US seeks enterprise-based probe into errant firms under IPEF deal

The US has put forward a proposal under which member countries of the Indo-Pacific Economic Framework (IPEF) can seek enterprise-based investigation to address specific concerns in a company through a Tripartite Labour Committee comprising a representative each from the government, employer, and labour union. The idea is to generate awareness among consumers about companies violating labour norms and ensure that goods and services of such firms are not consumed.

“Given that the International Labour Organization (ILO) already has such a tripartite mechanism for all its member nations, the Indian government believes a similar framework under IPEF will lead to duplication and has sought feedback from the industry on the same,” a person in the know told Business Standard.

The other labour-related issues proposed under IPEF include just transition of workforce development focussing on skilling, reskilling and upskilling; skilling in smart manufacturing technologies; mutual recognition agreements for easy temporary movement of skilled workers and professionals.

“The proposed labour norms under IPEF include ensuring safe work conditions; protection of the workers right to organise, and secure decent work, living wages and basic social security; promote gender equality and fair income distribution; and conduct human rights due diligence,” the person said.

The US has also proposed possible business-academia tie-ups to increase the availability of skilled workers and consultations with business and worker associations to develop policies.

Business Standard on May 9 reported that India was concerned that a proposal by the US under the “supply chains” pillar of the IPEF that seeks to mandate partner countries to provide advance notice on tariff changes and export restrictions could amount to violation of multilateral rules as well as loss of policy space.

The IPEF has four pillars: trade, supply chains, clean economy, and fair economy. India is yet to take a call on joining the trade pillar, though it is a part of the other three. The third round of negotiations concluded in Singapore on Monday.

In a statement released on Monday, the USTR said building on the discussions that took place during the second negotiating round in Bali, Indonesia, in March 2023, the US delegation successfully led in-depth discussions with IPEF partners where “the IPEF partners continued to make strong progress on a wide range of issues across the four pillars”.

The IPEF negotiating round hosted by Singapore is the final round prior to the IPEF Ministerial in Detroit, Michigan, on May 27, 2023, which will be hosted by the US Secretary of Commerce Gina Raimondo and United States Trade Representative Katherine Tai.

On the margins of the Singapore round, the US delegation also held briefings with congressional staff and participated in a listening session with a wide range of stakeholders, including civil society, labour, academia, and the business community.

“These briefings and listening sessions reflect the Biden-Harris Administration’s continued commitment to ensuring transparency and providing the public with additional insights into the IPEF negotiations,” the statement said.

The IPEF members represent 40 per cent of the global gross domestic product and 28 per cent of the world’s trade.

The IPEF is designed to strengthen economic cooperation among Indo-Pacific nations and is perceived to be a strategic counter to China’s growing clout in the region. Apart from India and the US, it has 12 other members: Australia, Brunei, Fiji, Indonesia, Japan, South Korea, Malaysia, New Zealand, The Philippines, Singapore, Thailand, and Vietnam.