THE Regional Comprehensive Economic Partnership (RCEP) is not just a “simple” trade agreement, Trade Secretary Alfredo E. Pascual told senators on Tuesday, noting that as an ASEAN-led free trade agreement, it will ensure the region’s “continued economic advantage” and will help maintain a “balance of power” within the region.
“It must be reiterated that RCEP is an ASEAN-led [free trade agreement] FTA, and we are part of Asean. It is aimed at maintaining ASEAN’s centrality within the broader region,” the Trade chief said in his opening statement during the Senate hearing on RCEP.
“It is not just a simple trade agreement, that’s already been highlighted, which provides enhanced market access and a stable regulatory framework. It is a strategic tool in ensuring the region’s continued economic advantage, and will help maintain a balance of power within the region,” Pascual stressed.
Amid the “rise of protectionism” and ongoing geopolitical crisis, the Trade chief said the signing and entry-into-force of RCEP reflects the Asean region’s “unwavering commitment” to a rules-based trading system that maintains an open, stable, free, and fair-trading environment.
RCEP is also expected to further promote economic efficiency of member states, strengthening linkages in sectors such as manufacturing, technology, agriculture, and natural resources, as well as reinforcing the participation of micro, small, and medium enterprises (MSMEs) in the global value chain networks, according to Pascual.
RCEP is a free trade agreement among Asean countries and their trading partners Australia, China, Japan, New Zealand and South Korea. Touted as the world’s largest trade pact, RCEP represents 30 percent of the global gross domestic product (GDP).
The Trade chief noted that the Philippines is the only remaining signatory state that has yet to participate in the regional trade deal. The country, he stressed, cannot afford not to join as exclusion will be “costly” and the country will miss a lot of opportunities.
“Our neighbors in South East Asia are already enjoying the advantages and benefits of the Agreement, and further delay can result in trade diversification and missed investment opportunities,” Pascual told senators.
Meanwhile, the Trade chief also brought up the downsides of not joining RCEP. He said, among others, that the country’s exports, including electronic and agricultural products, could become “less competitive” as intermediate goods used as inputs for further production and manufacturing become more expensive compared with the country’s competitors.
Pascual said other countries in the region enjoy preferential treatment arising from “enhanced” market access, wider sourcing of raw materials, among others.
Moreover, the Trade chief noted, while RCEP is not a “magic bullet” that will solve the country’s problems in various sectors, it will provide an “enabling environment”. Hence, he added, the government and business will still need to do their part to make local industries more productive and more competitive.
Last week, agriculture stakeholders expressed anew their objection to RCEP, saying there is no guarantee the trade pact would benefit the Philippines since other RCEP member-countries are more competitive.
These stakeholders expressed their concern that “things could worsen, unless we act resolutely and fix the ills plaguing agriculture.”
While Pascual recognized the concerns raised by some sectors including the agriculture sector, he said “it is important to understand the bigger picture and view RCEP in terms of the opportunities it can bring us, overall.”
“In any case, the government will continue to provide the needed support and level the playing field to equip and sharpen the capacity of our businesses, including those in agriculture,” the Trade chief added.
RCEP was recently endorsed by President Ferdinand R. Marcos, Jr. and is expected to be concurred in by the Senate within the first quarter of this year.
At the resumption of the Committee on Foreign Relations’ deliberations on whether or not the Senate should concur in the ratification of RCEP, Senate President Juan Miguel Zubiri called for openness in discussing the proposed concurrence.
‘Transparent scrutiny’
Senate President Pro Tempore Loren Legarda presided over the continuation of the Committee on Foreign Relations’ deliberations on RCEP. Acknowledging difficulties in its ratification in previous Congresses, Legarda said she called for the hearing to listen to the concerns of sectors opposed to the trade deal, particularly the agriculture industry. She gave assurances of a “most transparent” scrutiny of the RCEP, prodding government agencies to ensure that measures protecting the interest of the country and the people would be in place.
Zubiri said stakeholders should look at how the trade agreement would benefit the country in its entirety. He acknowledged the “significant role” of the RCEP in liberalizing supply chain, thus, lowering the cost of goods and services in the country. “We have to also open our eyes to all the other industries,” Zubiri appealed. “We have to look at the totality of how many people it can help in the future…. We have to look at the overall picture on how this will help our country grow into tiger status,” he added.