The Senate should ratify the Regional Comprehensive Economic Partnership (RCEP) to enable the country to attract more foreign investments, according to the Management Association of the Philippines (MAP).
“We have already lost 10 months of ability to compete on equal footing with our Asean and Asian partners already in RCEP in attracting foreign investments as they capitalize on the shift by a number of [multinational companies] MNCs to seek alternative locations for their manufacturing sites,” MAP said in a statement on Tuesday.
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 GDP.
Citing the Department of Trade and Industry (DTI), MAP said the regional trade pact has a market of 2.3 billion people. Moreover, it covers 50 percent of the global manufacturing output, 50 percent of the global automotive products, and 70 percent of electronics products.
The business group also noted that RCEP member-economies account for 51 percent of the Philippines’s export market and 68 percent of the country’s imports.
MAP also likened RCEP to the European Union, which it said is a “powerful economic bloc that will benefit enormously from the interchange of business among them, and with the world at large.”
The business group underscored the importance of the Philippines’s accession to the said regional trade deal, noting that it is “part of what promises to be the most important economic grouping in the world.”
“It is time that we get on board and proactively exploit the wealth of opportunities it offers the Filipinos in terms of expanded jobs, increased incomes, and better lives. We strongly urge our honorable Senators to ratify RCEP now,” MAP said.
As to the fears expressed by “some agricultural sector critics”, the business group said these are “unfounded and illusory” as government negotiators in the regional trade deal have repeatedly explained that sensitive agricultural products remain protected under the Philippines’s commitments to the agreement.
“These products include rice, swine meat, poultry meat, potatoes, onions, garlic, cabbages, sugar, and carrots. All will retain the restrictions they currently enjoy. Indeed, both the DTI and the Department of Agriculture (DA) have explained that membership in the agreement opens up further export opportunities for our agricultural products, without exposing ourselves to an imagined flood of farm imports feared by opponents,” MAP said.
Prior to being sworn in as president, President Ferdinand R. Marcos Jr. said he wants to ensure the regional trade agreement will not be detrimental to local industries, particularly agriculture.
“I do not know if our agricultural sector is sufficiently robust to take on the competition that the opening of the markets will cause RCEP. So let us have a look at it again,” Marcos said in a televised interview in May.
However, Trade Secretary Alfredo E. Pascual recently said in a radio interview that the president is committed to having RCEP ratified.
Last Wednesday, Senate leaders said during plenary discussions that they will give priority to tackling the trade deal as soon as it is formally endorsed to them by the Executive, with Senate President Juan Miguel Zubiri noting that the Philippines is the only one in the region that has not acceded to it.
Further, MAP said “the delay in ratification deprives the country’s producers of various exportable products of easier access to the markets of the RCEP countries due to the improved provisions on market access and easier rules of origin.”
The business group also mentioned that the threat of likely diversion by their buyers of their business to other members already in RCEP is “very real.”
Former President Rodrigo R. Duterte in September 2021 signed the ratification of RCEP, but it still needed concurrence from the Senate before it could become fully effective.
However, the 18th Congress adjourned in June without the regional trade deal being ratified.