Businessmen are hopeful that the newly signed RCEP will stimulate trade, investment and digital transformation among member countries.
Amb. Benedicto V. Yujuico, president of the Philippine Chamber of Commerce and Industry (PCCI), cited the timely completion of the world’s biggest free trade area agreement in helping in the economic recovery of member countries post-pandemic.
“This is also a major step in lessening the member countries’ dependence on the economies of the West, particularly at this time when President elect Biden will be preoccupied with domestic matters of the U.S. It will also diffuse security concerns caused by trade tensions between China and Japan. The RCEP will accelerate the movement of the center of the economic gravity toward the East, where it was 2000 years ago,” said Yujuico.
According to Yujuico, the major beneficiaries of RCEP are China, Japan and South Korea due to the significant lifting of tariffs between these countries and the volume of trade between them.
“Philippines can also benefit from tariff reduction to the extent of our exports to member countries but not significant because our foreign currency income is mainly from OFW remittances and BPO revenues, not merchandise exports,” he said.
PCCI Chairman Emeritus Francis Chua said the signing has long been anticipated after 8 long years of negotiations.
“It is beneficial for the third of global population, which accounts for 29 percent of global GDP,” said Chua.
“Coming out at this final phase of pandemic, this is a most welcome news,” he said. With five big economies under RCEP, Chua said, it will further enhance the attractiveness of ASEAN.
“RCEP is the turning point in global trade, an important trade agreement in modern history,” he said.
READ: https://mb.com.ph/2020/11/15/ph-sees-deeper-economic-relations-with-rcep-members/
Trade and Industry Secretary Ramon Lopez, who signed the mega trade deal along with 14 other trade ministers on Sunday, said the conclusion and signing of the RCEP Agreement in this time of pandemic and global uncertainties will signal a renewed vow in a rules-based system for trade and investment.
“While countries are severely affected by the pandemic and with trade measures focused towards recovery, it is important that we remain resolved in building a wider free trade area in the region that gives stability, predictability, and confidence to investors and businesses,” Lopez added.
“We need to sustain the spirit of entrepreneurship that notwithstanding the health challenges, economic activities must continue. This RCEP Agreement is a testament that the economy should keep going,” the trade chief further explained.
“The RCEP Agreement covers emerging areas in trade such as intellectual property, electronic commerce, government procurement, and competition, which are important in building a more conducive and stable economic environment not only for the Philippines but the whole region,” said lead trade negotiator Assistant Secretary Allan Gepty.
Once implemented, the RCEP Agreement will improve export competitiveness of the Philippines' key products of interests, such as agricultural products, automotive parts, and garments. It will also provide wider cumulation for certain products such as canned tuna and preserved fruits.
RCEP also provides a platform to encourage more investments and service providers in vital sectors such as manufacturing, creative sectors, financial services, research and development, IT-BPO, and energy, among others.
Lopez reiterated that the landmark agreement offers wider market opportunities for the country’s exporters and services providers, with RCEP Participating Countries accounting for more than 50% of PH export market.
“RCEP has improved levels of market access among each other but still provides flexibilities for the Philippines' sensitive products, which are mostly agricultural products, through the exclusion list,” the Trade Secretary said.
“With the country’s commitment under RCEP, investors are assured that their entry and stay in the Philippines can be facilitated, and that their businesses and investments will enjoy not only stability in terms of government policies but also fair and equitable treatment,” Gepty added.
For Micro, Small, and Medium Enterprises (MSMEs), the signing of the RCEP Agreement is a milestone as it provides a specific chapter in the agreement dedicated to the institutionalization of support and cooperation geared towards inclusive growth. MSMEs account for 99.5% of businesses in the Philippines, and provide employment to 63% of the country’s labor force.
Other benefits expected from RCEP include simplified and business friendly customs procedure for trade, time-bound consultations for resolving issues and concerns on trade measures, enhanced cooperation on e-commerce, and stronger protection and enforcement of intellectual property rights.
Launched in November 2012, the RCEP Agreement accounts 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 FDI and 33.5% of global outward FDI; and 29.7% of the world's total population.