WITH the Regional Comprehensive Economic Partnership (RCEP)’s recent entry into force, the Philippine Chamber of Commerce and Industry (PCCI) is calling on the government to allocate a higher budget for agriculture, noting that lowering of tariffs in the mega trade deal could “disadvantage” this sector.
In a statement on Sunday, the major business group stressed that while the RCEP commitments could open more opportunities for Filipinos to generate income, “there is still much to be done to make full use of the trade agreement.”
Among the sectors to pay attention to, the PCCI said, are the agriculture and manufacturing industries. Meanwhile, the business group said the government should also factor in the country’s competitiveness in terms of transport and power costs, among others, to utilize the regional trade deal.
“In joining the RCEP, we have to work hard to maximize our gains from it,” PCCI President George T. Barcelon said in his speech at the Department of Trade and Industry’s (DTI) International Trade Forum recently.
In line with maximizing the gains in the mega trade deal, he said, “We have to improve our competitiveness by streamlining regulatory compliance and ensuring that government business services are in step with these streamlined procedures.”
For one, the PCCI chief said, inputs to production like transport, logistics and power must be lowered to a “competitive” level to be on a par with the Philippines’s neighbors in the Association of Southeast Asian Nations (Asean) region.
In addition, he said, telecommunications and internet connectivity must be made available nationwide.
At a media briefing as RCEP entered into force last June 2, Trade Secretary Alfredo E. Pascual said, when asked how the government will respond to high energy costs plaguing businesses in the country: “Not all industries are power-intensive. I will agree [that] for power-intensive industries, the cost of electricity can be a handicap.”
What the government is doing is “trying to attract developers of electric generating capacities or plants particularly those in the renewable energy sector,” he pointed out.
Pascual said RCEP is “not a magic pill that if we sign up for it, all of a sudden our economy will boom.”
He also noted that “a lot of hard work is needed by government, private sector, by all those engaged in businesses with potential for exports.”
Zeroing in on businesses’ strategies to utilize the mega trade deal, Pascual said, “Definitely if businesses will respond to the potential gains in RCEP, we will definitely benefit.”
He noted that RCEP is expected to bring more investments and trade opportunities to the country.
RCEP countries account for 30 percent of the global gross domestic product (GDP) and one-third of total inward foreign direct investments (FDIs) as of 2022.
Meanwhile, Barcelon thinks, “Governments of the RCEP member-countries must be able to work on reducing non-tariff barriers, or at least agree on a uniform quality standard for food and other manufactured products across the region.”
For the Philippines, Barcelon said, laboratories to test quality standards should be put up in areas that are “readily accessible and available to local producers.”
Recognizing that the lowering of tariffs could “disadvantage” the agriculture sector and local food manufacturers, Barcelon urged the national government, the Department of Agriculture (DA) and the Department of Trade and Industry (DTI) to include “higher budget allocation” for the production of high-value crops and the agri-food industry.
“DTI’s important role in promoting our country as an investment destination and export promotion must be supported with more budget and resources,” Barcelon also noted.
In January, agricultural groups opposed through a statement the country’s ratification of RCEP as they feared an influx of imported produce into the country. This, despite RCEP proponents’ argument that sensitive products like rice, meats, vegetables and corn are exempted from tariff reduction; hence, there is nothing in RCEP to worry about.
The agricultural stakeholders said “there is no guarantee of their benefit to us because other RCEP member-countries will enjoy the same privileges. They will be the gainers, and we will be the losers, if they are more competitive than us.”
Under RCEP, only 33 agricultural tariff lines in the Philippines will be liberalized to the RCEP member-countries. RCEP proponents said this is equivalent to 15 agricultural products which are not produced in the Philippines. This means they are the only products that will have tariff reductions.
The 15 products are fish fillet; frozen mackerel; celery; sausages; olives; spinach; olive oil; live swine; live chicken; black pepper; palm nuts and kernels; preserved sweet corn, chilis and other capers; preserved onions; corn starch; and feeds for primates.
Image credits: Yulia Gapeenko | Dreamstime.com