Thailand, the United States, Japan and 11 other countries in the Indo-Pacific region have agreed to build supply chain resilience.
The agreement, which mainly covers essential goods and technologies such as semiconductors and medicines, was reached at a meeting of the US-led Indo-Pacific Economic Framework in Detroit on Saturday May 20 and will respond more quickly to emergency situations.
This is the first tangible result of the initiative since its launch last May.
It is hoped that this initiative will reduce over-reliance on China, which has increased its economic weight in the region.
After the negotiations, Japan’s Minister of Economy, Trade and Industry, Yasutoshi Nishimura, told reporters that the multilateral agreement was the “first of its kind on supply chains”.
According to a statement released later, partner states of the Indo-Pacific Economic Framework for Prosperity (IPEF) plan to develop a system to collectively identify significant supply chain risks, with each partner monitoring and delimiting its own critical sectors.
They also aim to ensure the timely delivery of critical goods in the event of a crisis by improving coordination and response procedures among IPEF partners, according to the statement.
Although the statement did not specifically mention goods considered essential, a Japanese official said the aim was to target critical minerals, semiconductors, new energy technologies and other resources or equipment that could have a significant impact on society if supplies were interrupted.
The agreement aims in particular to “increase the resilience, efficiency, productivity, sustainability, transparency, diversification” and “security” of supply chains through collaborative activities and individual actions. from IPEF partner countries, according to the statement.
The issue of supply chain disruption, particularly for goods such as food, energy and key industrial products, has come to light following the Covid-19 pandemic and Russia’s invasion of Ukraine.
Supply chain resilience is one of IPEF’s four pillars, along with fair trade, clean energy, taxation and anti-corruption.
With regard to clean energy, interested IPEF partner countries will launch a regional hydrogen initiative to encourage the large-scale deployment of renewable and low-carbon hydrogen, as well as its derivatives in the region.
With issues of tariff reduction and market access excluded from negotiations, IPEF partner countries appear set to reach a comprehensive deal in November, as leaders of the Economic Cooperation Forum Asia-Pacific will meet in San Francisco.
At the first ministerial meeting held in Los Angeles last September, IPEF partner states agreed to begin formal negotiations on establishing a rules-based economic order in the region. fast growing.
The US-led initiative, launched by President Joe Biden last year during his trip to Japan, is also seen as a symbol of the re-engagement of the world’s largest economy in the region after its withdrawal from the Trans-Pacific Partnership Free Trade Agreement in 2017.
The IPEF represents approximately 40% of the world’s gross domestic product.
It currently includes Australia, Brunei, Fiji, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand, the United States and Vietnam. Name.
Canada is also looking to join the framework.
Source: Bangkok Post