Title

INDO-PACIFIC ECONOMIC FRAMEWORK FOR PROSPERITY AGREEMENT RELATING TO SUPPLY CHAIN RESILIENCE

Preamble

The Parties to this Agreement:

ACKNOWLEDGING that:

resilience, efficiency, productivity, sustainability, transparency, diversification, security, fairness, and inclusivity are indispensable considerations in the development of resilient and robust supply chains, in addition to costs;

supply chain development can be a source of quality job creation, poverty reduction, and economic opportunity for their enterprises, especially MSMEs, workers; and communities, including women, Indigenous Peoples, persons with disabilities, rural and remote populations, minorities, and local communities;

supply chain disruptions may be due to, among other causes, pandemics and regional epidemics, weather events, disasters declared or recognized by a central, regional, or local government, cyber incidents, logistical interruptions, insufficient supply of raw materials or components, bottlenecks, or armed conflict;

supply chains benefit from the establishment of predictable, fair, and competitive markets that respect the environment, health and safety, and labor rights;

secure and resilient supply chains must be developed, maintained, and prepared to respond effectively to unexpected events;

stakeholder engagement is essential to the promotion of supply chain resilience, particularly engagement with the private sector, given the leading role it plays in the development and management of supply chains, as well as representative workers' organizations;

reliable infrastructure is essential for effective supply chain management and to facilitate secure sharing of data between freight and logistics partners;

the different economic and geographic characteristics and capacity constraints of each Party are vital considerations in relation to their collective supply chain resilience efforts; and

fair and open markets underpinned by the rules-based multilateral trading system, with the WTO at its core, are fundamental to building resilient supply chains, and the Parties intend to act consistently with their respective obligations under the WTO Agreement; and

SEEKING to:

enhance supply chain transparency and information sharing between the Parties and the private sector, consistent with each Party's domestic law and policy, in order to promote risk awareness and identify bottlenecks and supply chain disruptions;

encourage supply chain diversification through the use of multiple suppliers to promote resilience and inclusivity, foster interconnectedness, advance shared prosperity across and within the Parties, and guard against economic vulnerability arising from global import concentrations;

mobilize investments, encourage technical cooperation, and foster opportunities for the development of a skilled workforce, critical infrastructure, industrial capacities, and enhanced connectivity;

raise awareness of the instrumental role that inclusive trade and investment policies play within supply chains and their contribution to sustainable economic growth;

promote supply chains in which labor rights, as defined by this Agreement, are respected, and create market demand for sustainable and responsible sources of supply;

raise awareness of potential supply shortages, supply chain bottlenecks and other similar risks to help safeguard against supply chain disruptions and their adverse secondary effects;

cooperate to address logistical bottlenecks and vulnerabilities in the Parties' supply chains, including those that may arise in the context of land, air, and maritime and waterway

transport, warehousing, port-related services, and infrastructure; and

minimize market distortions, protect confidential business information, promote regulatory compliance, and respect market principles,

HAVE AGREED as follows:

Body

Section A. Definitions

Article 1. Definitions

For the purposes of this Agreement:

Agreement means the Indo-Pacific Economic Framework for Prosperity Agreement Relating to Supply Chain Resilience;

central level of government means:

(a) for Australia, the Commonwealth Government;

(b) for Brunei Darussalam, the national level of government;

(c) for the Republic of Fiji, the national level of government;

(d) for the Republic of India, the Central Government;

(e) for the Republic of Indonesia, the central level of government;

(f) for Japan, the Government of Japan;

(g) for the Republic of Korea, the central level of government;

(h) for Malaysia, the federal level of government;

(i) for New Zealand, the national level of government;

(j) for the Republic of the Philippines, the national level of government;

(k) for the Republic of Singapore, the national level of government;

(l) for the Kingdom of Thailand, the national level of government;

(m) for the United States of America, the federal level of government; and

(n) for the Socialist Republic of Viet Nam, the national level of government;

critical sectors means 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, as identified by that Party in accordance with Article 10;

days means calendar days;

enterprise means any entity constituted or organized under applicable law, whether or not for profit, and whether privately or governmentally owned or controlled, including any corporation, trust, partnership, sole proprietorship, joint venture, association, or similar organization;

ILO means the International Labour Organization;

ILO Declaration means the JLO Declaration on Fundamental Principles and Rights at Work and its Follow-up (1998), as amended in 2022;

IPEF means the Indo-Pacific Economic Framework for Prosperity;

IPEF Labor Rights Advisory Board or Board means the IPEF Labor Rights Advisory Board established under Article 8.2;

IPEF supply chain body means the IPEF Supply Chain Council, the IPEF Supply Chain Crisis Response Network, the IPEF Labor Rights Advisory Board, or the Subcommittee established under Article 8.4;

IPEF Supply Chain Council or Council means the IPEF Supply Chain Council established under Article 6.1;

IPEF Supply Chain Crisis Response Network or Network means the IPEF Supply Chain Crisis Response Network established under Article 7.1;

IPEF supply chains means the economic, commercial, and trade relationships between and among enterprises in the economies of the Parties;

key goods means raw, in-process, or manufactured materials, articles, or commodities, the absence of which could have a significant effect on a Party’s national security, public health and safety, or prevention of significant or widespread economic disruptions, as identified by that Party in accordance with Article 10;

labor rights means:

(a) the following rights, set out in the ILO Declaration: (1)

(i) freedom of association and the effective recognition of the right to collective bargaining;

(ii) the elimination of all forms of forced or compulsory labor;

(iii) the effective abolition of child labor and, for the purposes of this Agreement, a prohibition on the worst forms of child labor;

(iv) the elimination of discrimination in respect of employment and occupation; and

(v) a safe and healthy working environment; and (b) acceptable conditions of work with respect to minimum wages and hours of work; (2)

measure includes any law, regulation, procedure, requirement, or practice;

MSMEs means micro, small, and medium-sized enterprises;

Party means any State or separate customs territory for which this Agreement is in force; person means a natural person or an enterprise;

publish means to disseminate information through paper or electronic means that is readily accessible to the general public;

related essential services means services directly related to the production or movement of goods within critical sectors;

supply chain disruption means a severe interruption, delay, or shortage that (a) impacts one or more Parties; and (b) significantly impairs the production of, the cross-border movement of, or access to, materials, articles, or commodities or the delivery of related essential services, as determined by an affected Party;

WTO means the World Trade Organization; and

WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh, April 15, 1994.

Section B. Building Stronger IPEF Supply Chains

Article 2. Collaborating to Strengthen IPEF Supply Chains

1. The Parties intend to undertake cooperative activities to increase the resilience, efficiency, productivity, sustainability, transparency, diversification, security, fairness, and inclusivity of IPEF supply chains, taking into account the different economic and geographic characteristics and capacity constraints of each Party as well as the individual characteristics of different sectors and goods.

2. The Parties intend to explore new ways and enhance existing efforts to improve the attractiveness of investment opportunities in IPEF supply chains.

3. The Parties intend to promote, facilitate, and 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. This may include:

(a) organizing investment missions and encouraging public-private joint efforts and other business matching activities to help enterprises identify potential partners in the economies of the Parties; and

(b) sharing expertise on project scoping, structuring, and implementation.

4. The Parties intend 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.

5. The Parties intend to align guidance, procedures, and policies related to trade facilitation to the extent possible, and to share best practices to help enterprises benefit from such guidance, procedures, and policies.

6. The Parties intend to exchange best practices in cargo risk assessment and 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.

7. The Parties intend to share information on practices through which mutual recognition arrangements with respect to their Authorized Economic Operator (AEO) programs can bolster supply chain resilience.

8. The Parties intend to encourage production of key logistics inputs (3) by enterprises in the economies of the Parties to meet market demand and diversification of source markets, with a particular focus on enhancing the resilience and competitiveness of IPEF supply chains.

9. The Parties intend to promote efficient and sustainable production, use, and recycling of resources as part of more circular economies to help reduce the need to create new sources of goods while respecting each Party's domestic law and policy.

10. The Parties intend to encourage the development and adoption of digital standards and frameworks that support information technology interoperability and data flows among freight and logistics enterprises to enhance efficiency, transparency, and security.

11. The Parties intend to encourage the publication in English of electronic versions of forms issued or controlled by a Party for the importation into, exportation from, or transit through the territory of that Party of goods.

12. The Parties intend to cooperate to provide technical assistance and capacity building to prevent asbestos-related diseases and to promote transition from the use of asbestos to safer alternative products in IPEF supply chains.

13. The Parties intend to explore joint research and development projects to foster innovation in IPEF supply chains.

14. The Parties intend to use tools such as risk and readiness assessments, economic development programs, and technical assistance and capacity building to help enterprises, particularly manufacturers that are MSMEs, to:

(a) identify risks to their supply chains, such as cybersecurity risks and risks from single- or sole-source providers;

(b) diversify inputs, particularly from other Parties, into their production;

(c) increase their industrial capacity and productivity;

(d) adopt advanced manufacturing and supply chain technologies;

(e) enhance their ability to purchase inputs;

(f) access financing, including where appropriate through export credit and development finance agencies;

(g) manage logistics costs and benefit from economies of scale;

(h) adopt and comply with relevant international standards, including through support to meet testing and certification requirements; or

(i) better understand, manage, and reduce their cybersecurity risk and proactively protect their networks, systems, and data.

Article 3. Taking Action to Strengthen IPEF Supply Chains

1. Each Party is committed to minimizing unnecessary restrictions or impediments creating barriers to trade affecting the resilience, efficiency, productivity, sustainability, transparency, diversification, security, fairness, and inclusivity of IPEF supply chains.

2. Each Party intends to establish or maintain one or more focal points or appropriate mechanisms to facilitate foreign direct investment into its market. The focal points or mechanisms may assist investors or persons seeking to invest within that Party in obtaining relevant information from competent authorities or help resolve problems that may occur in the investment process covered by this Agreement, to the extent feasible.

3. Each Party intends to adopt or maintain procedures that provide, under normal circumstances, for the release of perishable goods as soon as possible following receipt of all documents and fulfillment of all applicable procedures and requirements.

4. Each Party intends to the extent possible to foster the increased availability of and investment in long-term and cold-chain warehousing near or easily accessible to ports of entry, and to avoid discriminatory policies and procedures that limit warehousing options for imported goods.

5. Each Party intends to facilitate authorized transportation worker access to land, air, and sea port-of-entry and related facilities, subject to applicable domestic measures related to travel documents and authorizations.

6. Each Party intends to foster increased participation by its stakeholders, particularly MSMEs, in international standards development processes related to supply chain efficiency, sustainability, security, and resilience.

7. Each Party intends to create or maintain opportunities to consult with and consider input and recommendations from the private sector and representative workers' organizations, as appropriate, on an ongoing basis in the development of policies and measures related to the resilience, efficiency, productivity, sustainability, transparency, diversification, security, fairness, and inclusivity of IPEF supply chains.

8. Each Party, in consultation with the private sector and representative workers’ organizations, intends to explore supply chain mapping approaches, including chain-of-custody protocols and utilization of production- and logistics-related data where appropriate and feasible, with the goal of improving supply chain transparency from raw materials to finished goods, with a particular focus on critical sectors and key goods.

Article 4. Promoting Regulatory Transparency to Bolster IPEF Supply Chains

1. The Parties recognize that regulatory transparency, objectivity, accountability, and predictability can support the resilience of IPEF supply chains and help enable investment in critical sectors or key goods.

2. Each Party is committed to publishing its domestic laws and regulations related to IPEF supply chains adopted or maintained at the central level of government and, if requested, providing relevant public information, to the extent practicable, to other Parties, including details related to any applicable exceptions or exemptions.

3. In a manner consistent with its domestic laws and regulations, each Party is committed to providing other Parties a reasonable opportunity to comment on proposed regulations at the central level of government likely to significantly impact IPEF supply chains, to the extent practicable. (4)

Article 5. Enhancing the Role of Workers

1. The Parties intend to collaborate to help each Party ensure that a sufficient number of skilled workers are available in supply chains for its critical sectors or key goods, including by upskilling and reskilling workers through increased access to quality education, training, and capacity building. Such activities may include business-academia collaborations.

2. The Parties intend to undertake efforts consistent with each Party's domestic law to promote the inclusivity of IPEF supply chains, including by ensuring that resources and formal training opportunities are available to and can be accessed equitably by all persons, including women, Indigenous Peoples, persons with disabilities, rural and remote populations, minorities, and local communities.

3. Each Party intends to continue promoting the implementation of labor rights in its economy and the domestic enforcement of its labor laws.

4. Each Party intends to create or maintain opportunities to consult with and consider input and recommendations from the private sector and representative workers' organizations on an ongoing basis in the development of policies and measures related to labor rights.

5. The Parties intend that efforts to improve supply chain resilience pursuant to this Agreement be undertaken in a manner consistent with labor rights.

6. The Parties intend to support efforts to increase understanding and comparability of skills credentials frameworks with respect to qualifications, occupations, and skill clusters in critical sectors and key goods.

Article 6. IPEF Supply Chain Council

1. The Parties hereby establish an IPEF Supply Chain Council composed of a relevant senior official from the central level of government of each Party.

2. Each Party shall notify the other Parties of its designated IPEF Supply Chain Council member no later than 30 days after the date of entry into force of this Agreement for that Party, and thereafter shall notify the Council of any change in its designated member as soon as practicable.

3. No later than 60 days after the date of entry into force of this Agreement, the IPEF Supply Chain Council shall, following approval by two-thirds of its members, elect a Chair to serve a two- year term. The Chair shall convene Council meetings and coordinate Council activities.

4. No later than 120 days after the date of entry into force of this Agreement, and following approval by consensus of the members of the IPEF Supply Chain Council, the Council shall establish terms of reference setting out procedures related to Council operations, including procedures for decision-making, reviewing the terms of reference, and establishing Action Plan teams pursuant to paragraph 7(b).

5. Each Party shall provide to the IPEF Supply Chain Council, annually or as otherwise decided by the Council, a written report on its efforts to implement Articles 2 through 5 and 11.

6. The IPEF Supply Chain Council may periodically publish a non-confidential summary of its activities.

7. The IPEF Supply Chain Council shall meet in person or virtually on an annual basis, or as otherwise decided by the Council, to:

(a) review and discuss each Party's written report provided pursuant to paragraph 5;

(b) establish teams to develop Action Plans providing recommendations to increase the resilience and competitiveness of critical sectors or key goods from among those notified by at least three Parties in accordance with Article 10; (5)

(c) review and discuss Action Plans submitted to the IPEF Supply Chain Council;

(d) review and discuss any labor rights concerns and recommendations of which it is informed by the IPEF Labor Rights Advisory Board pursuant to Article 8.7; and

(e) discuss opportunities to support skills and workforce development activities.

8. The IPEF Supply Chain Council may, as decided by the Parties:

(a) explore opportunities to develop best practices in relation to policies, measures or actions impacting trade in critical sectors or key goods; or

(b) discuss any possible collaboration in relation to policies, measures, or actions to enhance the resilience, efficiency, productivity, sustainability, transparency, diversification, security, fairness, and inclusivity of IPEF supply chains.

9. The IPEF Supply Chain Council shall consider areas in which technical assistance and capacity building could increase the resilience, efficiency, productivity, sustainability, transparency, diversification, security, fairness, and inclusivity of IPEF supply chains.

10. The IPEF Supply Chain Council may consider the creation of an independent mechanism, such as a Chief Executive Officer forum related to IPEF supply chains, with the goal of generating representative private sector recommendations on ways to improve the resilience, efficiency, productivity, sustainability, transparency, diversification, security, fairness, and inclusivity of IPEF supply chains. (6)

11. No later than 30 days after the date of establishment of an Action Plan team, a Party choosing to participate in the Action Plan team shall designate a relevant official from the central level of government as its lead representative for that team. (7) Each Party shall seek to select representatives for different Action Plan teams based on their relevant expertise. For greater certainty, a Party may elect not to participate in a particular Action Plan team at its discretion.

12. No later than one year after the date of establishment of an Action Plan team and following approval by consensus of the Action Plan team, the team chair, on behalf of the Action Plan team, shall submit its Action Plan to the IPEF Supply Chain Council. If consensus is not reached within one year of the date of establishment, the team chair shall submit a provisional Action Plan to the IPEF Supply Chain Council noting any areas of disagreement.

13. An Action Plan may include recommendations: (8)

(a) to promote diversification of sources where market concentration exists for the sector or good;

(b) regarding raw material needs, demand expectations, manufacturing and processing capacities, and storage availabilities in the economies of the Parties;