THE 14 member countries of the US-led Indo-Pacific Economic Framework (Ipef) on Tuesday inked a “prosperity agreement” which aims to develop supply chain resilience to generate more jobs and reduce poverty, among others.
Ipef is currently being negotiated by 14 countries in the region. Aside from the United States and the Philippines, other IPEF members are Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Singapore, Thailand and Vietnam.
According to the Ipef Framework for Prosperity Agreement Relating to Supply Chain Resilience, these countries have acknowledged that “supply chain development can be a source of quality job creation, poverty reduction, and economic opportunity for their enterprises, especially micro, small and medium enterprises (MSMEs), workers; and communities including women, Indigenous Peoples, persons with disabilities, rural and remote populations, minorities, and local communities.”
As these member nations recognize that supply chain disruptions may occur due to pandemics, weather events, disasters, logistical interruptions and insufficient supply of raw materials or components, bottlenecks, or armed conflict, the 14 member countries of Ipef have agreed to collaborate to strengthen supply chains within the Indo-Pacific region.
Among the goals set by these countries under the agreement is to “foster improvements in
logistics services and logistics infrastructure, as well as in the development of multimodal transport corridors, including by exploring the development, upgrading, or digitalization of ports, logistics hubs, roads, and freight railways.”
Another objective of the Ipef members is to encourage production of “key logistics inputs” which include warehousing equipment, long-haul ships, commercial aircraft, shipping containers, chassis, cranes, freight trucks, rail cars and their respective components.
Based on the agreement, the production of these key logistics inputs by enterprises in the economies of the parties is aimed at meeting market demand and “diversification” of source markets, with a particular focus on enhancing the resilience and competitiveness of IPEF supply chains.
In the area of cargo risk assessment, the agreement noted that the parties intend to exchange best practices in this area “to consider developing programs to securely share data as necessary for international cargo security to the extent possible, consistent with each Party’s domestic laws and regulations, including with respect to the protection of business confidential information.”
Under the agreement, the Ipef member nations also aim to encourage investment in “critical sectors; the production of key goods; the development, maintenance, and upgrading of physical and digital infrastructure; and transportation and workforce projects.”
Critical sectors, as defined in the agreement, are “sectors that produce goods and supply any related essential services critical to a Party’s national security, public health and safety, or prevention of significant or widespread economic disruptions.”
Meanwhile, in a recent televised interview, Procurement and Supply Institute of Asia (Pasia) President Charlie Villaseñor divulged that a “chaotic scenario” is expected for Asian firms in the next 24 months due to issues on demand visibility brought by geopolitical conflicts impacting supply chains.
Of the 14 member nations in Ipef, there are 10 Asian countries.
“There’s a lot of things going on—reverse globalization, or supply chain diversification—countries are going to be moving towards more geopolitical politics, even though they don’t want to do it, but they’re being forced to address this also; there seems to be still an issue on demand visibility,” Villaseñor said. (Full story here: https://businessmirror.com.ph/2023/11/14/asian-firms-face-chaotic-2024-2025-on-supply-chain-woes/)