The Philippines is racing against time to ratify the Regional Comprehensive Economic Partnership (RCEP), a mega free trade deal whose signatories account for nearly a third of the global economy, ahead of its effectivity on January 1, 2022.
Treaties or international agreements entered into by the government require Senate concurrence.
Members of the Senate foreign relations committee began deliberations on the RCEP last week. Another hearing was scheduled for Friday.
“There will be another committee hearing and hopefully after this, the RCEP can be presented and passed at the Senate plenary for ratification this November,” Trade Secretary Ramon Lopez said in a text message.
The RCEP was ratified by the Palace in September and then brought to the Senate for concurrence.
In a statement, the Association of Southeast Asian Nations (ASEAN) Secretariat said that as of November 2 it has received Instruments of Ratification/Acceptance (IOR/A) from six ASEAN member states – Brunei Darussalam, Cambodia, Laos, Singapore, Thailand, and Vietnam – as well as from four non-ASEAN signatory states – Australia, China, Japan, and New Zealand.
Under the agreement, the RCEP will enter into force 60 days after the date at which the minimum number of IOR/A is achieved.
This means that the RCEP agreement shall enter into force on January 1, 2022.
“The expeditious ratification process by signatory States is a true reflection of our strong commitment to a fair and open multilateral trading system for the benefit of the people in the region and the world. The implementation of the RCEP agreement starting January 1 next year will give a tremendous boost to the post COVID-19 economic recovery efforts,” said ASEAN Secretary-General Dato Lim Jock Hoi.
In November last year, Lopez signed the RCEP trade pact on behalf of the Philippines at the conclusion of the 37th ASEAN Summit and Related Summits.
RCEP is a trade accord that involves the 10-member ASEAN along with China, India, Japan, South Korea, Australia, and New Zealand.
India was initially included in the negotiations for the trade deal, but eventually pulled out in 2019 reportedly over various concerns, including possible influx of cheap Chinese products.
The RCEP will facilitate free or liberalized and simplified trade among the participating nations in the Trans-Pacific Region.
“The government together with key economists and experts have shown the net benefits of being part of RCEP and its positive contribution to GDP (gross domestic product) and trade, and conversely, the negative impact on growth, trade, investments and jobs of delayed or non-participation of the Philippines,” Lopez said.
“We should not be left behind. There are enough safety nets to vulnerable sectors and even the exclusions of sensitive lists of agriculture products,” he said.
Rice and other agricultural produce are protected from tariff reductions and eliminations under the RCEP, the Trade department earlier said.
The ASEAN Secretariat said the preparatory work for the entry into force of RCEP would continue.
The preparatory work undertaken by signatory states aims to lay a solid ground for the full and effective implementation of the agreement through finalization of the technical and institutional aspects of the agreement, it said.
Sought for comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said that if the country becomes a member country of RCEP, “this would boost growth in exports and imports, both of which boost overall economic/GDP growth.”
“Becoming a member country of RCEP would be worth it, to complement the country’s other Free Trade Agreements (FTAs), in terms of helping in attract more investments, boost exports, and create more jobs/employment opportunities as part of the priorities under the economic recovery program from the pandemic,” Ricafort said.
“Definitely, there would be foregone opportunities in terms of more investments and more jobs created as other ASEAN countries that are part of RCEP could attract more foreign investments/FDIs, with membership with RCEP would be a consideration by some global/multinational companies that aim to expand market reach at much lower costs. Thus, there would be some foregone incremental/additional GDP/economic growth for not being part of RCEP,” he added. — VBL, GMA News