Trade and Industry Secretary Ramon M. Lopez joined the Trade Ministers from the Member States of the Association of Southeast Asian Nations (ASEAN) and its five trade partners—Australia, China, Japan, Korea, and New Zealand—in signing the historic mega trade deal Regional Comprehensive Economic Partnership (RCEP) Agreement, which he said will deepen the Philippines economic relations with member countries.
Today’s historic signing, held during the 4th RCEP Leaders’ Summit held via Video Conference, was witnessed by respective Heads of States.
For the Philippines, Foreign Secretary Teodoro Locsin Jr. stood in for President Rodrigo Roa Duterte, who had to visit the typhoon and flood damaged areas in Cagayan and Camarines Sur.
According to Lopez, the signing of the RCEP Agreement is not only a milestone for ASEAN but a welcome development for the Philippines as the agreement is in line with the country’s initiatives and reforms in building a more robust and conducive investment and business environment, especially as the country addresses the impact of the COVID 19 pandemic and works towards its recovery.
“The RCEP will further broaden the Philippines’ economic engagements with its trading partners through improved trade and investment, enhanced transparency, integrated regional supply chains, and strengthened economic cooperation,” Lopez declared.
The ASEAN member states include Brunei Darrusalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Viet Nam.
“This agreement will also complement ongoing programs and policies to make the country a manufacturing and investment hub in the region,” the trade chief added.
Launched in November 2012, the RCEP Agreement is a modern, comprehensive, high- quality, and mutually beneficial economic partnership agreement. It includes not only the usual areas of trade in goods and services, investment, and economic cooperation, but also emerging trade areas such as intellectual property, electronic commerce, government procurement, and competition.
A chapter dedicated to support Micro, Small, and Medium Enterprises (MSME) development is also a key feature of the RCEP Agreement, and is expected to facilitate the integration of MSMEs into the global value chain.
“This RCEP Agreement will be a catalyst for the country’s economic development as it provides not only enhanced market access for Philippine key products—such as garments, automotive parts, and agricultural products like canned food and preserved fruits—but also a platform for more investments in the country in vital sectors such as manufacturing, research and development, financial services, game development, E- commerce, and the IT-BPO sector,” said lead negotiator Assistant Secretary Allan Gepty.
Lopez clarified, however, that while the wider free trade agreement improves levels of market access among RCEP Participating Countries, it still provides flexibilities, through the exclusion list, for the Philippines’ sensitive products, which are mostly agricultural products.
Asec. Gepty further explained that the Philippines stands to benefit from a wider cumulation area and advanced trade facilitation arrangement. Skilled Filipino professionals and businesspersons will likewise gain from easier entry in the RCEP countries.
With the implementation of the agreement, Sec. Lopez said, “RCEP will bring job opportunities for the Filipinos in the country as it facilitates inclusive and open regional economic policies, especially for MSMEs, who can take advantage of the increasing globalization and creation of new supply chain linkages. In addition, it opens up more services that can be provided by Filipinos or Filipino companies in the RCEP participating countries.”
In 2019, the RCEP Participating Countries accounted for 50% of Philippine export market, and 61% of Philippine import sources. The region accounts for 11.4% of foreign direct investments entering the Philippines in the same period.
“We would also like to acknowledge the assistance of the agencies involved in the negotiations for helping clear this historic free trade deal with the National Economic and Development Authority (NEDA) Board Cabinet Committee on Trade and Related Matters,” the trade chief added.
“As a historic free trade deal, RCEP has been cleared by the National Economic and Development Authority (NEDA) Board Cabinet Committee on Trade and Related Matters with the assistance of the agencies involved in the negotiations,” the trade chief added.
The Agreement will be implemented once ratified by the six ASEAN Member States and three of its Dialogue Partners. Once in place, RCEP will enable faster growth in the region, which now account for 28.2% of global GDP—amounting to USD23.9 trillion; 27.8% of the world’s trade valued at USD10.5 trillion; 23.6% of global inward FDI2 and 33.5% of global outward FDI3; and 29.7% of the world’s total population. While India opted out from RCEP in 2019, the agreement remains open for its participation.