IPEF benefits

What are the potential benefits?

The Indo-Pacific Economic Framework for Prosperity is an opportunity to strengthen economic cooperation with the United States and across our wider home region.

IPEF will provide an open and inclusive platform for the US to engage more deeply in the economic architecture of the Indo-Pacific, which we think is valuable for both New Zealand and the wider region.

The Framework will cover some of the most important future-focused economic issues facing our region and the world, including harnessing the digital economy, decarbonising our economies, and making our supply chains more resilient.

The principles of sustainability and inclusivity are embedded throughout the Framework. These are principles that underpin New Zealand’s Trade for All Agenda, principles we are bringing to the table in discussions to ensure the benefits of this Framework are broadly shared by our peoples.

The IPEF will create new opportunities with major Indo-Pacific economies to cooperate on:

  • Trade
  • Supply chains
  • Clean economy
  • Fair economy

Potential Benefits of the Supply Chains agreement

The agreement sets out a range of collective and individual actions that Parties intend to take to improve the resilience, efficiency, productivity, sustainability, transparency, diversification, security, fairness, and inclusivity of IPEF Supply Chains.  In particular, the agreement will help New Zealand address future disruptions, by:

  • Developing a shared understanding of global supply chain risks, through each Party identifying their critical sectors and key goods in their supply chains;
  • Promoting regulatory transparency in IPEF supply chains;
  • Monitoring and addressing supply chain vulnerabilities;
  • Strengthening the capability of workers involved in supply chains; and
  • Establishing a Crisis Response Network to provide an emergency communications channel and facilitate collaboration through which Parties are able to support each other in the event of a supply chain disruption.

Implementation of the agreement envisages the involvement of a diverse range of stakeholders involved in IPEF supply chains, including businesses and workers, but also our wider communities which will have an important role to play in strengthening supply chain resilience.

Another feature of the new agreement is a mechanism to work together with other IPEF countries on labour concerns raised about specific facilities. This will help promote responsible business conduct and transparency in terms of upholding labour rights in supply chains. 

Why work on supply chain resilience?

New Zealand has been particularly hard hit by supply chain disruption since 2020. Exporters and importers struggled to get cargo in and out of New Zealand by sea and air. Chronic delays have driven up costs and disrupted supply and production. Supply chain disruption has contributed directly to the global spike in inflation and cost of living that is hitting New Zealand households.

According to the Customs Brokers and Freight Forwarders Association, the cost of sending a shipping container from New Zealand to the US grew from $2000 to $10,000 at the peak of the disruption. The time taken for shipping containers to travel across major global shipping routes skyrocketed from under 60 days in 2019 to an all-time high of more than 120 days in 2022, according to Flexport’s Ocean Timeliness Indicator.

Through the IPEF supply chains agreement, countries will commit to share information, identify stress points and come up with practical solutions to supply chain disruptions experienced in the wake of the COVID-19 pandemic and into the future.


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