When fools rush in
Farmers and fisherfolk leaders are not fools who rush in to endorse an international trade agreement they have not even seen. Some had expected this to happen during a Senate hearing on Nov. 5. This was for an initially planned agriculture endorsement for the Regional Cooperation Economic Partnership (RCEP).
Instead, farmers and fisherfolk leaders, coordinated by Federation of Free Farmers national manager Raul Montemayor, told the Senate they had to study the RCEP first before endorsing it.
International trade agreements sometimes have disastrous results, especially where agriculture is concerned.
Before joining the World Trade Organization (WTO) in 1994, our government told us that this would result in agriculture gaining yearly 500,000 new jobs, P3.4 billion in increased exports, and a significant increase in agriculture gross value added. The opposite happened. It was disastrous for our agriculture, mainly because of the way our officials managed our WTO accession.
Joining the WTO would have been beneficial for agriculture if the promised support services and safety nets were given. Our government agreed to tariff reduction at too fast a pace. We did not even ask for compensating measures from other countries, resulting in our unilateral disarmament.
RCEP transparency Regarding RCEP, the private agriculture sector should have been allowed to propose provisions that would have made RCEP more beneficial than it is now. Instead, two years ago, the Department of Agriculture terminated all quarterly and special meetings of the International Trade Committee where the private sector participated. This committee was an integral part of the legally mandated public-private Philippine Council of Agriculture and Fisheries.
During this time, the agriculture sector was kept in the dark on critical trade issues. Examples were the rice tariffication implemented without the necessary safeguard measures, excessive tariff reductions that favored subsidized imports, and critical international trade agreements like the RCEP.
Montemayor found out about the RCEP only two days before its planned ratification. This is particularly frustrating for Montemayor. He had previously contributed his views as the committee’s private sector adviser for the government WTO panel. The panel agreed to his recommendation that safeguards should be provided to protect us from import surges. The Philippines won its stand that only three conditions would be required to implement these safeguards: 1) there was a large import surge; 2) our industry was damaged during the surge, and 3) the damage we suffered was caused by this surge.
WTO victory setback
To Montemayor’s shock, he found out that the safeguard measure we had won at WTO was effectively diminished with the RCEP. He had not been informed about this during the negotiations because private sector participation had been terminated.
RCEP added three stringent requirements to the current WTO agreement:
1. The additional customs duty cannot exceed the existing most favored nation rate
2. This safeguard measure cannot be applied to any least developed country RCEP member
3. There must be “trade compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional customs duties expected from the measure”
These new conditions make RCEP much more restrictive than WTO in our ability to use safeguard measures. This is especially important at this time when we must protect our farmers and fisherfolk from a flood of subsidized imports. There are other RCEP provisions that harm the agriculture sector, which have not even been discussed. Currently, there is pressure that the RCEP be approved immediately, even if we can approve it at any time later when we have made the preparatory necessary arrangements, as India is now doing.
Farmer and fisherfolk should be given a chance to study RCEP first since it greatly impacts their lives. After a short period, they may agree to endorse it. But this time, they will be able to make preparations to address RCEP’s disadvantages, which did not happen when we joined the WTO with disastrous agriculture results. The private sector can also propose amendments, which they could not do earlier simply because their participation was stopped.
Farmers and fisherfolk should not be treated like fools. They should be regarded as partners who can prevent trade abuses and take advantage of trade opportunities, both of which RCEP has if we should join it.
The author is Agriwatch chair, former Secretary of Presidential programs and projects and former undersecretary of DA and DTI. Contact is [email protected].
