Korea seeks feedback for IPEF supply agreement draft

Indo-Pacific Economic Framework (IPEF) Ministerial Meeting in Los Angeles, U.S. in 2022. [Courtesy of Ministry of Trade, Industry and Energy]

The draft text of the Indo-Pacific Economic Framework (IPEF) for Prosperity Agreement Relating to Supply Chain Resilience was made public on Friday, following its conclusion in May 2023. The South Korean Ministry of Trade, Industry, and Energy announced public feedback on the draft, available in both English and Korean, can be submitted on the Free Trade Agreement website (www.fta.go.kr) between September 8 to October 4.

The 14 signatory countries, including Korea and the United States, announced the signing of the Supply Chain Resilience Agreement at the IPEF Ministerial Meeting in Detroit, United States, on May 27 (local time).

One of the key provisions of the agreement is the activation of a supply chain crisis response network comprised the 14 countries, to coordinate with each other in the event of a supply chain crisis.

According to the draft agreement, participating countries can request cooperation from related governments in areas such as matching supply and demand companies, joint procurement, identifying alternative shipping or air routes, and expeditious flow of goods within 15 days of a supply chain crisis.

The draft also emphasizes the need for the countries to refrain from taking actions that may negatively impact the supply chain. If a country’s actions are seen as potentially harming the supply chain, another participating country can request bilateral discussions within 60 days to address the issue.

The ministry said that in the past, resolving supply chain disruptions caused by the actions of specific governments took a considerable amount of time. With the IPEF in place, it is expected that the framework will speed up the process of finding solutions through dialogue and promote the establishment of reliable supply chains based on mutual trust.

A minimum of five out of the 14 participating countries must ratify the document for the Supply Chain Resilience Agreement to officially take effect.

The IPEF was officially launched last May under the leadership of U.S. President Joe Biden’s administration. The 14 signatory countries include the United States, South Korea, Japan, Australia, India, Thailand, Malaysia, Indonesia, Vietnam, the Philippines, Singapore, Brunei, New Zealand, and Fiji.

After negotiating the first agreement on supply chains in May, the participating countries will work through the remaining three main agenda items - trade, clean economy, and fair economy - with the goal of finalizing a deal by the end of 2023.