On May 27, 2023, India and the 13 other partner countries of the Indo-Pacific Economic Framework for Prosperity (IPEF), the Economic initiative led by the United States, announced the substantial conclusion of the negotiations of a first-of-its-kind international ‘IPEF Supply Chain Agreement’ at the IPEF Ministerial Meeting which was held in Detroit, Michigan, United States of America(USA).
Union Minister Piyush Goyal, Ministry of Commerce and Industry, participated in the IPEF discussions virtually.
- Objective: The agreement over Supply Chain (Pillar II) aims to increase the resilience, efficiency, productivity, sustainability, transparency, diversification, security, fairness, and inclusivity of the 14 partner nations’ supply chains through both collaborative activities and individual actions taken by each IPEF partner.
- The 14 IPEF partner nations include India, the United States, Australia, Brunei Darussalam, Fiji, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam.
i.Under the IPEF Supply Chain Agreement, the IPEF partners seek to improve crisis coordination and response to supply chain disruptions.
ii.The proposed IPEF Supply Chain Agreement considers the establishment of 3 new IPEF Supply Chain bodies such as IPEF Supply Chain Council, IPEF Supply Chain Crisis Response Network, and IPEF Labor Rights Advisory Board, to facilitate cooperation among the IPEF partners on supply chain issues.
iii.IPEF partners also released summaries of the ministerial meeting for Pillars I (Trade), III (Clean Economy), and IV (Fair Economy).
- The member countries have made an international agreement on a wide variety of issues or ‘pillars’, which include Trade, Supply Chains, Clean Economy, and Fair Economy. India is the only partner out of the 14 nations that is not a part of the Trade pillar.
iv.The 14 partner countries of IPEF represent about USD 38 trillion in economic output and the IPEF members are among the biggest trading partners of US.
About Indo-Pacific Economic Framework for Prosperity (IPEF)
i.IPEF is an economic initiative launched by President of the United States Joe Biden on May 23, 2022. The framework launched with a total of 14 participating founding member nations in the Indo-Pacific region with an open invitation for other countries to join.
ii.Through this initiative, the IPEF partners aim to contribute to cooperation, stability, prosperity, development, and peace within the region.
iii.The 14 IPEF partners represent 40% of global GDP and 28 percent of global goods and services trade.
Recent Related News:
On November 22, 2022, the Parliament of Australia approved the India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) by passing Ind-Aus ECTA Bill and the DTAA (Double Taxation Avoidance Agreement).
About United States (US):
President – Joseph Robinette Biden Jr.
Capital – Washington, D.C.
Currency – United States dollar (USD)