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Freeman Cebu Business

Philippines must join RCEP: World’s largest free trade zone

INTEGRITY BEAT - Henry Schumacher - The Freeman

CEBU, Philippines — At the beginning of January 2023, a colossus of the world economy celebrates its birthday. A year ago, the world's largest free trade zone, the Regional Comprehensive Economic Partnership (RCEP), came into force in the Asia-Pacific region.

While the countries involved, such as Singapore, China, Japan, South Korea, Australia and New Zealand, hoped that this would result in economic growth and greater weight in the world, Europe feared being seen as a loser.

But a year after the start, it is clear that not everything is going as planned at the RCEP. The necessary forms are missing in order to be able to use the provisions of the free trade zone. In some customs offices, officials still don't know how the new regulations actually work, our correspondents from Southeast Asia and Japan report. The confusion also arises from the fact that many of the countries are already part of other bilateral and multilateral agreements.

Regional Comprehensive Economic Partnership (RCEP) Gross Domestic Product 2022 in Billion US Dollars

China     18.321

Japan     4.301

South Korea       1.734

Australia              1.725

Indonesia            1.289

Thailand               535

Malaysia                            434

Singapore                         424

Vietnam                            414

Philippines                        402

New Zealand                    243

Myanmar                                         60

Cambodia                         28

Brunei                               18

Laos                                  16

Total                          29.943 = 29% of World GDP

However, it would be important for China in particular, by far the largest member of the free trade area, to implement the agreement quickly. This is also due to the growing conflict with the USA. As a result, Beijing has to look around for other export markets and tie its partners in Asia more closely to itself. Hong Kong SAR is also currently preparing to join the RCEP. Because even if China is an unpleasant neighbor politically, the economic giant is always economically important for the region.

Where is the Philippines in this important process?

The PHILIPPINE approval of a key regional trade deal could come before the government puts in place the needed groundwork to prepare domestic industries for heightened competition, with agriculture still holding out for safeguards and protections, analysts said.

The current situation highlights the long-running neglect of the agricultural sector, but there is no doubt that the RCEP will provide the Philippines with the impetus, force the Philippines to reform, and plug the Philippines into the digital world and the legal world.

The RCEP started taking effect in the various jurisdictions on Jan. 1. Participants include the 10 members of the Association of Southeast Asian Nations, Australia, China, Japan, South Korea, and New Zealand.

The Philippines and Myanmar are the only remaining countries that have yet to formalize their participation in RCEP.

Senator Imee Marcos has established a technical working group to complete a committee report on RCEP ratification. The committee expects to report it out to plenary once sessions resume on Jan. 23.

It is certainly hoped that the Philippines will very soon join RCEP; feedback is appreciated; please contact me at [email protected]

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