The U.S. has been actively engaging in efforts with other countries to strengthen global supply chains but is running into a number of related challenges, a recent Government Accountability Office report states.
The COVID-19 pandemic and Russia’s war in Ukraine have both disrupted global supply chains and highlighted their vulnerabilities. In response, GAO states, the Office of the U.S. Trade Representative and the departments of Commerce and State have expanded their diplomatic engagement on strengthening supply chains. These efforts have included initiating over a dozen dialogues, working groups, and forums to coordinate on supply chain resilience (e.g., through the U.S.-EU Trade and Technology Council, the Indo-Pacific Economic Framework, and the Summit on Global Supply Chain Resilience) as well as bilateral coordination with allies and partners (including Canada, Mexico, Japan, Korea, Taiwan, the United Kingdom, and Singapore) to develop supply chain principles and plans.
However, the report adds, USTR, DOC, and State have encountered the following challenges in coordinating supply chain resilience engagements with others.
Data collection. The private sector controls the majority of supply chains, and a lack of accessible data about private-sector supply chains has limited agencies’ ability to work with allies and partners to identify and address vulnerabilities. Companies may be reluctant to share data on their supply chains due to business confidentiality concerns or simply may not have the data. Moreover, the complexity of particular supply chains has limited agencies’ abilities to collect and manage data to assess supply chain structure and resiliency.
Trade agreements. Current U.S. trade agreements generally were not designed to address supply chain disruptions or build resiliency, and using trade agreements and preference programs toward this end (e.g., through their rules of origin) may require renegotiating current agreements, negotiating new agreements, or modifying preference programs. For long-term resilience, the U.S. will need policies that incentivize allies and partners to work with the U.S. to build resilient supply chains.
Delays. COVID-19 outbreaks have forced delays or virtual alternatives to in-person multilateral and bilateral meetings; the latter in particular can impede diplomatic coordination because they often lack opportunities to build relationships with foreign officials and limit chances to observe how countries respond to proposals.
Federal agencies have taken some actions in response to these challenges, including requesting interagency and private-sector input, compiling reports from overseas posts, mapping how goods flow through the production process for critical industries, and establishing early alert systems to identify and mitigate potential disruptions.
The GAO notes that information generated by these efforts has been shared within and among governments but gives no indication that doing so has had any noticeable effects. The report thus suggests that increasing the efficiency and resiliency of international supply chains will be a long-term effort.
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