The recent decision by the Cabinet, upon the proposal of the Ministry of Foreign Affairs, to approve and support the Economic Cooperation Framework between Indonesia and the Pacific (IPEF) stands as a pivotal step toward fostering economic resilience, particularly in strengthening the robustness of supply chain systems. This resolution underscores the commitment to join and adhere to the economic collaboration within the IPEF.
The approval involves the endorsement of the draft agreement for economic cooperation, emphasizing the significance of supply chain resilience. However, it grants flexibility for necessary adjustments in non-substantial clauses before formal signing, empowering the Ministry of Foreign Affairs to proceed without reapproval from the Cabinet.
Furthermore, the Cabinet’s mandate authorizes the Deputy Prime Minister and relevant ministers or their authorized representatives to sign the agreement during the Ministerial IPEF meeting in San Francisco, USA. This approval extends to granting Full Powers to the signatories, enabling them to represent the government’s stance during the signing process.
This directive also involves empowering pertinent agencies to ensure the enforceability of the agreement. The Ministry of Foreign Affairs is specifically tasked with compiling the accord’s legal documentation after receiving confirmation of its completion from the Ministry of Industry concerning the necessary domestic processes for enforceability.
The significance of this resolution lies in the participation of IPEF member countries, comprising a consortium including Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, the United States, and Vietnam. Their collaborative efforts have led to the formulation of an all-encompassing economic cooperation document, focusing on supply chain resilience and economic prosperity in the Indo-Pacific region.
The outlined objectives within the agreement aim to promote transparency, diversity, and strengthen supply chains, supporting comprehensive trade and investment policies. The agreement also addresses labor issues, infrastructure development, industrial capacity building, and fostering cooperation among various supply chain-related sectors.
Crucially, the agreement avoids stipulations that could necessitate internal legal amendments within participating countries, steering clear of enforcement mechanisms that might hinder consent. Article 21 of the draft mandates at least five IPEF signatories to confirm or approve the agreement, which then becomes enforceable 30 days post-confirmation by the signatory countries.
The practical benefits of participating in this agreement lie in fostering international cooperation, reducing trade vulnerabilities, and managing potential supply chain disruptions. This collaboration not only fortifies investment environments and augments trade value but also facilitates efficient risk mitigation strategies during supply chain crises. Additionally, it enhances labor roles and involvement within these supply chains.
Moreover, preliminary research by Thai research institutions suggests substantial advantages for Thailand under the second pillar of cooperation, enabling access to crucial data and networks, drawing investments to key economic sectors, and offering avenues for trade collaboration to bolster exports from Thailand.
In conclusion, the decision to join the Economic Cooperation Framework aligns with Thailand’s pursuit of a robust, resilient, and globally connected economy, underscoring a commitment to fortifying supply chain resilience and fostering economic growth in the Indo-Pacific region.