President Marcos Jr. yesterday approved an executive order (EO) that would operationalize the country’s tariff commitments under the Regional Comprehensive Economic Partnership Agreement (RCEP) which would take effect on June 2.
The EO, however, has yet to be signed and made public.
Arsenio Balisacan, National Economic Development Authority (NEDA) chief and planning secretary, said the President, at the sectoral Cabinet meeting in Malacanang, has also tasked concerned government agencies to conduct a nationwide educational campaign on how the country can take full advantage of the free trade agreement which involves the 10 Association of Southeast Asian Nation (Asean) member-countries and their trading partners Australia, New Zealand, China, Japan, and South Korea.
Balisacan said the President wants to “make it very clear” to the public the country stands to benefit from the free trade agreement, allaying concerns it will be bad for the country’s local industries.
The President, however, said the country should strengthen its manufacturing and production to make it more competitive regionally.
Alfredo Pascual, secretary of the Department of Trade and Industry (DTI), said the RCEP will enter into force in the Philippines on June 2, or 60 days after the government deposited the instrument of ratification with the Asean Secretary General on April 3. The Senate concurred with the RCEP ratification in February.
Pascual said under the EO, the President would be authorized to modify import duties, including necessary changes in the classification and other import restrictions as required or appropriate to carry out and promote foreign trade, upon recommendation of the NEDA Board. The President chairs the NEDA board.
He said once the EO is issued, the Bureau of Customs will release a customs administrative order to be distributed to all ports for the operationalization of the preferential tariffs on imported products coming from RCEP member countries.
Pascual said the EO maintains the current preferential tariffs of 98.1 percent of the 1,718 agricultural tariff lines and 82.7 percent of the 8,102 industrial tariff lines.
He said that of the current 1,685 agricultural tariff lines, 1,426 are maintained at zero rates, while 154 would remain in their respective most favored nation (MFN) rates and excluded in any form of tariff concessions.
He said 105 agricultural tariff lines, which are in the sensitive and highly sensitive list, shall be generally lower than the MFN rates but still higher or at par with the Asean+1 rates by the 20th year of the RCEP.
“For the remaining 33 lines, these are the important 33 lines, the EO will reduce tariff rates upon entry into force or implement gradual reduction over a period of 15 to 20 years,” he said, adding that the agricultural products affected by the tariff lines are mostly being produced in the Philippines.
Information campaign
Pascual said the DTI and other departments of the government will make the public, particularly the businesses, aware of the benefits that they can gain from RCEP as well as the other existing preferential trade agreements.
Pascual said DTI will start with a major event on June 9 for the launch of the Export Development Plan 2023 to 2028. An international trade forum will be held to discuss the benefits that businesses and the country as a whole can gain from RCEP and other preferential trade agreements
“Our strategy for the next five to six years is to increase the exports and that’s tied up also with the investments that we are trying to bring in, particularly the export-oriented (ones),” Pascual said.
The DTI will also have a more detailed educational campaign with the industry organizations and sectoral groups to be able to explain the benefits that each of these industries can gain from RCEP.
The agency will then establish assistance centers for businesses to further help them implement the RCEP provisions that will favorably affect their industries.
Concessions
Pascual noted the concessions the Philippines was able to get from its trading partners.
China lowered tariffs for preserved pineapples, pineapple juice, coconut juice, printed paper, light signal, sound signaling, ignition wiring and flexographic plate.
He said
from Japan, tariff concessions were obtained on fish fillet, pineapple, coke, coffee, sunflower seeds, salmon, chocolate , fruit cocktail, fruit juices, leather gloves and footwear;
From Korea, concessions were given on dried and salted tilapia, cheddar cheese, papaya, durian, soya beans, canned tuna, preserved pineapple, alcoholic beverages, cement, fertilizers, polymer resins, plywood, women’s jacket, men’s shirts and bicycles.
Pascual is hopeful of the revival of the garments industry under RCEP because manufactures will be able to import the textile that they need to make the garments. Determination of rules of origin will no longer be limited to the local content coming from the Philippines but from all RCEP countries. Irma Isip
