Led by the United States of America, 14 countries in the Indo-Pacific region including India, Japan, and South Korea, are close to reaching an agreement on coordinating the supply chains in the fast growing region. An announcement finalising the deal may be made in the upcoming week as they hope to put pen to paper by 27th May, according to the sources.
The discussions of the Indo-Pacific Economic Framework (IPEF) revolve around four key areas: supply chains, clean economy, fair economy, and trade. US Trade Representative Katherine Tai’s office is negotiating the trade pillar for the US, while the Commerce Department, led by Secretary Gina Raimondo, is supervising efforts on the other three.
While progress has been made on the supply chain aspect, some of the other areas, particularly trade, are more challenging. India is not participating in the trade discussions due to concerns about environmental and labor commitments. The ‘system’ being created will ultimately aim at providing early warning of possible disruptions to the supply chain, similar to the ones experienced during the pandemic.
The negotiations for the United States are being led by the Office of the United States Trade Representative (USTR), with the Commerce Department overseeing the other three areas. The USTR and the Commerce Department have not provided any official comments on the matter.
The IPEF was initiated by the United States in order to counter China’s increasing influence and ease out withdrawal symptoms as a result of excluding China from regional trade agreements. The participating nations, when seen as a single entity, represent over USD 34 trillion in economic output, accounting for about 41% of global production.
Negotiators recently held a third round of talks in Singapore, following earlier sessions in Bali, Indonesia, and Brisbane, Australia. According to a statement from the USTR, the countries made substantial progress across various issues related to the four pillars.