SAYING the benefits outweighed the oft-cited risks to certain local sectors, the Philippine Senate on Tuesday adopted Resolution 485 concurring in the ratification of the Regional Comprehensive Economic Partnership (RCEP) Agreement, the mega trade deal creating the world’s largest free-trade zone.
Twenty senators voted in favor of the treaty, four votes more than required number of 16, advancing the treaty that had been signed in the previous administration, but which was not ratified in the 18th Congress for lack of time to tackle serious concerns that it would permanently, substantially damage key sectors, especially agriculture.
The lone No vote was cast by Deputy Minority Leader Risa Hontiveros, while Sen. Imee R. Marcos, who had earlier questioned the wisdom of stampeding the Senate into ratification, abstained despite the endorsement given RCEP by her brother, President Ferdinand R. Marcos Jr.
Senators stood up one after the other late Tuesday to interpellate the treaty’s main endorsers in the chamber—Senate President Juan Miguel Zubiri and Senate President Pro Tempore Loren Legarda—as well as grill the country’s top negotiator, Assistant Secretary Allan B. Gepty of the Department of Trade and Industry (DTI).
Gepty was earlier grilled at length by Sen. Chiz Escudero, who was not impressed by the argument that only a little over a dozen agricultural commodity groups will have tariff rates lower than were set under existing free-trade agreements among Asean countries.
Escudero said the exclusions list—of so-called “sensitive items”
meant for protection—bears no comfort for the local sectors, because under the treaty, the Executive Department or Congress can change “tomorrow, next week, next month” the exclusion lists embodied in the annex of the RCEP. The annex is not considered a formal part of the treaty, he noted.
Minority Leader Koko Pimentel, the last to interpellate Zubiri, noted that initially, only 10 groups had openly objected to ratification, but now, he added, there are 100 groups and individuals who put out an ad rejecting ratification. He wondered aloud if their serious concerns about the treaty’s impact can be fully redressed.
Legarda conceded that “this is not a magic pill,” but added that, “only the industry can give positive changes.” RCEP or not, “we have to help affected sectors,” she stressed.
Neda chief: Only chance for FDI, jobs
In a separate development also on Tuesday, the National Economic and Development Authority (Neda) said RCEP “must be ratified” since the trade deal will ensure the country is able to attract investors to ensure the economy’s recovery, according to
In a virtual briefing, Neda Secretary Arsenio M. Balisacan said ratifying the RCEP will ensure that the country can compete with its neighbors in terms of attracting foreign investments.
He said the country and its neighbors are competing to attract the same investments. Signing on to the RCEP improves the country’s chances of seeing those investments come to the Philippines.
Based on 2021 trade data from the International Trade Center, under the RCEP, only 15 agricultural commodity groups corresponding to 33 tariff lines will have lower tariff rates compared to some ASEAN+1 FTAs, the NEDA said
This is equivalent to only 1.9 percent of the total 1,718 agricultural lines and only 0.8 percent of the total agricultural imports. Of these 33 tariff lines, 17 are raw materials, 8 are intermediate products, while only 8 are final goods.
The remaining agricultural tariff lines will have equal or higher rates compared to other ASEAN+1 FTAs, or are excluded from import tariff concessions under the RCEP.
The Philippines currently exports a number of products for which concessions were secured (e.g., preserved pineapples, pineapple juice, chocolate) and securing better market access for these products through RCEP opens the possibility to further widen the market base in these countries.
Take it or leave it
Earlier on Sunday, Escudero had said the vote ratifying the RCEP should not be rushed, as senators are closely studying serious concerns raised about the risk of the treaty adversely impacting some Philippine economic sectors.
It’s a “take it or leave it” proposition, because “we senators can only vote to ratify or reject the treaty,” and “it’s not the usual lawmaking we do where we can tweak provisions to cure perceived problems,” Escudero explained, partly in Filipino, in a radio interview.
Sixteen senators last week signed the committee report on RCEP, and no less than Zubiri delivered an impassioned speech on the urgency of ratifying it, as Legarda sponsored the report in plenary. Legarda heads the foreign relations subcommittee that held hearings on the treaty creating what has been billed as the world’s largest free trade area.
According to Escudero, “all we[senators] can do” is to secure a firm assurance at every step from the Executive that, being the implementing arm, it will always make sure no Philippine sector is unduly harmed when the country starts complying with its treaty obligations.
Zubiri had indicated a timeline for the Senate vote to ratify the RCEP before the March 24 adjournment of Congress, noting in his speech that, by its failure so far to ratify, the Philippines is “the odd man out, the last man standing” among countries that earlier signed onto RCEP.
However, Escudero said, senators must be given the chance to thresh out all serious concerns raised about the treaty, with no less than the President’s sister, Sen. Imee Marcos, earlier asking aloud, why the chamber is being stampeded into rushing ratification on the ground that the Philippines is the only one that has not done so.
RCEP ensures investments, jobs
At the Palace briefing, Balisacan said RCEP “must be ratified” since the trade deal will ensure the country is able to attract investors to ensure the economy’s recovery.
Balisacan said ratifying the RCEP will ensure that the country can compete with its neighbors in terms of attracting foreign investments.
He said the country and its neighbors are competing to attract the same investments. Signing on to the RCEP improves the country’s chances of seeing those investments come to the Philippines.
“It must be ratified. It must be ratified. A lot of the future of this country, of our country, depends so much on our ability to attract investors, particularly foreign capital because domestic capital is not enough,” Balisacan said.
“Without those investments, massive investments, you can’t expect to generate high-quality jobs—that’s plain and simple. We need a lot of investments,” he added.
Balisacan also said, given the limited fiscal space of the national government, the only way the country can maintain its growth is to get more investments.
“The only way we can grow and maintain our growth at the rate we have experienced last year is to get investments, players that can build infrastructure for us, build plans and equipment for us so that jobs can be created,” he stressed.
Balisacan also reiterated his stand that the RCEP will not have a negative impact on the agriculture sector. He pointed out that all the challenges in the agriculture sector stemmed from “past neglects of the sector.”
Earlier, Neda said that 2021 trade data from the International Trade Center showed under RCEP, only 15 agricultural commodity groups corresponding to 33 tariff lines will have lower tariff rates compared to some ASEAN+1 FTAs.
This is equivalent to only 1.9 percent of the total 1,718 agricultural lines and only 0.8 percent of the total agricultural imports. Of these 33 tariff lines, 17 are raw materials, 8 are intermediate products, while only 8 are final goods.
The remaining agricultural tariff lines will have equal or higher rates compared to other ASEAN+1 FTAs, or are excluded from import tariff concessions under the RCEP.
“The very low productivity of agriculture has nothing to do with RCEP. In fact, my view is that by adapting RCEP, we are ratifying RCEP, we’ll be even more forced to pay attention to agriculture because only then can you fully maximize the benefits that RCEP can give to us,” Balisacan said.
Image credits: Senate PRIB photo