THE novel coronavirus 2019 attacked a wide swathe of the globe, killing people by the thousands, and shutting down homes, businesses, schools, churches and other institutions, just to contain the virus. Economies of various nations throughout the world contracted as a result.
One important lesson learned in this COVID-19 pandemic is that solutions to an all-encompassing problem should be wholistic and inclusive.
To recover, these economies have to help one another, bind themselves into a trading bloc for the mutual benefits of its members. Thus was born the Regional Comprehensive Economic Partnership (RCEP), at the height of the pandemic, with all 15 member-nations finalizing the accord after eight long years and at least 31 high-level meetings punctuated by discussions, debates and haggling.
‘This is the major push the Philippine economy needs to jump-start its recovery.’
Taken as a whole, the 15 countries now compose the world’s largest trading bloc: all the 10 member-states of the Association of Southeast Asian Nations (Asean), China, Japan, South Korea, Australia, and New Zealand. India, the other huge country in this geographical region, may still join later.
These economies will stand to benefit from removal of trade and investment barriers, enhancing trade of finished goods, reshaping the supply chain, and bolstering more integrated production in the region. Although RCEP is initially an Asean initiative, China stands to be the biggest winner in this new grouping because the bloc excludes its arch-rival, the United States. The huge trading bloc will stifle any attempt by the US and the European Union to undercut China’s rise as a world economic power, and its influence in this part of the globe.
For the Philippines, while the novel trade accord opens 98.1 percent of the country’s tariff lines to cheap imports, we were able to exempt most of the farm produce, including rice, and some industrial products such as cement and auto parts from RCEP.
The Department of Trade and Industry has assured local producers, especially those in the agriculture sector, of continued protection even as the government liberalized mostly intermediate and capital goods. Farmers are assured that RCEP will not countermand the Rice Tariffication Law which opens up rice importation by lifting quantitative restrictions. Also, local farmers will have the rare opportunity to improve their productivity through cheaper imported farm implements and inputs.
RCEP, considered the largest free trade accord as it covers 30 percent of the world’s population and GDP, and 28 percent of global trade, is envisioned to ramp up the Philippines’ exports to the other 14 countries by 10 percent, with the bulk of exports going to China.
This is the major push the Philippine economy needs to jump-start its recovery.