A prolonged delay in securing the concurrence of the Senate of the ratification by the Philippines of the Regional Comprehensive Economic Partnership (RCEP) would lead to tremendous opportunity losses for the country, according to Trade Secretary Ramon Lopez.
Lopez said at the Laging Handa public briefing he remains hopeful the Senate would be able to ratify RCEP within the first two weeks of the year.
RCEP entered into force on January 1 for six Asean member-states Brunei Darussalam, Cambodia, Lao PDR, Singapore, Thailand and Vietnam, and the five Asean trading partners Australia, China, Japan, Korea, and New Zealand.
Lopez said there was no big reason for the failure by the Senate to ratify the deal in time for the scheduled effectivity.
“It was just lack of time because in the last sessions in December, the Senate had to tackle and finish the budget and the economic reform bills like the Retail Trade Act, the Public Services Act and the Foreign Investments Act,” Lopez said.
“If the Senate would be able to discuss RCEP this January, the impact of the delay would not be as big. But if the delay drags on, that would have a very big impact on us,” he added.
He said investors will go elsewhere while export access for trade partners would not be maximized if they do not benefit from lower tariff.
“This would lead to job losses,” Lopez said in noting the importance of ratifying RCEP as soon as possible.
Lopez also allayed fears of the agriculture sector of displacement by imports, saying key farm goods are in the exclusion list.
“What is important is for the agriculture sector to get support with or without RCEP,” he said.
Lopez in hearings at the Senate cited how RCEP can fuel the country’s economic development, especially amidst the context of the COVID-19 pandemic.
He said staying out or delaying the participation of the Philippines in the agreement sends a signal to the international community, including potential investors, that the Philippines is not inclined in promoting greater openness, create a more business-friendly environment, encourage closer integration of economies, and provide a more stable and predictable rules based system of trade. “This may impact the country’s ability to attract foreign direct investments, especially when compared with our Asean neighbors that are already part of the RCEP. This may also affect other international trade engagements we are pursuing,” Lopez had said.
“Not joining RCEP or delaying our participation will cause disruption in this momentum.
Investments will shy away from the countries who are not participating, and there will be capital flight and lost investment opportunities,” Lopez said.
