Australia and 13 other Indo-Pacific Economic Framework (IPEF) countries announced a ‘ground-breaking’ agreement aimed at addressing modern supply chain challenges.
The agreement aims to ensure Australia’s access to vital goods, reduce market instability, and enable businesses and consumers to adapt and remain resilient during times of crisis.
Under the IPEF Supply Chains Agreement, participating countries, including Australia, will collaborate to gain a shared understanding of global supply chain risks. This will involve evidence-based identification of critical sectors and key goods. Australia, together with the Republic of Korea, will lead a joint initiative to enhance the capacity of other IPEF partners in identifying, monitoring, and managing vulnerabilities in critical supply chains.
The newly established IPEF Supply Chains Agreement will create a Crisis Response Network to enable faster collective responses to critical shortages and disruptions, ensuring Australia’s access to essential goods and promoting market stability.
Additionally, the agreement will establish an IPEF Supply Chains Council to develop action plans targeting vulnerabilities and bottlenecks, driving investment and value-adding opportunities in critical sectors like clean energy technologies. The IPEF partners will now focus on signing, ratifying, and implementing the Supply Chains Agreement while exploring further collaborations in areas such as trade, clean economy, and anti-corruption measures.
The Australian government has allocated $25 million in the 2023-24 budget to support capacity building and technical assistance for the IPEF’s work agenda. For more information, refer to the IPEF media statements on the substantial conclusion of the Supply Chains Agreement.
What is IPEF?
IPEF, which stands for Indo-Pacific Economic Framework, is an initiative led by the United States that aims to strengthen economic collaboration and partnership among participating countries in the Indo-Pacific region. The primary objectives of IPEF include enhancing resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness.
IPEF was launched in 2021 with a coalition of twelve initial partners. These partners collectively represent 40 per cent of the global GDP, highlighting the significant economic influence and participation in the framework.
The IPEF is not structured as a traditional Free Trade Agreement (FTA). Instead, it allows member countries to negotiate and focus on specific areas of interest. The negotiations within IPEF are organised around four main pillars:
Supply-chain resilience: The focus is on addressing challenges and enhancing the resilience of supply chains to ensure the efficient flow of goods and minimise disruptions.
Clean energy, decarbonisation & infrastructure: This pillar aims to promote sustainable practices, clean energy technologies, and the development of infrastructure that supports environmental goals.
Taxation & anti-corruption: The focus is on developing measures to promote fair taxation systems and combat corruption, fostering a transparent and accountable business environment.
Fair & resilient trade: This pillar aims to promote fair trade practices, protect intellectual property rights, and create a resilient and balanced trade environment for participating countries.
The agreed IPEF media statements from the Detroit meetings can be found at IPEF Statement Pillar II Supply Chains Substantial Conclusion.
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