Local business groups urge Senate to ratify PHL’s RCEP membership

Local business organizations have again urged the Senate to ratify the Philippines’ membership of the Regional Comprehensive Economic Partnership (RCEP), the largest economic bloc in world history. (See also “Senate resumes RCEP debate, sponsor Koko Pimentel hopes for final day ratification vote”).

In a joint statement Wednesday, the business organizations said, “The Financial Executives Institute of the Philippines (FINEX), the Makati Business Club (MBC) and the Management Association of the Philippines (MAP) would like to reiterate our call to the Senate. ratify the Philippines’ membership of the Regional Comprehensive Economic Partnership (RCEP), the largest economic bloc in world history.

In their earlier joint statement dated January 21, 2022, the business organizations pointed out that RCEP’s 15 member economies, made up of the ten ASEAN members plus Australia, New Zealand, China, Japan and Korea of the South, together account for 30% of the world’s population and of the world’s gross domestic product (GDP). As such, it is a huge market to which Filipino growers would have preferential access through RCEP membership.

Like any free trade agreement, they pointed out, the regional trade agreement offers vast economic opportunities to the Philippines, as well as certain threats to uncompetitive industries, individual producers and their workers.

Local business organizations have pointed out that the Philippines has the fewest completed free trade agreements compared to other Asian countries like Indonesia, Malaysia, Thailand and Vietnam.

“And like in 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 creation jobs, economic growth and price stabilization will more than offset the costs,” the business organizations stressed.

In addition, local business groups stressed that “government has a responsibility to help those who are affected in a meaningful and effective way, to enable them to achieve competitiveness or adapt to products or means alternative livelihoods”.

Business organizations have also focused on MSMEs, as they will potentially benefit from expanded market access under RCEP, especially with more liberal rules of origin on products traded to benefit from trade concessions.

In addition, the business groups said, “it will also provide wider and cheaper alternative sources for inputs and reduce the costs of doing business through better trade facilitation, in particular customs clearance and customs clearance procedures. clearance”.

Business organizations noted that exclusion from the regional trade agreement would be extremely costly for the Philippine economy and its people.

Indeed, these business groups pointed out that “we can anticipate a significant decline in our exports to RCEP countries, which now account for nearly two-thirds (64%) of our total exports, as trade with us will logically be diverted to other countries”. members.”

Apart from that, they said, opting out of the regional economic agreement would make the Philippines even less attractive for job-creating investments than we already are, as these would be better located in the countries RCEP members to take advantage of free access to its vast market.

Similarly, the Philippines’ membership could attract more foreign investment to the country from companies wishing to produce and sell in the large RCEP market.

“RCEP skeptics should be reassured that little will immediately change in the country’s trade relationship since RCEP only reaffirms the existing trade concessions we already have with all RCEP members through the agreement on the ASEAN Trade in Goods (ATIGA) between ASEAN Members and ASEAN-Plus Free Trade Agreements with the rest,” the local business groups said in a joint statement.

Additionally, business organizations have noted that the elimination of tariffs will take up to 20 years, which will allow enough time for the Philippines to mold itself and achieve the competitiveness that will allow our producers to take full advantage of the vast opportunities market offers offered by RCEP.

Local business groups further explained that negotiators had excluded from tariff liberalization sensitive agricultural products, including pork and poultry meat, potatoes, onions, garlic, cabbage, sugar , carrots and rice, as well as manufactured products such as cement and certain iron and steel products.

With this, professional organizations consider the Philippines’ accession to the regional trade agreement as an important challenge for our government to provide real and meaningful support to Filipino producers, especially in the agricultural sector, which is the thorn backbone of the Philippine economy.

“We therefore urge the government to provide a substantial increase in the agricultural budget commensurate with that expected in our comparable ASEAN neighbors, as we urge our senators to ratify the RCEP agreement without delay,” the Philippine business organizations stressed.

Picture credits: Photo from BusinessMirror file