Agriculture lobby expects limited downside to RCEP signing delay
By Alyssa Nicole O. Tan, Reporter
FURTHER DELAY in joining the Regional Comprehensive Economic Partnership (RCEP) trade deal would be “prudent” in light of the struggles of the agriculture industry, with consequences of late joining expected to be mild, industry representatives said.
“I believe that it is prudent to further delay the (trade deal) ratification. The Philippine economy, at this time and a couple of years from now, may still be wobbly,” Roy S. Kempis, retired Pampanga State Agricultural University professor, said in a Viber message to BusinessWorld.
The Philippines is still in the process of recovering from the pandemic, he added, while newly-elected members of government continue to work towards political and economic stability.
“As far as the agriculture sector is concerned, you will still receive the supposed benefits even if you don’t join the RCEP,” Samahang Industriya ng Agrikultura Executive Director Jayson H. Cainglet added in a Viber message to BusinessWorld.
“It’s been a year since RCEP, what have we missed? Nothing,” he said.
RCEP started taking effect in the various jurisdictions in January 2022. Participants include the 10 members of the Association of Southeast Asian Nations, Australia, China, Japan, South Korea, and New Zealand.
The Philippines and Myanmar are the only remaining countries that have yet to formalize their participation.
President Ferdinand R. Marcos, Jr. recently declared his support for joining the world’s largest trade bloc.
Policy research group Focus on the Global South has called joining RCEP premature as the final terms of Philippine participation remain under deliberation in the Senate.
“If they push for concurrence after only one TWG (technical working group) meeting, then it casts doubt on the sincerity of the Marcos administration to address the concerns of stakeholders,” it said.
“There should be no effect on our trade of a delay in RCEF ratification because all the opportunities offered by RCEP remain available to us under our existing FTAs (free trade agreements),” Federation of Free Farmers National Manager Raul Q. Montemayor told BusinessWorld via Viber.
He expressed doubt that potential investors consider Philippine membership in RCEP a “crucial factor” in deciding on investing.
The Philippines has a relatively large consumer market that RCEP member countries will want to tap, Mr. Montemayor said. “We do not need to convince them to sell to us.”
“Even if we do not join RCEP, locally-based foreign investors will already have access to all the other RCEP country markets by using existing FTAs,” he added. “I would think that concerns such as ease of doing business, cost and efficiency of utilities, traffic, etcetera would be more important considerations for investors.”
Mr. Marcos recently cited red tape and power costs as the top issues raised by foreign investors. “They bring up (the) ease of doing business, they bring up the cost of energy, they bring up the problems of legislative guarantees,” he said.
On the other hand, Asian Institute of Management economist John Paolo R. Rivera said in a Viber message that delaying accession would also delay access to the trade deal’s benefits.
“It would also delay our adjustment period to the new circumstances, when our neighboring economies who ratified have already adjusted. It widens our gap with them,” he said.
Victor Andres C. Manhit, president of the Stratbase ADR Institute, said in a text message that delay in joining the RCEP will also lead to lost opportunities in exports and employment.
“Foreign investors prefer conducting business in areas with a stable policy and regulatory environment and tend to veer away from countries that seem indecisive,” he said.
Kristine C. Francisco-Alcantara, managing partner of legal trade and technology firm Abad Alcantara and Associates and a Foundation for Economic Freedom fellow, said a delay may also set the Philippines back in terms of competitiveness.
In a Viber message, she said: “On top of the high cost of doing business in the Philippines, and the challenges we are facing in improving infrastructure and connectivity, the Philippine investment and trading framework will not be coherent or as compatible compared to other RCEP countries.”
Mr. Montemayor said that the RCEP “merely consolidates these FTAs, but does not replace them.”
“Almost all the commitments under RCEP in terms of tariffs and trade rules are carbon copies of what countries have already committed under the pre-existing FTAs,” he said, “so there is really not much new under RCEP in terms of additional trade concessions, and what we could potentially avail under RCEP is already available to us under the existing FTAs.”