The Philippines is losing out to its Asean neighbors in benefitting from the Regional Comprehensive Economic Partnership (RCEP), according to Trade Secretary Ramon Lopez.
In a statement, Lopez summed up discussions of the International Trade Forum: The Importance of Philippine Participation in the RCEP Agreement” hosted by the Department of Trade and Industry (DTI) recently where he emphasized the cost of non-participation in the RCEP Agreement.
Lopez reported Singapore’s Trade Minister recently announced local businesses are already exploring opportunities brought about by RCEP, through the additional preferential market access they gained from China and Japan for products such as mineral fuels, plastics, chemical products, food preparations and beverages, among others.
“We cannot afford to delay or not participate in this FTA (free trade agreement) deal when (the Philippines’) Asean neighbors are reaping the advantages of the agreement with partners. And they are already benefitting from it. Delayed participation in RCEP may send concerns to the business sector of the openness of the Philippine economy, and may divert to other economies the trade, investment, and other economic opportunities that the RCEP may bring,”Lopez said.
DTI Undersecretary Ceferino Rodolfo cited an article by the Japan External Trade Organization (JETRO) dated March 29, 2022 regarding Thailand’s RCEP utilization leading to about 4 billion yen or about P1.7 billion of exports in two months after the entry into force of the Agreement.
Rodolfo said according to the article, RCEP is being used more and more in Thailand’s exports to Japan and to China given the enhanced market access and liberal rules of origin under RCEP.
“The stakeholders of Thailand that are benefiting from the RCEP are competing with Filipino exporters in the Japanese and Chinese market,” Rodolfo said.
The forum was organized to continue the dialogue between experts from the government, academe, and the legislative to discuss the economic benefits of RCEP and discuss the concerns raised by certain stakeholders, particularly the agricultural sector. It was attended by Senator Cynthia Villar as well as over 60 legislative staff of the Philippine Senate. Members of the Philippine trade negotiating team were also present.
For the opening remarks, DTI Secretary Ramon Lopez istant Secretary and the Philippines’ RCEP chief negotiator, Atty. Allan Gepty also emphasized that the Philippines cannot afford to isolate itself from this regional FTA as it would be inconsistent with the country’s trade policy direction as the Philippines just introduced various economic reforms to open and liberalize our markets, and to put more stability in our investments, such as amendments in Foreign Investments Act, Public Service Act, and Retail Liberalization Act among others.
For his presentation, Assistant Secretary Noel A. Padre of the Department of Agriculture (DA) discussed the potential benefits of RCEP for the agriculture sector through the improved tariff concessions the Philippines secured from China, Japan, and Korea for some agri-fishery products, such as canned pineapple, papaya, and chocolate. Assistant Secretary Padre also explained that the local manufacturers and exporters of certain products such as canned tuna, will gain from the liberalized rules of origin for under RCEP.
Dr. Cielito Habito, Professor of Economics at the Ateneo de Manila University and Chairman of Brain Trust, Inc., provided insights as to why prompt RCEP ratification is important.
According to Dr. Habito, Philippine hesitancy in ratifying RCEP sends negative signals to the international community and reinforces our historical reputation for tentative policy setting.
This could only lead more foreign investors to bypass the Philippines on trade and investment, as it is easy for them to opt to move to our more decisive neighbors. Dr. Habito further added that the delay in ratification based on illusory threats is potentially costly to industries.
In closing, The RCEP Agreement entered into force on 01 January 2022 for Darussalam, Cambodia, Lao PDR, Singapore, Thailand, Viet Nam, Australia, China, Japan, and New Zealand; 01 February 2022 for Korea; and 18 March 2022 for Malaysia.
The RCEP Agreement was ratified by President Rodrigo Roa Duterte on 02 September 2021 and is under Senate consideration to for their concurrence.
