Delay in RCEP ratification leads to missed opportunities

MANILA, Philippines — The Department of Trade and Industry (DTI) emphasized the need to ratify the Regional Comprehensive Economic Partnership (RCEP) agreement, saying further delay will lead to missed opportunities as most signatory countries are now enjoying the benefits of the trade deal.

In a statement yesterday, Trade Secretary Alfredo Pascual highlighted the crucial importance of the Philippines’ participation in the RCEP, which was signed by members of the Association of Southeast Asian Nations (ASEAN), including the Philippines, and their trade partners China, Japan, South Korea, Australia and New Zealand in November 2020.

“The Philippines is the remaining signatory state that has yet to participate in this important trade deal, and this time the Philippines cannot afford not to join. It will be costly, we will miss a lot of opportunities. Our neighbors in Southeast Asia are already enjoying the advantages and benefits of the agreement, and further delay can result in trade diversification and missed investment opportunities,” he said.

Pascual  also said the country’s participation in RCEP is important as the country seeks to be the ideal investment destination in the East and Southeast Asian region.

By participating in the RCEP, he said investors are assured that the country would remain an open market for trade and investment and would have policies that are geared toward providing a more investment-friendly environment.

“True, our country has already implemented game-changing economic reforms. RCEP will complement these reforms and strengthen the country’s enabling environment for business. This regional pact will open a wide range of market opportunities for investors, particularly in export-oriented enterprises, in this era where the center of economic activities is in the region,” he said.

Like any other trade agreement, he said the RCEP should be viewed not only in the context of market access, but also in terms of stability of trade and investment rules.

“The Philippines has only a few FTAs (free trade agreements) compared with other competing ASEAN countries. Suppose our country is seen to be reluctant to join this regional trade agreement spearheaded by ASEAN itself, such reluctance would pose many questions about the country’s trade policy direction,” he said.

RCEP is also seen to complement the country’s national policies and programs, including those covering agriculture, micro, small and medium enterprises, services, e-commerce, intellectual property, competition, and sustainable development.

“Our approach to trade and investment policies is holistic, and we cannot afford to just focus on certain sectors. Our goal is a vibrant, sustainable, and resilient economy not only for businesses and investors but for the general welfare,” Pascual said.

For his part, DTI assistant secretary Allan Gepty, who also serves as the Philippine RCEP chief trade negotiator, said concerns raised by farmers’ groups are well addressed in the agreement.

“In the course of negotiation, we made sure that concerns of stakeholders are well covered and appropriate flexibilities or policy space are provided in the agreement,” he said.

Should an increase in imports threaten the local industry, he said there are trade remedies available under the World Trade Organization (WTO) agreements.

In addition, he said RCEP provides a transitional safeguard allowing parties to address injury or even threat of injury to a domestic industry through suspension of further reduction of customs duties or increase in customs duties following a surge in imports.

There are also anti-dumping and countervailing measures that reaffirm parties’ rights obligations under relevant WTO agreements.

“As we move forward, our local industries, including the agricultural sector, should look at RCEP as a platform of more and bigger opportunities. These opportunities can range from improved market access in the RCEP region, wider cumulation area, cheaper access to raw materials, trade facilitative measures, innovation, and more investments, especially in smart agriculture and research and development,” Gepty said.

During the previous administration, the RCEP was ratified by former President Rodrigo Duterte, but failed to get Senate concurrence amid concerns raised on the deal’s impact on the agriculture sector.