Ratification of RCEP prioritized under BBM
The economic team of the incoming Marcos administration is set to push for the ratification of the country’s participation in the Regional Comprehensive Economic Partnership (RCEP).
“To me that is the first order of business of the incoming administration,” incoming finance secretary Benjamin Diokno said in an interview with One News’ “The Chiefs.”
After the Senate adjourned its last session without taking a vote to ratify the RCEP, the Philippines joined Indonesia and Myanmar among countries not included in the world’s biggest trade agreement that took effect last Jan.1.
“We were almost there eh, naubusan lang tayo ng oras (we just ran out of time). So I think that should be the first order of business since kontrolado na
ni president-elect Marcos ang Senado,” the outgoing governor of the Bangko Sentral ng Pilipinas said, referring to the Senate that will be dominated
by Marcos allies.
President-elect Ferdinand Marcos Jr. has cited the need to review the trade agreement’s impact on the agriculture sector.
RCEP creates the world’s largest free trade area, accounting for about 30 percent of the global gross domestic product. Participants include Australia, China, Japan, South Korea, New Zealand and some members of the Association of Southeast Asian Nations (ASEAN).
RCEP, which was ratified by President Duterte last September, still needs Senate concurrence before the country can deposit its instrument of ratification to the ASEAN.
“We just have to convince them using the best argument with them that RCEP really is for the best interest of the country and other members of the ASEAN,” Diokno added.
The country’s largest business organizations led by the Financial Executives Institute of the Philippines, Makati Business Club, Management Association of the Philippines and the Philippine Council for Foreign Relations reiterated their call for the Senate to ratify the Philippine membership in the RCEP.
The groups pointed out that the world’s largest economic bloc is a huge market to which Filipino producers would gain preferential access via membership in RCEP.
“Like any free trade agreement, RCEP provides wide economic opportunities for our country, along with certain threats to uncompetitive industries and individual producers and their workers. 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 groups said.
They added the RCEP would help micro, small and medium enterprises expand market access, especially with more liberal rules of origin on traded products to qualify for trade concessions.
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.
“Exclusion from RCEP would be immensely costly to our economy and our people. 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,” the groups warned.
Furthermore, they said failure to ratify the RCEP would make the Philippines even more unattractive to job-creating investments.
“We see our membership in RCEP as an important challenge to our government to step up genuine and meaningful support for Filipino producers, especially in the agriculture sector, which is the backbone of the Philippine economy,” the business groups added.