As RCEP takes effect, DTI says safeguards in place in case of import surge

The Department of Trade and Industry (DTI) assured local industries on Friday that measures are in place to protect them from a possible surge in imports as the operationalization of tariff commitments under the Regional Comprehensive Economic Partnership (RCEP) takes effect.

The Philippines' participation in the mega-free trade deal began on Friday, June 2, 60 days after the government submitted its instrument of ratification in April.

At a press briefing in Makati City, Trade Assistant Secretary for International Trade Policy Allan Gepty said the DTI, through its Bureau of Import Services, is implementing an import surge monitoring system.

"When you’re under a free trade regime, basically you’ve opened or liberalized the market either by lowering or making zero the tariffs for certain products," Gepty said in a mix of Filipino and English.

"One big concern of local producers is the competition with imported products coming into our country. But, when imported products reach a point where the volume and value are too large and the increase is too swift and it threatens local producers, we have what we call a trade remedy," the DTI official said.

A free trade pact first floated in August 2012, the RCEP removes at least 90% of tariffs on imports within signatory countries, covering the 10 members of the Association of Southeast Asian Nations (ASEAN) and its partners Australia, China, Japan, South Korea, and New Zealand.

The trade deal will also establish uniform rules on trade facilitation and intellectual property.

Gepty said that if the DTI determines that the entry of imported products is already threatening local producers, the agency can activate "safeguard measures" such as "additional charges or additional safeguard duties."

"It’s effect will be, the cost of importation will be higher, which will then be a deterrent for importers," the DTI official said, adding that additional charges or duties will also make the pricing fair between local and imported products.

Trade Secretary Alfredo Pascual said that safeguard duties are only applicable to imported products that might threaten local producers.

"If the surge in imports won’t affect local producers, it’s okay," Pascual said.

The RCEP took effect on January 1, 2022, after the ASEAN Secretariat received the instruments of ratification or acceptance from six ASEAN-member states—Brunei, Cambodia, Laos, Singapore, Thailand, and Vietnam—as well as from four non-ASEAN signatories—Australia, China, Japan, and New Zealand. 

In the Philippines, it was ratified by then-President Rodrigo Duterte in September 2021 and by President Ferdinand "Bongbong" Marcos Jr. in November 2022. It was concurred in by the Senate in February 2023.

According to the DTI, the RCEP is expected to generate a 10.47% increase in the country’s exports and a 2.02% increase in real gross domestic product.

The DTI said rice and other agricultural products are protected from tariff reductions and eliminations under the RCEP. 

RCEP countries account for 30% of global gross domestic product and one-third of total inward foreign direct investments as of 2022.

"RCEP is a mega free trade deal that will also facilitate the influx of more investments in the country," Pascual said. —VBL, GMA Integrated News