MANILA - The Department of Trade and Industry and several stakeholders again called for the ratification of the Regional Economic Cooperation Partnership (RCEP) saying the free trade deal will help the Philippine economy.
RCEP includes Australia, China, Japan, South Korea, New Zealand, and the 10-member ASEAN. It seeks to eliminate up to 90 percent of tariffs between signatories within 10 years of taking effect.
The Philippines has yet to ratify its participation in RCEP after Filipino lawmakers deferred their decision on the matter. With elections coming up in May, a new set of lawmakers will have to be briefed on RCEP.
Trade Assistant Secretary Allan Gepty said the Philippines needs to take part in the RCEP to boost trade and investment.
“The RCEP region represents 50 percent of the global manufacturing output, 50 percent of global automotive output, 70 percent of electronic products, 26 percent of GVC (global value chain) trade volume, 35 percent contribution to global export of electronics and machineries, 60 percent of GVC for electrical, machinery, petroleum, chemicals, textile, apparel, metal and transport equipment, and most interestingly, the main GVC hubs of Japan, China, and Korea,” Gepty said.
In terms of foreign direct investments, more than 60 percent of the Philippines’ FDIs come from RCEP countries, Gepty added. He noted that the Philippines has moved up in ranking in Southeast Asia as a destination for FDIs and that membership in RCEP will sustain this.
“And again that tells us that we cannot afford not to be part of this RCEP region, because the bulk of our FDIs are coming from these trading partners."
Henry Lim Bon Liong, President of the Federation of Filipino Chinese Chambers of Commerce and Industry Inc, said the ratification of RCEP would help the the country hit its 7.5 percent growth target this year. .
“This is what businessmen are longing for," Liong said.
Theresa Chong Cariño, Senior Research Consultant at the Amity Foundation tackled the claim that RCEP would only benefit China. She said that in 2020 Chinese imports from RCEP members reached $778 billion exceeding the country's exports to them of $700 billion.
“So, I mean the complaint before has always been a trade imbalance. I think that is beginning to change,” Cariño said.
She added that nearly a fourth of China’s total imports during 2020 came from RCEP members, and in the first 11 months of 2021, China’s trade with RCEP members represented 31 percent of its total foreign trade value in the same period.
“So that is how important ASEAN has become for China," Cariño said.
Several groups however have opposed the ratification of the RCEP saying the free trade deal will have a negative impact on the Philippine economy, especially the agricultural sector.
Some groups are concerned that RCEP will have a negative impact on the Philippine economy, especially the agricultural sector. Former Agriculture Secretary Leonardo Montemayor has said that RCEP will allow more agricultural products from other countries to easily enter the country and compete with local products as tariffs are removed.
In 2019, India opted not to join RCEP fearing its domestic producers could be hard hit if the country was flooded with cheap Chinese goods. India, Asia’s third-largest economy, flagged textiles, dairy, and agriculture as vulnerable industries.
Cariño meanwhile said that RCEP will members would be enjoined to maintain peace within the region to ensure the success of the free trade pact.
“What’s important is that with RCEP, ASEAN as a whole will uphold rules-based architecture and work for cooperation, peace, stability, and prosperity. You know no matter what kind of FTAs will be implemented, the environment of peace and stability is essential to their success," Cariño said.
China, which is the main backer of RCEP, has territorial disputes with Japan and several members of ASEAN including the Philippines.
- Report from Warren de Guzman, ABS-CBN News