The Indo Pacific Economic framework, an economic grouping of major world powers have decided to set up institutions to facilitate an independent supply chain functioning at their meeting at the US motor town of Detroit last week ,
Three institutions have been lined up as part of their efforts to achieve their objectives. They include IPEF Supply Chain Council that will provide a mechanism work for members to work together to develop “sector-specific action plans for critical sectors and key goods” to enhance resilience, “including through diversification of sources, infrastructure and workforce development, enhanced logistics connectivity, business matching, joint research and development, and trade facilitation”.
IPEF supply chain crisis response network will serve as an “emergency communication channel” for members to seek support during disruptions and facilitate information-sharing.
IPEF labor rights advisory board will be a multi-stakeholder body supporting promotion of labor rights in supply chains, sustainable trade and investment and facilitation of opportunities for investments in labor-friendly businesses. It is noteworthy that the labour-related body is merely advisory in nature and does not entail hard and specific commitments from members.
On clean economy, IPEF members said they are exploring ways to meet their climate goals and will cooperate on “research, development, commercialization, availability, accessibility, and deployment of clean energy and climate friendly technologies, and facilitate investment towards climate-related projects in the region”.
The grouping said it will do so by connecting markets through policies and standards, “ensuring that energy is sustainable, resilient, reliable, and affordable, and promoting low-and zero-emission goods and services”. To deliver concrete benefits, IPEF members are currently, identifying and developing initiatives to advance cooperation in areas critical to realise their “unique pathways towards net-zero emission economies”. Among these initiatives, interested IPEF members have agreed on a “regional hydrogen initiative to encourage widespread deployment of low-carbon and renewable hydrogen and its derivatives”.
In terms of the fair economy pillar, IPEF welcomed progress on “effectively implementing and accelerating progress on anti-corruption measures and tax initiatives, including through enhanced cooperation on capacity building and technical assistance”.
While India isn’t a part of the trade pillar, the other IPEF members affirmed their commitment to “craft high-standard, inclusive, free, fair, and open trade commitments that build upon the rules-based multilateral trading system.”