Where we ended up after joining the WTO
The success or failure of an international trade agreement can be determined by comparing the promises it provided and its actual performance. As the Senate considers ratifying the Regional Comprehensive Economic Partnership (RCEP), we should learn from our World Trade Organization (WTO) experience.
Based on the information the Samahang Industriya ng Agrikultura (Sinag) gave the Senate, let us compare the promises provided when we signed the deal and the country’s actual experience under it.
On increasing the gross value added of agriculture by P60 billion: in 1993, the share of agriculture vis-a-vis the gross domestic product was at 21 percent; in 2018, this went down to 10 percent.
On providing additional 500,000 jobs annually: in 1993, agriculture workers totaled 11.14 million (40 percent of the labor force); in 2019, 9.7 million (or 23 percent).
On improving the agriculture balance of trade: in 1993, it stood at a positive $292 million; in 2020, negative $6.4 billion.
Our agriculture budget as a share of total budget also decreased: in 1993, 2.7 percent; in 2020, 1.6 percent. Today, agriculture’s budget share is 2 percent, a far-cry from Thailand’s 4 percent and Vietnam’s 6 percent.
Based on the numbers above, the WTO failed us.
Preparatory steps
Vietnam took the necessary steps to address the repercussions from entering the WTO, which is why they are far ahead of us today.
Alarmingly, we are on the verge of ratifying the RCEP—a more extensive version of the WTO deal. Yet, we have not addressed until today the international trade problems that came with WTO.
Last March 14, the international affairs committee of the public-private Philippine Council for Agriculture and Fisheries (PCAF) met to discuss the RCEP and what the Department of Agriculture (DA) is doing to prepare for it. In the end, the DA did not identify even just one threat despite the contrary opinion from 104 organizations.
At the committee meeting, the Alyansa Agrikultura presented five actions to address the threats.
Given the need to at least double the DA budget, there is also a need to ensure the money is used properly. It was recommended that the private sector should help in monitoring budget use.
RCEP constitutes an expansion of WTO, thus there is the likelihood of smuggling getting worse. The successful public-private oversight committee structure to support and monitor the Bureau of Customs should likewise be restored.
Quarantine measures have to be strengthened. Compared to our immediate Southeast Asian neighbors, we still do not have an integrated quarantine facility at our border.
Safeguard measures must also be strengthened. We did not have one when rice tariffication was implemented, and so while our retail prices dropped by a minimal 2 percent, our farmers’ incomes decreased by 23 percent. The middlemen took most of the profits.
Preparatory measures must be implemented. For the vulnerable sectors, threats must be identified and recommended actions must be taken up.
Twenty years since it was legislated, a market information system has yet to be put in place. Necessary support services and subsidies should be provided, similar to what our neighboring countries did. Subsector road maps containing critical short-term plans must be actualized with the help of public-private implementation teams.
Like Indonesia, we must ask our National Security Council to look at food security as part of national security, especially when cases of irresponsible import liberalization harm our agriculture sector.
The PCAF’s competent and committed staff should be commended for harnessing private participation in governance. But it is still the DA that is ultimately responsible for making sure that trade agreements don’t end up a disaster.
The author is Agriwatch chair, former Secretary of Presidential programs and projects and former undersecretary of DA and DTI. Contact him at [email protected].
