The Philippines is not giving up hopes the United States will still reconsider reviving a regional free trade agreement following the signing on Sunday of the China-backed Regional Comprehensive Economic Partnership (RCEP).
In a television interview, Trade Secretary Ramon Lopez said the incoming administration of US President-elect Joe Biden “based on pronouncements is likely more open to regional trade ties like TPP (TransPacific Partnership).”
The TPP was abandoned by the US during the Obama administration which preferred bilateral trade agreements over regional trade blocs.
The US subsequently started discussions of a possible free trade agreement but this has not prospered.
Lopez in the same interview downplayed the possible dominance of China in RCEP and noted the deal is Asean-led.
He acknowdged though the “big change” or benefit for the countries which do not have bilateral preferential arrangements among themselves such as the other big countries Japan, Korea, New Zealand and Australia.
He said with the presence of these countries in RCEP, “definitely, we cannot afford to be absent.”
Lopez said with RCEP agreement, the 10-member states of Asean will have an “incremental increase in market access to Asean and its partners” and will broaden the “sourcing of raw materials” within the RCEP grouping which otherwise they do not have access as Asean members.
For example, a product exported by a local company exporting to Japan will be treated as having originated from the Philippines as long as raw materials are source from any RCEP country.
The deal, Lopez said, covers not just trade in goods and in investments, but also emerging areas in trade such as intellectual property, electronic commerce, government procurement, and competition.
Once implemented, the RCEP sgreement will improve export competitiveness of the Philippines’ key products of interests, such as agricultural products, automotive parts, and garments. It will also provide wider cumulation for certain products such as canned tuna and preserved fruits.
RCEP also provides a platform to encourage more investments and service providers in vital sectors such as manufacturing, creative sectors, financial services, research and development, IT-BPO, and energy, among others.