By Atty. Gilberto Lauengco, J.D.

Thriving under the RCEP

February 22, 2023, 6:18 pm

On Feb. 21, the Philippine Senate ratified the Regional Comprehensive Economic Partnership (RCEP) with 20 senators (more than the required two-thirds vote), voting in favor of the Senate resolution regarding the same.

The RCEP is a free trade agreement among the members of the Association of Southeast Asian Nations and five other countries namely Australia, China, Japan, South Korea and New Zealand. Simply put, RCEP creates an integrated market among the member countries making it easier for products and services of each of the members to be available across the region.

The RCEP agreement integrates other Free Trade Agreements already in existence. With the lowering of tariffs as its primary feature, it also includes support for micro, small and medium enterprises, simplification of rules of origins and other features consistent with the aim of free trade with safety nets.

RCEP and free trade, in general, has been the topic of hot debate in our country for the past years.

Opponents of RCEP and any form of trade liberalization claim that it would pose dangers to our small businesses, farmers and fisherfolk as cheap imported products enter our country. They have demanded that the government must first implement programs to boost the competitiveness and profitability of these sectors. They argue that farmers in particular are not prepared for a more liberalized trade environment.

Proponents of RCEP have always stressed that delaying the ratification of RCEP or worse rejecting it would leave the Philippines out of the free trade bubble. Neighboring countries would take over certain markets. For example, the textile industry alone would continue to be left behind as other countries continue to have access to cheaper materials. Investors from other countries would hesitate locating in the Philippines as access to cheaper imported materials would be unavailable. Without the RCEP, we will not have access to the member country markets. In essence proponents point out that business and the ordinary consumer will benefit from access to cheaper goods and services.

Proponents of RCEP have also clarified that sensitive agricultural products like rice, swine and poultry meat, potatoes, onions, garlic, cabbages, sugar and carrots will remain protected under the agreement.

Insofar as this debate is concerned, it is respectfully submitted that our country must join the RCEP community. With due respect to our friends in the agricultural sector, we cannot and should not maintain a strategy of trade protection and isolationism. The cost of becoming an economic loner in a region that is fast becoming an integrated market is something we cannot afford. Rather than protection, we must therefore seek to strengthen our agricultural sector.

The RCEP like many trade agreements and mechanism is a tool that can create opportunities when used properly. The trick then is to adapt and use RCEP.

There are several goods and services which our country’s business sector can compete regionally. There are several government initiatives now in place that business can avail of to strengthen competitiveness.

Even with free trade, foreign corporations will still need local partners to properly peddle and distribute goods here. These partnerships will allow local partners to learn and eventually grow.

Our country can encourage non-RCEP member countries like Taiwan to invest in the Philippines to avail of the benefits of the lower trade barriers

Insofar as protecting our agricultural and other vulnerable sectors is concerned, private sector must join hands with the government in taking advantage of the opportunities of free trade while assisting agriculture and other vulnerable sectors.

Entering into social enterprise partnerships with farmers and fisherfolk can help these sectors gain the needed funds and expertise to grow. There are government programs designed to assist farmers. Private know how can help farmers avail of these programs properly. The benefits of entering joint ventures with farmer cooperatives is largely underutilized by private sector.

For our country to fully take advantage of RCEP while protecting agriculture, we must take the “whole of village approach”. Every sector must now pitch in to help our farmers and fisherfolk. RCEP will create a new world. We must all help each other to survive and thrive.

This is my oblique observation.

Editor’s note: The opinions expressed in the foregoing article are solely the author’s and do not reflect the opinions and beliefs of the Philippine News Agency (PNA) or any other office under the Presidential Communications Office.


About the Columnist

Image of Atty. Gilberto Lauengco, J.D.

ATTY. GILBERTO LAUENGCO, J.D. is a lawyer, educator, political strategist, government consultant, Lego enthusiast, and the director of CAER Think Tank. He is a Former Vice Chairman of MECO, Special Assistant of NFA and City Administrator among others. His broad experience has molded his unique approach to issues analysis which he calls the oblique observation.