By Danilo P. Padua, PhD
I asked some friends, including two from the academe, about what they can say about RCEP a day before the Philippine Senate ratified it on Feb 21, 2023. They are even unfamiliar that the acronym RCEP refers to: Regional Comprehensive Economic Partnership, a free trade agreement.
All of them admitted having very little knowledge about it, although this had been in the local news for about eight years or so. One even asked me, “Is that RCEP related to rice?” To me, that indicates that any agreement that our officials would like to foist on unsuspecting Filipinos must be studied very well. Otherwise, many could become victims of consequences that they are clueless about.
Many in the agriculture sector are aware about it. Proof is that people in the sector are concerned that ratification of RCEP may render local agriculture prostrate for quite a while. Am not sure though if enough public consultation or discussions were done to get the people’s sentiment about the agreement. But that is already water under the bridge.
The Senate had spoken and President BBM had already loudly proclaimed to the world that we have embraced RCEP, acknowledged as the largest free trade bloc in the world. RCEP covers 30% of the world’s population and economy.
As a requisite, the instrument of ratification by the country was already submitted to the
ASEAN Secretariat based in Jakarta, Indonesia.
The agreement is ASEAN-centered, as the group first proposed it way back in 2011. The following year, the guiding principles and objectives in negotiating the RCEP was approved during the 21st ASEAN Summit meeting, together with 6 partners (Australia, China, India, Japan, Korea and New Zealand). RCEP negotiations are meant to achieve a modern, comprehensive, high-quality, and mutually beneficial economic partnership agreement among ASEAN + FTA partners.
The RCEP negotiations include: trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement, e-commerce, SMEs and other issues
The Philippines was the last to ratify the agreement. The 10-member countries of ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) and partners Australia, China, Japan, South Korea, New Zealand now compose the RCEP. India decided not to join some years back while the membership of Myanmar is actually being questioned by some members due to its recent human rights violations.
After 2 years, other countries may join the bloc. This early, Bangladesh and Hong Kong have already applied for inclusion.
It is claimed that RCEP will progressively eliminate tariff and non-tariff barriers on substantially all trade in goods to establish a free trade area among the parties. It will be consistent with the World Trade Organization, of which the Philippines is a member
RCEP will eliminate up to 90 % of tariffs in goods trade. This is the area where we are most concerned about. The elimination of tariffs in goods could possibly deluge us with better quality products, maybe with even cheaper price, from the members.
The agriculture sector is really worried about this. The question is: are we ready to compete with our neighbors with respect to agriculture? We should take the bull by the horn. We should take the situation as a great challenge. I agree with senator Zubiri that we should fix our agriculture sector so we could compete. If that could be properly done, then our membership to RCEP could be “bold and game-changing” as NEDA Sec. Arsenio Balisacan averred.
Concerned senators should stop the habit of berating and embarrassing agriculture officials during hearings that are beamed on television nationwide. They should instead offer constructive criticisms, and offer concrete assistance that could help them vastly improve their delivery of services. In the process, the officials will realize how they are failing miserably and feel embarrassed at the same time since people “outside” of the sector have even better ideas than them.
Men of proven effective track record who are sincere, not graft-prone and bold enough to implement policies that will grow the sector should man the mantle of leadership at the department of agriculture.
The Philippine government made sure that its commitment to RCEP exclude free flow to the country and therefore protect local production of the following: pork, poultry meat, potatoes, onions, garlic, cabbages, sugar, carrots, and rice. Maybe others could still be included in the list as negotiations can continue. Cordillera farmers, especially from Benguet and Mt. Province, could therefore heave a little sigh of relief for that.
RCEP agreement took effect Jan 1, 2022. For us, it could cushion negative impact of a possible US-China trade war.
The following are among the purported benefits that the country could gain from joining the RCEP: zero or lower import tariffs for Philippine products that will enter the shores of its free trade partners; wider sourcing of raw materials for Philippine manufacturers; stable and predictable business environment, integrating MSMEs into the global value chain; allowing Filipino professionals to practice their profession in RCEP areas; stronger protection for intellectual property rights; and access to economic and technical cooperation support to boost the country’s competitiveness
We just hope that the plan of the Senate to create an oversight committee to take care of RCEP matters will be clothed with enough power to do things in the right direction and shielded from the ravenous manipulations of powers that be.**
