Indo-Pacific Nations, US to Set up Supply Chain Crisis Hotline

Trade ministers of 14 countries in the US-led Indo-Pacific Economic Framework (IPEF) reached their first tangible deal after year-long negotiations, “substantially” completing talks on supply chains resilience, the US Commerce Department said on Saturday 27 May.

 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 on potential supply disruptions, US Commerce Secretary Gina Raimondo told a press conference in Detroit.

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

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

Supply chains negotiations are one of four “pillars” of the IPEF, which represents the Biden administration’s main economic initiative in Asia. It is 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 Asia Pacific Economic Cooperation (APEC) trade talks in Detroit, which wrapped up on Friday with a pledge for more inclusive trade but no joint statement.

The other three IPEF pillars — trade, climate transition, and labor 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.

IPEF’s 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, labor, environmental standards and trade facilitation.

Tai added that IPEF “from the very beginning, is not a traditional trade deal. We’re not just trying to maximize efficiencies and liberalization. We’re trying to promote sustainability, resilience and inclusiveness.”

“We have more work to do but I am confident that we will start seeing results under Pillar 1 in the months ahead,” Tai said.