THE Regional Comprehensive Economic Partnership (RCEP) will take effect on June 2, 2023, Trade Secretary Alfredo E. Pascual said.
“The RCEP agreement will enter into force for the Philippines, 60 days from the said deposit of the instrument of ratification and that date of effectivity will be the 2nd of June 2023,” Pascual said at a briefing held at the Malacañang on Thursday.
The Trade chief said the issuance of the executive order (EO) that they presented to the National Economic and Development Authority (NEDA) Board Meeting on Thursday will “operationalize” the implementation of the Philippine tariff commitments under the RCEP agreement. Pascual said the EO is proposed to be effective on June 2,2023 to “coincide” with the end of the 60-day period after the deposit of the instrument of ratification of the mega trade deal.
Once issued, the EO shall be the basis of the Bureau of Customs (BOC) for the issuance of Customs administrative order which shall be distributed to all ports to allow for the implementation of the preferential tariffs on e-ports from RCEP member countries, the Trade chief said.
According to Pascual, the issuance of the EO to implement the Philippines’s schedule of tariff commitments is pursuant to a provision in Republic Act that created the Customs Modernization and Tariff Act (CMTA).
“This section provides the President shall upon recommendation of the NEDA Board modify, import duties including any necessary change in classification and other import restrictions as required appropriate to carry out and promote foreign trade with other countries,” Pascual said.
Pascual said the Joint Cabinet Committee had earlier endorsed this draft EO subject to Senate concurrence and the EO presented for endorsement to the NEDA Board will implement Annexes A to F—which he said is the “meat” of the EO, Annexes A to F of the Philippine schedule of tariff commitments under RCEP agreement.
“Essentially the EO will maintain current preferential tariffs on about 98.1 percent of the 1,718 agricultural tariff lines and 82.7 percent of the 8,102 industrial tariff lines,” Pascual added.
Of the 1,685 agricultural tariff lines retained at current rates, 1,426 tariff lines are maintained at zero while 154 tariff lines will remain in their respective most favored MFN rates or Most Favored Nation rates and excluded from any tariff concession, Pascual said.
Meanwhile, he noted that agricultural tariffs on 105 lines which are in the sensitive and highly sensitive list shall generally be lower than MFN rates in the 20th year of RCEP but still higher or on a par with the ASEAN +1 rates.
“So in other words, there is really not going below the ASEAN +1 rates to which the Philippines is already committed,” Pascual said.
But, for the remaining 33 lines which Pascual deemed “important,” he said the EO will reduce tariff rates upon entry into force or implement gradual reduction over a period of 15 to 20 years.
These tariff lines, Pascual said, will involve agricultural products which are “not really being produced very much in the Philippines.”
Moving forward, the Trade chief assured businesses and industry groups, among others, that the Department of Trade and Industry (DTI) will to a “more detailed” educational campaign with industry organizations, with sectoral groups, to be able to explain the benefits that each of these industries can gain from the mega trade deal.
“And after that educational campaign and maybe towards the tail end of the educational campaign, we’ll start establishing assistance centers for businesses for possible assistance that we might be able to give to further help them implement the RCEP provisions that will favorably affect their industry,” Pascual said.
Meanwhile, Pascual said the Trade department will launch the Export Development Plan on June 9. He said the launch of the Plan in June “will be an international trade forum” on the benefits that businesses and the country as a whole can gain from RCEP.