IPEF partners prepare for and prevent future disruptions.

The IPEF partners also recognize the importance of labor rights and workforce development in strengthening resilient supply chains across the Indo-Pacific. To that end, the Agreement would establish a unique tripartite IPEF Labor Rights Advisory Board, with government, worker, and employer representatives. The Board would work to identify labor rights concerns across IPEF supply chains and develop recommendations and issue technical reports on specific sectors. The Board also could publish business advisories, best practices, and other relevant information. The Agreement also would commit each IPEF partner to establishing a mechanism for receiving allegations of labor rights inconsistencies at individual facilities in another IPEF country and establish a process for the IPEF partners to work together to address any allegations.

Commerce will continue to provide regular updates and briefings to Congress and to stakeholders as IPEF partners work through their domestic processes to accept, adopt, or ratify the Agreement following signature.