If we do not want an agriculture disaster similar to what happened after our 1995 accession to the World Trade Organization (WTO), the Senate Regional Comprehensive Economic Partnership (RCEP) steering committee must now act with determination and haste. Vietnam took the necessary steps and benefitted from WTO. We did not, and consequently suffered. This is why the RCEP steering committee is critical.
There are already signs of both hope and danger from RCEP. Last Feb. 21, Senate President Miguel Zubiri and RCEP steering committee chair Loren Legarda identified RCEP conditionalities approved by the Senate. The resolution stated: “The oversight committee shall be provided with a comprehensive strategy and plan to harness competitiveness within three months from the adoption of this resolution.”
There was hope because, although four days late, this was submitted with some actions identified. There was danger because key conditionalities were not addressed.
Last May 9, 131 organizations which signed a document identifying RCEP dangers convened an all-day conference to address this issue. Although two Department of Agriculture-attached agencies sent representatives, the DA itself did not. They concluded that DA was not taking this issue seriously. This was the same government behavior they witnessed upon our WTO accession. This is so different from Vietnam’s, which succeeded while we failed.
Competitiveness
Our agriculture must be globally competitive, most especially now with RCEP. We are not definitely not there. Our agriculture trade balance has deteriorated by an embarrassing 33 percent from $8.9 billion in 2021 to $11.8 billion in 2022.
To be competitive, a DA budget is needed to enable this. Before President Marcos’ welcome 40-percent budget increase, our budget was 1.7 percent compared to Thailand’s 3.6 percent and Vietnam’s 6.7 percent. Worse, the Commission on Audit reported unliquidated and unexplained expenses of P22 billion in 2020 and P23 billion in 2021. This is one third of the DA budget.
Groups like the Alyansa Agrikultura asked for an investigation into this by the Senate Blue Ribbon and Senate committees. While waiting, the RCEP conditionality on the restoration of the public-private DA budget monitoring committee at local levels must be implemented immediately.
There is hope on this issue because some teams have been deployed to do this. One such report from a region showed instances of possible overpricing (e.g. P1 million instead of P250,000 for a corn sheller because of an alleged typographical error), and projects that did not exist in a given location (because of an alleged diversion to another barangay). These reasons may be valid, but the private sector identified these for more study. The danger is that up to now, the local provincial authorities and municipal councils are given a partial list to monitor, and not the complete list as specified in the proposal. Without this complete list, how useful can private sector monitoring be?
Smuggling
Using United Nations Commtrade statistics, the estimated smuggling amount has more than doubled from P500 billion in 2019 to P1.3 trillion in 2021. The restoration of a public -private antismuggling committee that had achieved a 25 and 31-percent smuggling rate reduction is a conditionality that has made progress. After talking to an Alyansa Agrikultura leader who was a part of this committee before it was abolished, a draft executive order was submitted by a senior government official. However, this hope †has been tempered by the danger of powerful individuals who have stalled its approval. The steering committee has the authority to oppose these individuals, because this issue is an important RCEP conditionality. If the committee is successful, more jobs from fair competition and increased investments from globally competitive ventures can then take place under RCEP.
It is now up to the steering committee to perform the critical follow-up function of calling the relevant departments to explain their action (or inaction) regarding key RCEP conditionalities. This way, the hopes will increase and the dangers decrease. Otherwise, we may face another WTO-like disaster for our already ailing agriculture.
The author is Agriwatch chair, former secretary of presidential flagship programs and projects, and former undersecretary of the Department of Agriculture and the Department of Trade and Industry. Contact is agriwatch_phil@yahoo.com.