DTI logo from its Facebook page
MANILA, Philippines — The country is set to miss out on big benefits if the Regional Comprehensive Economic Partnership (RCEP) is ignored due to unfounded fears on trade liberalization, a Department of Trade and Industry (DTI) official said on Monday.
Assistant Trade Secretary Allan Gepty in his presentation before the Senate committee on foreign relations claimed that they can address some of the concerns raised by the agriculture sector — the only sector supposedly against RCEP — like the issue of too much trade liberalization.
Gepty explained that the country has already adopted several other free trade agreements (FTA) with other countries that have opened up importation — making claims about RCEP speeding up liberalization untrue.
“First sabi ni Sec. Mon (Lopez) kanina, the reality is open na ‘yong ating merkado. Marami na ho tayong free trade agreements both regionally and bilaterally. Sa Asean pa lang po, meron tayong Asean-Australia-New Zealand FTA (AANZFTA), noong 2010 may Asean-China (ACTFA) tayo, may Asean Japan (AJCEP), may Asean-Korea (AKFTA), now RCEP,” he said.
“Sa RCEP po, 98.1 percent ang trade liberalization, tama po mataas, but ang inopen po natin dito sa RCEP na marami ay industrial products, 1,397 tariff lines ang ibinigay or inimprove natin na offer sa industrial products, and it’s glad to know na wala tayong objection sa industrial sector,” he added.
(In RCEP, trade liberalization is 98.1 percent, yes that’s correct, it is high, but in RCEP we opened a lot in terms of industrial products, we have given or improved 1,397 tariff lines and offered industrial products, and it is glad to know that no objection in the industrial sector.)
With the RCEP, an FTA with Asean partners like China, Japan, South Korea, and Australia and New Zealand, lower tariffs on imports would be adopted by parties to the agreement, which many fear would open gates for more imported goods.
READ: Foreign chambers urge Senate to ratify RCEP
But Gepty presented a table showing that Asean’s deal with China (ACTFA) in 2005 has already prompted free trade to a degree of 84.8 percent, with a continuous increase after signing more deals like the one with Korea (AKFTA), which pushed trade liberalization to 87.7 percent in 2007.
The FTA with Japan (AJCEP) in 2008 drove trade liberalization to 92.4 percent, according to Gepty, while the agreement with New Zealand and Australia (AANZFTA) in 2010 pushed it to 94.7 percent.
The DTI official also stressed that if the Philippines ratifies the RCEP, only 33 agricultural tariff lines would be affected — or would have lower tariffs for importation from other countries.
Of these 33, Gepty said that only eight are final goods, and the total percentage of these tariff lines equate to 0.8 percent of imports.
Instead of actually gaining if RCEP is denied, Gepty said that the Philippines may lose some leverage if the FTA is not signed as it would lower exportation costs — thus helping producers and farmers in the country.
“This is the most important question: we want to maintain the 33 agri tariff lines protection but ano naman ang mawawala sa atin? What will we miss? Unang-una, ‘yong 511 na tariff lines na meron tayong preferential market access, sayang po ‘yon ‘di ba?” he asked.
“Tataas ang exports mo dito sa mga bansang ito, makikinabang ‘yong mga farmers, producers, at kung may competition ka sa other Asean member-states, kawawa ‘yong mga farmers at producers,” he added.
The RCEP is a hot issue after several stakeholders and traders have pushed for its ratification in the Senate. Recently, President-elect Ferdinand “Bongbong” Marcos said he has no qualms about joining RCEP, but he also expressed concerns as to whether the agriculture sector is strong enough to compete with other countries.
Marcos said that such a measure must be studied intently, saying that while he believes that the trading has a lot of good benefits, he does not want his administration to be too reliant on imports.
READ: Bongbong Marcos okay with PH joining RCEP if agri sector already competitive