Trade Secretary Alfredo Pascual called on the Senate to ratify the Regional Comprehensive Economic Partnership amid rising protectionism and ongoing geopolitical crisis.
“The signing and entry-into-force of RCEP reflects the ASEAN region’s unwavering commitment to a rules- based trading system that maintains an open, stable, free and fair-trading environment. RCEP is expected to further promote economic efficiency of member states, strengthening linkages in sectors such as manufacturing, technology, agriculture, and natural resources. As well as reinforcing MSME participation in the global value chain networks,” Pascual said in his opening remarks during the Senate hearing on the trade agreement.
He said the regional partnership would address the country’s need for stronger multilateral trade and more foreign direct investments.
RCEP is not only a policy tool for trade liberalization and market access, he said, as it provides a framework of rules and disciplines to ensure regulatory consistency, creating a conducive business environment that is key to ensuring the confidence of the business and spurring further economic growth.
“I’d like to emphasize that RCEP is not a magic bullet that will solve our problems in various sectors. It only provides an enabling environment; the government and business will still need to do their part to make our industries more productive and more competitive,” Pascual said.
He said the delays in the Philippine participation would result in the diversion of trade and investments towards other countries which are already within the regional bloc at the expense of Philippines industries and people.
The DTI said other countries in the region enjoy preferential treatment arising from enhanced market access, wider sourcing of raw materials and a strengthened and transparent trading system. It said the linkages of the Philippines to the global value chain might deteriorate as investors and businesses would look to other countries for better economic environment and opportunities.
“Our exports could become less competitive as intermediate goods used as inputs for further production and manufacturing become more expensive in comparison to our competitors. Those are the downsides of not joining RCEP,” Pascual said.
Trade assistant secretary Allan Gepty said the county’s exports stand to gain better if the Philippines becomes a member of RCEP. He said papaya exports would be more competitive, because the tariff would go down from the present 24 percent.
The Philippines exports most of its papaya to the US, Japan and China. The top three exporters of papaya are India with 159,120 metric tons, followed by Netherlands with 12,837 MT and Ethiopia with 12,376 MT.
“It is important to understand the bigger picture and view RCEP in terms of the opportunities it can bring us, overall. We are situated in a dynamic region of the world and we cannot afford to remain out of its further economic integration,” Pascual said.