RCEP non-participation to affect economy
TRADE Secretary Ramon Lopez on Thursday reiterated that non-participation or delayed participation in the Regional Comprehensive and Economic Partnership (RCEP) agreement would be detrimental to the Philippine economy.
“We cannot afford to delay or not participate in this free trade deal when all our neighbors in Southeast Asia are already reaping the advantages of the agreement. Our non-participation or delayed participation in RCEP would be detrimental to the Philippine economy as trade, investment and other economic opportunities that the RCEP may bring will be diverted to other economies,” Lopez said during the Management Association of the Philippines’ General Membership Meeting.
RCEP covers 2.3 billion people or about 30 percent of the world’s population and is expected to contribute $25.8 trillion or about 30 percent of global gross domestic product (GDP).
The agreement specific provisions covering trade in goods, including rules of origin; customs procedures and trade facilitation; sanitary and phytosanitary measures; standards, technical regulations and conformity assessment procedures; and trade remedies.
As of this date, only Indonesia and the Philippines have yet to complete their domestic ratification procedures.
Lopez warned that as other countries in the region enjoy the preferential treatment from enhanced market access, wider sourcing of raw materials and strengthened and transparent trading systems, the existing linkages of the Philippines to the global value chain may deteriorate as investors and businesses look to other countries for a better economic environment and opportunities.
“Even our exports could become less competitive as intermediate goods used as inputs for further production and manufacturing become more expensive in comparison to our competitors,” he said.
Lopez pointed out that for the Philippines, RCEP will lead to a net gain in the total trade balance by as much as $128.2 million, increase overall welfare by $541.2 million, contribute to a 1.93-percent real GDP growth and lower poverty incidence by 3.62 percent by 2031.
“As the world struggles to recover from the negative impact of the Covid-19 pandemic as well as the current Russia-Ukraine crisis, the RCEP presents a unique opportunity for the country and the region to rebuild the economies of the RCEP parties,” said Lopez.