Contentious items in RCEP remain unresolved

Issues continue to prevent the China-led Regional Comprehensive Economic Partnership (RCEP) from moving forward, with major “contentious” subjects remaining unresolved, a trade official said.

Trade Undersecretary Ceferino Rodolfo said contentious issues on services, investment and trading of goods persist a few months before the Philippines’ end2017 target of reaching a “substantial conclusion” for the regional trade deal.

In terms of trading of goods, Rodolfo said there remains no unified decision among the 16 countries involved as to what level of liberalization would be implemented, with some agreeing for the inclusion of 92 percent of their products, while some have committed to a lower level of about 70 percent.

As far as investment and services are concerned, Rodolfo said some countries want to integrate “next generation” concepts like the ratchet and the automatic most-favored nation (MFN) into the RCEP.

These two concepts are seen binding and may affect the country’s policy flexibility, according to Rodolfo.

Rodolfo said ratchet is a concept wherein once a country decides to liberalize on a certain sector, it could not anymore undo its action and the only way moving forward is a progressive action or further increasing the liberalization of the said sector.

Under the automatic MFN concept, meanwhile, any future concession given by a country to a trading partner under a bilateral treaty or non-RCEP members would automatically get extended to RCEP members as well, the trade official explained.

“We have not committed on these in any of our free trade agreements that’s why we’re very careful in evaluating these two concepts. We have yet to agree on that ever. We can, but we have to seek the approval of Congress,” Rodolfo said.