MANILA - Philippine economic managers on Monday again called on senators to ratify the Regional Comprehensive Economic Partnership trade deal saying it will enhance the country’s market access as well as improve competitiveness.
Lawmakers have yet to ratify the country's participation in the free trade deal. While many business groups have called for its ratification, agriculture industry groups are also worried that it would result in a flood of cheap imports that would disadvantage local industry players.
The Department of Trade and Industry meanwhile said that without RCEP, the country is missing an opportunity to source raw materials from the largest free trade area for purposes of preferential access, as well as use simple trade rules such as flexible certification procedures.
"More than this, our competitors in ASEAN will have the advantage in market access and resultantly they will be more competitive,” DTI Assistant Secretary Allan Gepty said in a statement.
Gepty said that this means that other ASEAN countries will enjoy the benefit of convenience in doing business and trade in the RCEP region while Philippine companies will have to contend with the different ASEAN- plus-one free trade agreements.
"Certainly, this is not advantageous to the MSMEs," he added.
The economic benefits from joining RCEP also outweigh fears of negatively impacting the country's agriculture sector, he said
RCEP will liberalize 33 agricultural tariff lines, out of which 17 are raw materials, 8 are inputs and only 8 are final goods, the official said.
"This accounts to only 1.9 percent of total agricultural tariff lines and even less than 1 percent of the country’s total imports. This is very minimal compared to the huge benefits that the whole economy will gain which include the agriculture sector, industry, services and investments”, he added.
The DTI said sensitive agricultural products have been protected and that the negotiations also made sure that the trade remedies under the World Trade Organization (WTO) remain intact. It also has additional safety nets.
The DTI also pointed out that by not joining RCEP, trade diversion could occur wherein investments are diverted to RCEP countries.
Socioeconomic Planning Secretary Karl Chua meanwhile said opting out of RCEP means opting out of one of the fastest growing regions in the world.
“We will lose golden opportunity that this presents to us,” Chua told senators.
He said the Philippines stands to lose more by not joining RCEP.
“It’s like [the] Olympics. You want to win a gold medal? You do not wait until you are ready. You join so that you can see what other athletes are doing, how they are training so that you can compete. At the same time, we provide services to help this sector compete. But by not joining the olympics you’ll never know, and never grow up,” Chua said.
Canadian Chamber of Commerce of the Philippines President Julian Payne also said if the Philippines is left out of RCEP, Filipino businesses will be at a disadvantage every time they try to deal with RCEP member states, because they will have to pay higher tariffs by default.
“Obviously inefficient companies in any, either party, will suffer. Efficient ones will benefit. But generally free trade agreements benefit both parties. They reduce tariffs both ways, which means, Philippine goods will have easier access to the other country, just as the other country will,” Payne said.
President-elect Ferdinand Bongbong Marcos Jr earlier said RCEP needs deeper study but any move to join the free trade deal should ensure that the local farmers and the agriculture sector will be able to compete.
With reports from Robert Mano and Warren de Guzman, ABS-CBN News