THE PHILIPPINE Chamber of Commerce and Industry (PCCI) pressed the Senate to ratify the Regional Comprehensive Economic Partnership (RCEP), as it would provide “unparalleled opportunities for Philippine businesses and prime the country for further economic growth and development.”
In a statement on Sunday, the PCCI said that it sent a letter to Senate President Juan Miguel F. Zubiri asking for the RCEP’s ratification so that the business sector could maximize the opportunities offered by the free trade agreement (FTA).
“We cannot afford to miss out on the RCEP. Non-joining will disadvantage our exports in the world’s fastest-growing area. Furthermore, it is detrimental to our goal to bring in foreign investments as investors would rather look at an RCEP signatory country to obtain preferential treatments among the RCEP countries,” PCCI President George T. Barcelon said.
He said the government should make sure there are enough safeguards to address the concerns of the agriculture sector.
“Countries which have ratified the RCEP agreement are already seeing increases in their overall trade in just one year after its entry into force in early 2022,” Mr. Barcelon said.
The RCEP involves the 10 member countries of the Association of Southeast Asian Nations (ASEAN), Australia, China, Japan, New Zealand, and South Korea. It seeks to open trade by eliminating 90% of tariffs among the participating economies, while the other tariffs would be gradually reduced within a 20-year period.
The RCEP was ratified by then-President Rodrigo R. Duterte in September 2021, but the previous Senate did not give its concurrence due to concerns over the free trade deal’s impact on the agriculture sector.
President Ferdinand R. Marcos, Jr., who concurrently serves as the Agriculture secretary, earlier urged the Senate to ratify the RCEP.
“If we want to eradicate poverty, we have to be integrated economically in trade and investment but you cannot do that, unless you’re competitive, unless you are attractive enough to businesses,” Anthony A. Abad, Trade Advisory Services chief executive officer and Abad Alcantara and Associates senior partner, told BusinessWorld via call.
“And the ones making the decisions on doing trade or investment with a country within RCEP are in the business or the companies so it’s a business decision,” he added.
The Philippines may face dire consequences if it does not become part of the RCEP.
“You can be isolated within this market. We will be bypassed again for investment and trade because we don’t have this agreement in place and they will always prioritize every other country,” Mr. Abad said.
The RCEP entered into force for Australia, Brunei Darussalam, Cambodia, China, Japan, Laos, New Zealand, Singapore, Thailand and Vietnam on Jan. 1, 2022. South Korea, Malaysia and Indonesia have also ratified the RCEP.
The Senate is currently debating the country’s accession to the free trade agreement.
Senate Minority Leader Aquilino Martin “Koko” L. Pimentel III, who chaired the Senate Foreign Affairs Committee during the last Congress, told BusinessWorld in a Viber message that “the real benefit is if we take advantage of the access to their markets and start producing goods which they find desirable and would patronize.”
Retired Pampanga State Agricultural University professor Roy S. Kempis, in a Viber message to BusinessWorld, said the RCEP will help the country get rid of “inefficient producers in the agriculture, manufacturing and service sectors.”
The country’s accession to the RCEP, Mr. Kempis said, is “long overdue.”
“We want to access their market, not be the market for their goods,” Mr. Pimentel said. “But in getting that access, we have to reciprocate and allow access to our market.”
John Paolo R. Rivera, an economist at the Asian Institute of Management, told BusinessWorld in a Viber message that the RCEP can be seen as “a tool to compel local industries to upgrade and be competitive.”
“Protection of local industries is okay, but no amount of protection can stop competition and our local industries must be ready for world-class production,” he added. “RCEP is a mega FTA. Readiness is as important as protectionism.” — Revin Mikhael D. Ochave and Alyssa Nicole O. Tan
