RCEP conditionalities in limbo

Six key agriculture conditionalities identified in the February 21 Senate ratification document of the Regional Comprehensive Economic Partnership (RCEP) have not been met. In the eight months since the ratification, very little has been done to address the issues.

The RCEP document states that if the executive branch does not enforce the provisions: “The Senate of the Philippines may recommend to the President the withdrawal from the agreement.”

While many argue that the trade deal is beneficial to the industry and service sectors, this is not the case for agriculture.

Last April, 141 organizations wrote the Senate identifying the dangers RCEP posed to agriculture. Responding to this valid concern, Senator Loren Legarda said that she would resign as RCEP sponsor unless conditionalities were specified in the ratification document.

The six conditionalities listed here were approved by the international trade committee of the legislated public-private Philippine Council of Agriculture and Fisheries on March 11, 2022. These were actually proposed much earlier on Jan. 5 by the AgriFisheries Alliance, which is composed of the three main sectors of farmers and fisherfolk (represented by Alyansa Agrikultura), agribusiness (Philippine Chamber of Agriculture and Food, Inc.) and science and academe (Coalition for Agriculture Modernization in the Philippines).

Here is the status of each conditionality:

1. Restore the public-private antismuggling committee. A smuggling indicator by the United Nation’s Comtrade showed the discrepancy between the amounts reported by countries exporting to the Philippines and our own Bureau of Customs has more than doubled to P1.3 trillion in 2021 from P500 billion in 2019. In the two instances when the interagency committee (which reported to the president) was operational, smuggling rate was down by 25 percent and 31 percent.

Status: There is a small development because the Department of Agriculture (DA) has created a low-level committee. But for more than one year, the request by this committee to meet with the Customs Commissioner has not been fulfilled.

2. Restore the private sector monitoring of the DA budget. The Commission on Audit reported unliquidated and unexplained expenses of P21 billion to P23 billion each for the years 2020, 2021 and 2022. The amount is already one-third of the DA budget of less than P70 billion.

Status: This has not been done. Up until now, the complete list of DA-funded projects has not been given to the private sector-led Regional Agriculture and Fisheries Councils to activate their legally mandated budget monitoring task.

3. Set up the Market Information System and Network. This is also mandated in the 1997 Agriculture and Fisheries Modernization Act. The shocking fact is that we have not implemented this for the last 26 years.

Status: The DA proposed a measly P10 million for this in the 2023 budget, and a similarly measly P67 million for 2024. The latter was even reduced by half in the official submission to Congress.4. Formulate and implement a farm consolidation and cluster plan. With farms averaging less than two hectares with no economies of scale, we cannot be globally competitive.

Status: For the first time, there was a small P155-million budget in 2023. Surprisingly, this was decreased to P145 million for 2024.

5. Identify key RCEP threats and corresponding measures. Countries like Vietnam identified similar threats and succeeded when they joined the World Trade Organization (WTO). We did not, and so we consequently suffered. We must not let this happen again.

Status: We have not identified these and we also have not come up with the appropriate measures to respond to these.

6. Formulate and implement an RCEP action plan with a corresponding budget. Learning from our history, we must do this immediately so we do not repeat our deplorable experience with the WTO.

Status: This plan has not been submitted. Potential RCEP threats will occur and once again, agriculture will suffer more than ever.

The Senate has done a commendable job in identifying the key agriculture conditionalities. Unfortunately, these are largely unfulfilled.

The Senate must now take the next step in motivating the Executive to fulfill these prerequisites. To highlight: the RCEP ratification document states that the Senate “may recommend withdrawal from the Agreement.” Our agriculture industry is tired of always being left behind.