THE benefits to the farm sector that the country will gain from ratifying the Regional Comprehensive Economic Partnership (RCEP) agreement will far outweigh the liberalization of 33 agricultural tariff lines, government officials said Monday.
At the Senate Committee on Foreign Relations hearing, officials from the Department of Trade and Industry (DTI) and the National Economic and Development Authority (Neda) insisted that the agriculture sector will not be a loser under the RCEP, adding that the concerns by certain quarters regarding the trade agreement have been addressed.
In fact, Bien A. Ganapin, director of Trade, Services and Industry Staff at Neda, and Trade Assistant Secretary Allan B. Gepty argued, the local agriculture sector, especially exporters, would benefit more from RCEP since trade-partners have agreed to ease their tariff rates on Philippine products.
Export market gains
“We will miss a lot more in terms of the export market since the RCEP region is significant. The Philippines’ exports to RCEP countries account for 50 percent of our total trade,” Ganapin told lawmakers on Monday.
Ganapin presented to lawmakers the country’s agricultural tariff lines that will be liberalized and agricultural export products that will enjoy lower tariff rates under the RCEP.
Ganapin’s presentation showed that only 15 commodities with 33 agricultural tariff lines will be further liberalized under RCEP (lower tariffs compared to their most favored nation [MFN] rates and some Asean+1 rates). Ganapin noted that these tariff lines account for only 0.8 percent of annual import volume with an estimated value of $132 million.
The 15 commodities that will have their tariff rates slashed in the course of 15 to 20 years would be live swine, live chicken, live chicken weighing not more than 2 kilograms, celery, preserved vegetables, corn starch, meat sausages, frozen fish, palm nuts and kernels, olive oil, feeds for primates, spinach, and black pepper.
These 15 commodities are the only ones that may affect an existing domestic industry, based on Ganapin’s presentation.
Ganapin’s presentation also showed that an additional 105 tariff lines concerning 34 agricultural commodity groups under Category C1 will be liberalized under RCEP. The 34 agricultural commodity groups account for about 12.3 percent of total agricultural imports with an estimated import value of $2.1 billion.
Ganapin explained that the tariff rates of these 34 agricultural commodity groups will be lower compared to their current MFN rates, but still higher or on a par with their Asean+1 rates. These imported products under Category C1 would not impact or affect any local domestic industry.
The products under Category C1 include non-dairy creamer, pasta, yogurt, dairy spreads, meat of goats, live sheep, live poultry, preserved meat, salted fish, leeks, salad beetroot, cucumbers, pumpkins, chocolates, among others.
Gepty’s presentation argued that the RCEP would keep Philippine agricultural exports competitive against the member-countries of the trade pact. Gepty pointed out that various agricultural exports will have zero tariff rate in key markets like China, Japan and South Korea over the 20-year implementation of RCEP.
The Philippines’s exports involving 511 tariff lines will have improved tariff rates from RCEP trade-partners.
Some of the country’s exports that would have zero percent tariff are papaya, durian, canned tuna, and alcoholic beverages to South Korea as well as coffee, chocolates, pineapples and pineapple products to Japan and China, among others.
“If ever we have opened our market to the 33 agricultural tariff lines, our sensitive products have been constantly excluded from [further liberalization]. Those are sacred products whether we are competitive in them or not, because these products have social repercussions,” Gepty said.
The commodities that are part of the exclusion list are edible meat products, rice, coffee, onion and garlic, potatoes, carrots, cassava, corn, lettuce, cabbage and cauliflower, sugar, instant coffee, among others, with a total tariff lines of 154.
Socioeconomic Planning Secretary Karl Kendrick T. Chua said the government will continue to give priority to making the agriculture sector competitive and productive “in parallel to pursuing the RCEP agreement.”
“We will help the agriculture sector be competitive and productive because that is the foundation of our structural transformation to become a prosperous country. But not at the expense of all the other sectors that also need our support. So, what we propose is to do things in parallel: ratify the RCEP but also help the agriculture sector become more competitive,” Chua said.
Trade Secretary Ramon M. Lopez said RCEP is “beyond liberalization” because of the Asean and the Asean+1 free trade agreements that already have a high rate of liberalization of about 85 percent to 95 percent.
“Joining RCEP just means increasing it by three points more. Delaying RCEP means losing opportunities to bring our products to other countries with lower tariffs and losing these markets, as well as other opportunities opened by RCEP in areas such as services, investment, MSMEs, e-commerce, for Filipino services exporters and skilled professionals,” he said.
The RCEP is a free-trade agreement among the 10 members of the Association of Southeast Asian Nations (Asean), along with China, Japan, South Korea, Australia, and New Zealand. This covers roughly 50.4 percent of the Philippines’ export markets, 67.3 percent of the country’s import sources, and a source of 58 percent of Foreign Direct Investments (FDI).
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