Talks on supply chains, clean economy and fair economy were held on May 27 in the US. Commerce and industry minister Piyush Goyal virtually participated in the ministerial meeting.
“At this meeting, negotiations under the Supply Chains (Pillar-II) were substantially concluded; while good progress was reported under the other IPEF Pillars,” the commerce and industry ministry said.
The proposed IPEF Supply Chain Agreement contemplates the establishment of three new IPEF supply chain bodies to facilitate cooperation among the partners, according to a press statement issued after the meeting by IPEF members. The three bodies are the supply chain council, the supply chain crisis response network and IPEF labour rights advisory board.
The proposed advisory board, comprising government, worker and employer representatives, and a subcommittee of government representatives, would support the IPEF partners’ promotion of labour rights in their supply chains, promotion of sustainable trade and investment, and facilitation of opportunities for investment in businesses that “respect labour rights”.
“The proposed labour advisory board would be intrusive and use labour standards to prevent members from importing components and then re-exporting them. This will affect our pharmaceutical exports,” said an expert on trade matters, who did not wish to be identified.
The proposed agreement on supply chains aims to increase the resilience, efficiency, productivity, sustainability, transparency, diversification, security, fairness and inclusivity of the supply chains through collaborative activities and individual actions taken by each IPEF partner. It would also seek to improve crisis coordination and response to supply chain disruptions and work together to support the timely delivery of affected goods during a crisis.IPEF partners will undertake the necessary steps, including further domestic consultations and a legal review, to prepare a final text of the proposed supply chain agreement.
Once finalised, the proposed pact will be subject to IPEF partners’ domestic processes for signature, followed by ratification, acceptance or approval.
The IPEF was launched jointly by the US and other partner countries of the Indo-Pacific region including Japan, Australia and seven ASEAN members, and is structured around four pillars – trade, supply chains, clean economy and fair economy (issues such as tax and anti-corruption). India has joined all the pillars except trade.
During his intervention under this pillar, Goyal urged expeditious implementation of all action-oriented cooperative and collaborative elements identified as part of this agreement.
Clean economy, fair economy
Under the fair economy pillar, IPEF partners are working on an agreement that will strengthen the implementation of effective anti-corruption and tax measures to boost commerce, trade and investment among IPEF economies.
“India needs to be careful as this will have obligations and implications on export taxes even if that is not specified in the agreement,” said the trade expert cited earlier.
As part of the clean economy pillar, the member countries aim to advance cooperation on research, development, commercialisation, availability, accessibility, and deployment of clean energy and climate-friendly technologies.