BY BUTCH FERNANDEZ | FEBRUARY 16, 2023
4 MINUTE READ
The Senate on Wednesday moved to fast-track ratification of the Regional Comprehensive Economic Partnership Agreement (RCEP), with the chamber’s two top leaders strongly endorsing it on the floor.
Senate President Juan Miguel Zubiri delivered an impassioned speech reminding his colleagues the Philippines is “the odd man out, the last man standing” in RCEP, being the only signatory country that has not ratified what is touted the world’s biggest free trade area. “Let’s ratify this not out of fear,” he said, but out of hope that it will deliver on its promises despite fears it will gut some local producer sectors.
Senate President Pro Tempore Loren Legarda, also vice chair of the Foreign Relations panel, endorsed to plenary the committee report on RCEP, recalling how ASEAN leaders affirmed the ASEAN Framework for RCEP in November 2011.
Then, leaders of the 10 ASEAN member states and their six ASEAN Free Trade Agreement partners (Japan, China, Australia, New Zealand, South Korea and India) officially launched RCEP negotiations November 2012 when the 21st ASEAN Summit and Related Summits were held in Phnom Penh, Cambodia.
In a span of eight years, serious RCEP negotiations were spearheaded by the Department of Trade and Industry, bearing the patronage of consulted sectors, Legarda noted.
The senator recalled “there was a total of 28 full rounds of RCEP negotiations, eight regular and 10)intersessional Ministerial Meetings that were convened over a period of eight years.”
On top of these, four RCEP Leaders’ Summits held, and at the 4th RCEP Summit on November 15, 2020, the RCEP Agreement was signed.
“Now, 12 years after launching the RCEP,” Legarda said, “we are still asking ourselves: Do we need it?”
The senator added: “RCEP’s rich historical antecedents and claims on its benefits, on the other hand, begs the question, Why not?”
Legarda said she would “be the first to argue, however, that the number of years spent in one’s study or negotiation of international instruments, such as the RCEP, does not define the quality of a treaty.”
What defines a good treaty for each participating country, she said, “are its principles and goals that are given life through informed and carefully weighed commitments, and vigorous capacity-building measures and safeguards to address the peculiar circumstances of each participating member economy, including their respective economic sectors that are struggling to deal with various forms of barriers that inhibit growth – barriers that hinder their participation in cross-border trade and global value chains.”
Saying she had “carefully weighed the risks of RCEP vis-à-vis the benefits that it will bring to our people,” she underscored the following:
■ Based on 2020 data, the RCEP free trade area accounts for 29 percent of the world’s trade, 29 percent of world’s GDP, 33 percent of global inward Foreign Direct Investments (FDI), 47 percent of global outward FDI, and 2.3 billion population (29 percent of the world’s population). Can we afford to dismiss the opportunities offered by this regional market?
The very sensitive agricultural products are excluded from the Philippines’s tariff commitments in RCEP. In fact, under RCEP, more agricultural tariff lines were excluded from tariff commitments compared to our commitments under the Asean Trade in Goods Agreement (ATIGA) and the ASEAN+1 FTAs. Under RCEP, the Philippines only offered 33 agricultural tariff lines covering 15 products for further liberalization, specifically for Australia, New Zealand, China, and South Korea—compared to the existing ASEAN +1 Free Trade Agreements. This is only equivalent to 1.9 percent of the total agricultural tariff lines.
The global and regional markets are already open, and trade has been liberalized. We already have bilateral trade agreements, and ASEAN Free Trade Agreements. Whether we concur with the ratification of RCEP or not, the world has already evolved into a global marketplace, with pockets of regional markets. RCEP is essentially a step towards ensuring that a rules-based, transparent, and conducive business environment is promoted to ensure sustainable and inclusive economic growth. Why would we not want to be a part of this?
RCEP offers better market access for key Philippine products such as preserved pineapples, coconut juice, papaya, durian in China, Korea, and Japan. It offers additional guaranteed market access for services in Australia, China, Japan, Korea, and New Zealand. Many of our production sectors need more markets and they are clamoring for it.
RCEP offers enhanced and stable rules to encourage investments and presents opportunities for our professionals and service providers in the RCEP region.
RCEP offers opportunities for economic and technical cooperation in order to boost our competitiveness and build our comparative advantage in sectors with the greatest strength.
Legarda stressed the senators are “not blind” to the concerns of the farmers, adding in Filipino that, “I hear your grievances as I sponsor the RCEP” and vowing to make sure the accord’s provisions will not gut their sector.
“We need to strengthen public-private cooperation through joint consultative and monitoring mechanisms. This will enhance accountability, promote mutual learning, encourage best practices, and harness trust,” she suggested.
Legarda pitched “transparency” in all transactions. “If we want to optimize the benefits of global and regional trading systems offered not just by RCEP, but by other multilateral and bilateral trading systems, we need to make transparency among the cornerstones of transactions in government and with our trading partners. Share information that will allow our sectors to grow and be informed of the vast opportunities in the domestic, regional, and global marketplace. Share data to improve production.”
Third, she suggested reforms in all relevant programs.
“Better MSME and agricultural sector access to finance, technical and infrastructure support, creating competitiveness in our sectors, harnessing the power of digital infrastructure and technologies, strengthening supply chain connectivity, promoting a productive and efficient workforce, accelerating green growth, building resilient businesses, just to name a few, should be addressed by our programs,” the senator said, adding: “We cannot be competitive based on promised assistance to our ailing sectors. We need concrete action to be delivered fast. Remember, the Philippine Congress appropriates resources to serve specific purposes. Make sure these are well-spent, and within the timeframe you committed to deliver them. Our state of competitiveness will define how much more opportunities we can turn into success stories in RCEP.”
Source: https://businessmirror.com.ph/2023/02/16/senate-leaders-send-strong-push-for-rcep/