Crucial 18 months
We have 18 more months to join the Regional Comprehensive Economic Partnership (RCEP), the longest free trade agreement that takes effect today, Jan. 1. So why rush into entering the deal when it could mean more damage to our already suffering agriculture sector?
We already experienced this kind of disaster when we joined the World Trade Organization in 1994. Since our government did not do the proper study and preparation to address the new trade regime, our people suffered.
Last Dec. 3, 51 agriculture organizations came up with a united position strongly opposing the Senate’s plan to ratify the RCEP to meet the Executive branch’s Jan. 1, 2022 deadline.
There was practically no consultation on the matter. The Department of Agriculture had stopped all international trade committee meetings of the public-private Philippine Council of Agriculture and Food for two years.
Thankfully, the Senate did not move. Still, some in the Executive branch still want the RCEP ratified shortly after Jan. 1.
Haste makes waste
Our already neglected, abused and suffering agriculture sector is at risk of facing more difficulties. Proper studies and consultations should be done to come up with a correct decision. We still have 18 months, not two weeks, to do this.
First of all, we should identify the threats, which the government has not done sufficiently. Free trade is good, but it must be fair. If imported products are subsidized while ours are not, our farmers and fisherfolk should get compensating protection for a level playing field.
We must give our agriculture stakeholders the necessary support measures and services that other countries give their own farmers and fisherfolk. Tariff reductions without the proper timetable do not give us a chance to prepare properly.
Consider the following consequences, documented by Joseph Purugganan of Focus on the Global South.
IMPORTS. A study by Dr. Rashmi Banga shows that the Philippines will see imports from Asean (Association of Southeast Asian Nations) countries fall, while those from China and Korea will rise. This will result in a net import increase.
EXPORTS. Indonesia, Thailand and Brunei will see their exports rise; ours will decrease.
REVENUE LOSS. Even though we will have more imports, revenues will decrease because of lower tariffs.
The above should be subjected to investigation and consultation with our agriculture stakeholders. A major consequence from joining a more liberalized RCEP agreement is more job losses because of the inadequate government support we are getting.
Based on the Philippine Schedule of Tariff Commitments, 83 percent of all tariff lines will face zero tariffs. While we have already decreased our tariffs substantially through our Asean+1 free trade agreements, we will decrease these further under RCEP.
For China, Korea, Australia and New Zealand, some products with an ending tariff rate of five percent will go down to zero. For China and Korea, some product tariffs will go down immediately to zero on the very first day of RCEP accession.
A study using United Nations data shows that “developed countries like Japan and New Zealand protect 21 percent and 28 percent of their pre-RCEP imports by value under their [sensitive lists] and [tariff rate quotas], while Asean has protected theirs only on an average 19 percent of pre-RCEP imports by value.”
All of the above information require investigation and consultation with our agriculture stakeholders. If India is deferring joining RCEP until a thorough study is done, should we not do the same?
It would be disappointing and insensitive if the Senate ratifies RCEP in two weeks without proper consultation. INQ
The author is Agriwatch chair, former Secretary of Presidential programs and projects and former undersecretary of DA and DTI. Contact is [email protected].
