Local business groups urge Senate to ratify PHL membership to RCEP

Local business organizations have urged the Senate anew to ratify the Philippine membership in the Regional Comprehensive Economic Partnership (RCEP), the largest economic bloc in the world’s history. (See also “Senate resumes debates on RCEP, sponsor Koko Pimentel hopes for ratification vote on last day“).

In a joint statement on Wednesday, the business organizations said, “Financial Executives Institute of the Philippines (FINEX), the Makati Business Club (MBC), and the Management Association of the Philippines (MAP) would like to reiterate our call for the Senate to ratify the Philippine membership in the Regional Comprehensive Economic Partnership (RCEP), the largest economic bloc in the world’s history.” 

In their earlier Joint Statement dated January 21, 2022, the business organizations emphasized that RCEP’s 15 member economies consisting of the ten ASEAN members plus Australia, New Zealand, China, Japan, and South Korea, together account for 30 percent of the world’s population and of global gross domestic product (GDP). As such, it is a huge market that Filipino producers would gain preferential access to via membership in RCEP. 

Like any free trade agreement, they pointed out, the regional trade deal provides wide economic opportunities for the Philippines, along with certain threats to uncompetitive industries, and individual producers and their workers. 

The local business organizations highlighted that the Philippines has the least number of free trade agreements it has entered into compared to that of other Asian countries like Indonesia, Malaysia, Thailand, and Vietnam. 

“And like in the other free trade agreements the country has joined (of which our country has the least, compared to Indonesia, Malaysia, Thailand, and Vietnam), the overall economic gains in terms of net job creation, economic growth, and price stabilization will well outweigh the costs,” the business organizations stressed. 

Moreover, the local business groups stressed that “Government has the responsibility to assist those adversely affected meaningfully and effectively, to allow them to achieve competitiveness or adjust to alternative products or livelihoods.” 

The business organizations also zeroed in on the MSMEs as they will potentially gain expanded market access under RCEP, especially with more liberal rules of origin on traded products to qualify for trade concessions.

Further, the business groups said, “it will also provide broader and cheaper alternative sources for inputs and reduce costs of doing business through improved trade facilitation, especially customs and trade clearance procedures.”

The business organizations noted that exclusion from the regional trade deal would be immensely costly to the Philippine economy and its people. 

In fact, these business groups pointed out that “we can anticipate a significant decline in our exports to RCEP countries, which now account for nearly two-thirds (64 percent) of our total exports, as trade with us will logically be diverted to fellow members.” 

Apart from that, they said, non-participation in the regional economic deal would make the Philippines even more unattractive to job-creating investments than we already are, as these would best locate in RCEP member countries to take advantage of free access to its vast market. 

Likewise, the Philippine membership could attract more foreign investments into the country from firms wishing to produce and sell to the large RCEP market. 

“RCEP skeptics should find comfort in the fact that little will immediately change in the country’s trade relations since RCEP only reaffirms existing trade concessions we already have with all RCEP members via the ASEAN Trade in Goods Agreement (ATIGA) among ASEAN members and the ASEAN-Plus Free Trade Agreements with the rest,” the local business groups said in a joint statement. 

Moreover, the business organizations noted that tariff elimination will take up to 20 years, giving sufficient time for the Philippines to shape up and achieve the competitiveness that will enable our producers to take full advantage of the vast market opportunities RCEP offers.

The local business groups explained further that negotiators had excluded from tariff liberalization sensitive farm products including swine and poultry meat, potatoes, onions, garlic, cabbages, sugar, carrots, and rice, along with manufactured products like cement and certain steel products. 

With this, the business organizations see the Philippine membership in the regional trade deal as an important challenge to our government to level up genuine and meaningful support for Filipino producers, especially in the agriculture sector, which is the backbone of the Philippine economy.

“We, therefore, urge the government to provide a substantial increase in the agriculture budget commensurate to that provided in our comparable ASEAN neighbors, as we urge our Senators to ratify the RCEP Agreement without delay,” the Philippine business organizations stressed. 

Image credits: BusinessMirror file photo

Source link