Salceda backs ASEAN trade ministers' signing of regional free trade pact

Albay Representative Joey Salceda on Thursday welcomed the decision of the trade ministers of ASEAN member-states to sign a regional comprehensive free trade agreement, but stressed the need to come up with three critical plans to make the pact effective.

In a statement, Salceda, an economist himself, responded to the report that the trade chiefs of ASEAN countries and partners Australia, China, Japan, Korea, and New Zealand have reaffirmed to sign the China-backed Regional Comprehensive Economic Partnership (RCEP) before the end of 2020.

If properly negotiated, Salceda said the RCEP can help the Philippines gain access to a wider market for its goods and services.

"This is critical in our bid to have a greater role in the global value chain, especially as China's labor costs are increasingly becoming less competitive, and more firms seek to move out of that country," he said.

"Meanwhile, lower imports costs for such products as steel and other materials we need for Build, Build, Build will definitely be favorable for our overall economic development strategy," he added.

Salceda, however, pointed out some caveats with regards to the free trade agreement.

For one, he said the Department of Trade and Industry should come up with a strategy to ensure that the country has a "domestic push" to manufacture high-value products for export instead of just making its raw material exports cheaper.

"Our non-renewable commodities such as minerals should be transformed into higher value goods here, and not abroad," he said.

Salceda also stressed that at least three critical game plans must be present when a country enters into trade agreements.

"One, you need a plan to improve gross value-added. If bananas are all we can offer the global market, we lose. Two, you need a labor force development plan. Is our education and job training system ready to face more competition from the global market?" he said.

"Three, you need to have a comprehensive agriculture plan. Mind you, Australia and other participants in the RCEP are agricultural giants. The only protection you can give your agricultural sector in a globalized world is price and quality competitiveness, and value-added," he continued.

In the end, Salceda said his support for the RCEP comes with the condition that the three critical plans he pointed out be present and concretized.

"I will be looking very closely into the tariffs portion of the agreement, as these fall under my committee's jurisdiction," he said.

Once in force, RCEP is poised to be the world's largest trade deal by population and gross domestic product. -MDM, GMA News