SAYING the country cannot afford to be left behind much further, local and foreign business chambers have expressed support anew for Senate ratification of the Regional Comprehensive Economic Partnership (RCEP), which top Senate leaders endorsed in plenary last week.
Sergio Ortiz-Luis, president of the Employers Confederation of the Philippines or ECOP, said that “among our ASEAN neighbors, we are at the tail end.”
He said ratification by the Senate, which was reported to have set the voting on Tuesday, “will bring us competitive with others, at least to a certain degree. We can’t afford not to have trade agreements and, at the same time, to not be part of it,” he said.
“Everyone has joined already,” he added.
The Philippines is the only one among the 10 member-states of the Association of Southeast Asian Nations or ASEAN and its five free-trade agreement (FTA) partners, namely Australia, China, Japan, New Zealand and South Korea, which has not ratified the agreement.
Relatedly, the Philippine Chamber of Commerce and Industry (PCCI) called on the Senate anew to ratify the RCEP Agreement, which it said will play a “key role” in sustaining the Philippines’s “growth trajectory.”
In a letter to Senate President Juan Miguel Zubiri, PCCI President George T. Barcelon said, “RCEP will play a key role in sustaining the Philippines growth trajectory, provide unparalleled opportunities for Philippine businesses and prime the country for further economic growth and development.”
The PCCI head also cited the consequences of not participating in the regional trade deal, including putting the country’s exports at a disadvantage considering RCEP’s “growing area.”
“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,” Barcelon stressed.
However, he added, the country must also be able to provide safeguards so that concerns, especially of the agriculture sector, are properly addressed.
Besides the economic advantages, Barcelon highlighted that the Philippine business can “fully” enjoy the opportunities offered by the trade agreement.
The Senate Technical Working Group is currently holding meetings on RCEP amid strong opposition from stakeholders in the agriculture sector, who said they were not properly consulted by the government prior to the approval by former President Rodrigo Duterte. The PCCI chief, nonetheless, is hoping that the Senate will concur in the ratification of RCEP this 19th Congress.
Barcelon also noted that countries which have ratified the regional trade pact are already seeing increases in their “overall trade.”
Trade Secretary Alfredo E. Pascual, in his pitch at the Senate two weeks ago, said RCEP is not just a “simple” trade agreement, since as an ASEAN-led free trade agreement (FTA), it will ensure the region’s “continued economic advantage” and will help maintain a “balance of power” within the region.
Among the economic advantages, the Trade chief said is the preferential treatment arising from “enhanced” market access, wider sourcing of raw materials, among others.
Pascual noted that while the regional trade deal is not a “magic bullet” that will solve the country’s problems in various sectors, it will provide an “enabling environment.”
Hence, the government and business sector must still do their part to make local industries more productive and more competitive, he added.
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).
Foreign chambers, too
The American Chamber of Commerce of the Philippines, Inc. (AmCham) issued a similar statement for ratification.
“The Philippines cannot afford to leave itself out of the bloc since being a member will harness economic benefits that will hasten economic recovery from the scars, higher debt and economic damages caused by the COVID-19 pandemic,” the AmCham said.
“The Chamber believes that the Philippines’s participation in RCEP will boost the country’s competitiveness and will reflect a strong, rules-based economy. This will encourage more foreign direct investments (FDIs) in the country which ultimately translates into more jobs for Filipinos,” the statement added.
“We strongly urge the Honorable members of the Philippine Senate to immediately ratify RCEP,” the chamber said, noting that the agreement is already in force in Australia, Brunei, Cambodia, China, Indonesia, Japan, Korea, Malaysia, New Zealand, Singapore, Thailand and Vietnam.
Widely, long debated on
For his part, Ortiz-Luis of ECOP said doubts about the country’s competitiveness to enter into a free trade deal are misplaced.
“We have lessons in the past, we enter into negotiations without involving the private sector. And by the time we are allowed to take part there are already promised safeguards, especially in the agriculture sector, that have disappeared, so there are bad lessons.
“Fortunately, in the case of RCEP, this is widely debated on and for a long time, so we are already familiar. And if there are vacuums, these have been filled up, there are safeguards already,” he said.
As to perceived fears about RCEP’s disadvantageous effects on the agricultural sector, the ECOP head said that these have been addressed repeatedly “so the risks are very minimal, if ever.” “We have waited long enough for this (ratification), and we are very late already. All the others have overtaken us,” Ortiz-Luis said.
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