In One Sentence

• The U.S. and 17 partnering nations of the Supply Chain Ministerial Forum will increase transparency to strengthen global supply chains. 
• A leaked draft joint statement on the trade pillar of the Indo-Pacific Economic Framework (IPEF) outlined only broad trade commitments.
• A ministerial meeting of the Indo-Pacific Economic Framework for Prosperity countries is being held on July 26-27.
• The U.S. and Thailand signed a memorandum of understanding on supply chain resiliency to boost ties in critical areas like electric vehicles and batteries.

Mark the Essentials

• At the conclusion of the virtual Supply Chain Ministerial Forum meeting, the U.S. and 17 other nations committed to cooperatively pursue four principles in supply chain operations: transparency, diversification, security and sustainability.
• The leaked draft of the forthcoming IPEF ministerial meeting showed that except the U.S., the other 14 participants of the IPEF have not yet agreed to join the four pillars of the framework, which covers supply chain resiliency, clean energy infrastructure as well as tax and anticorruption.
• The U.S. and Thailand will share information on “markets, disruptions, shortages, or restrictions related to critical supply chains” and focus on key areas “such as electronics and their components, medicines, pharmaceuticals, health products, medical devices, safety equipment, telecommunications equipment, energy products, and electric vehicles.”

Keeping an Eye On…

• The May 23rd unveiling of the Indo-Pacific Economic Framework (IPEF) in Tokyo was a less-than-stirring moment in the history of regional trade liberalization. The sparse two-page joint statement amounted to a willingness to inaugurate collective discussions towards future negotiations—not actually launch negotiations. As such, it should come as no surprise that the first post-launch ministerial meeting appears to have little to show by way of firm commitments. It bears remembering though that even after a dozen rounds of the Trans-Pacific Partnership (TPP) negotiations in the early-2010s, there were large gaps within the negotiation text. All of that changed in year two and year three of the second Obama administration as it raced to finalize the text and have it ratified under Trade Promotion Authority (TPA) rules before the clock ran out on its tenure in office. This, in turn, begs the operative question: What will be the forcing mechanism this time around that pushes the IPEF negotiations to the critical landing zone where many of the important reciprocal bargains are memorialized? The Obama administration more-or-less went through the TPP motions during its first term before ratcheting up the pace of negotiations during the second term. Judging by this short backstory, it is hard to see any driver that could instill urgency among the IPEF parties in the short or medium term. Aside from the Biden administration’s interest in wrapping up detailed supply chain commitments with a selective list of interested East Asian partners, the rest of the IPEF discussions are likely to muddle along aimlessly for the time being.

Expanded Reading

• U.S. to host first IPEF ministerial meeting, Politico, July 25, 2022
• Joint Statement on Cooperation on Global Supply Chains, Department of State, July 20, 2022
• IPEF draft ministerial text – trade pillar (Jul 2022), ISDS Bilaterals, July, 18, 2022
• United States-Thailand Communiqué on Strategic Alliance and Partnership, U.S. Embassy Bangkok, July 11, 2022