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14 IPEF countries sign Supply Chain Agreement

Posted May. 29, 2023 08:15,   

Updated May. 29, 2023 08:15


Participating countries of the Washington-led Indo-Pacific Economic Framework for Prosperity, including South Korea, signed the Supply Chain Agreement on Saturday (local time). Accordingly, they agreed to reduce dependency on China in the supply networks of semiconductors and core minerals and build a collective system to respond to any crisis that may arise if China weaponizes its resources.

The U.S. Commerce Department on Saturday issued a press release saying that the 14 IPEF countries reached a substantial conclusion at a ministerial meeting, assessing the agreement as the first of its kind agreed upon by the IPEF. Led by U.S. President Joe Biden, the community was founded last May to keep China in check with 14 member states, including South Korea, the United States, Japan, and India joining. In just six months after they initiated negotiations on four areas, such as trade, supply chains, and the clean economy last December, the group concluded the first agreement on supply chains.

The IPEF partners also agreed to implement an IPEF Supply Chain Crisis Response Network – an emergency channel for communication in case of any supply chain crisis. Additionally, they promised to create an IPEF Supply Chain Council to preemptively identify bottlenecks in supply chains and an IPEF Labor Rights Advisory Board to address labor issues in each member state.

Seoul expects South Korean companies to face reduced uncertainties in supply chains thanks to the IPEF agreement. However, some experts are concerned that Seoul’s joining the deal may rub China, the country’s No. 1 trade partner, the wrong way.

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