Philippines fast-tracking RCEP ratification

by Louella Desiderio – The Philippine Star, 24 Sep 2021

MANILA, Philippines — The Philippines is doubling efforts to finish the ratification process within the year for the Regional Comprehensive Economic Partnership (RCEP) agreement, which is seen to provide benefits in terms of greater market access and higher economic growth for the country.

“We consider RCEP to be a top priority and we are doubling our efforts toward completing the ratification process within the year,” Trade Secretary Ramon Lopez said during a recent forum on the trade agreement.

As President Duterte ratified the document for RCEP last Sept.2, he said this would then be taken up soon at the Senate for concurrence.

After the Senate’s concurrence, the Philippines will then deposit the instrument of ratification to the Association of Southeast Asian Nations (ASEAN) secretary-general to mark the completion of the process.

Considered the biggest trade agreement in the world, the RCEP was signed by ASEAN members – Philippines, Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam, and their trade partners Australia, China, Japan, South Korea and New Zealand in November last year.

RCEP accounts for 30 percent of the world’s population, 28 percent of the global gross domestic product (GDP), and 28 percent of the world’s total trade.

ASEAN and its trade partners aim to implement the RCEP by Jan.1 next year.

For the RCEP to take effect, it has to be ratified by at least six ASEAN countries and three non-ASEAN members.

“Among the expected benefits of RCEP is an improved market access on goods, services, and investment,” Lopez said.

He said RCEP economies represented 51 percent of Philippine exports, 68 percent of Philippine imports, and 58 percent of the country’s investments last year.

He added “if the Philippines were not part of this FTA (free trade agreement), trade and investments would have been diverted away from our country to the detriment of our local businesses, particularly MSMEs (micro, small and medium enterprises).”

Caesar Cororaton, senior research fellow at the Global Issues Initiative of the Virginia Polytechnic Institute and State University, said trade liberalization within the RCEP would generate trade creation and benefit the Philippines.

Through the RCEP, he said the Philippines could see higher GDP growth, lower commodity prices, see improvement in factor prices, as well as positive net exports.

For the country to benefit from RCEP, Foreign Buyers Association of the Philippines president Robert Young said there is a need for the government to implement measures for a massive level up in the country’s production.

“Government must have industrial policy intervention and subsidies in labor and power, finance. Otherwise, the Philippines will be just an importing country. So, unemployment will rise and [there will be] critical trade imbalance,” he said.