EDITOR’S DESK

The Philippines is about to join the Regional Comprehensive Economic Partnership (RCEP), a mega trade deal among the 10-ASEAN countries and trading partners Japan, China, South Korea, and Australia-New Zealand.

But its ratification at the Senate is facing strong opposition from farmers and other non-governmental organizations. A total of 51 agriculture groups – composed of farmers, fishers, and producers – have signed a petition urging Senators to reject RCEP.

The groups think the deal will result in further “import surges, price depressions, and displacement of local production.” This strong opposition from various groups should make our policy shapers rethink of what has become of our trade deals. This time, what’s wrong with RCEP? In my opinion, there is nothing wrong with forging free trade deals per se. We need all the ties to be able to push our goals and RCEP is one of the trade tools that could ensure we achieve our economic agenda to the fullest.

RCEP is the latest among the many FTA deals that the Philippines is planning to forge ahead. This also comes to mind previous FTAs the country had forged with other countries.

We started with the ASEAN Free Trade Area (AFTA), established in 1992, for all the 10-ASEAN member countries. Then the World Trade Organization (WTO), the forerunner of liberalized global trading regime, began life on Jan. 1, 1995. On a bilateral basis, the Philippines has completed two FTAs with Japan and the European Free Trade Association (EFTA). Forthcoming is the one with South Korea.

What has happened since these FTAs were forged? When the Philippines ratified WTO and AFTA, we were the early birds. We drastically reduced our tariff rates much ahead of other countries.

When our first bilateral FTA with Japan was forged, we were so eager that we gave up most of our tariff protection, even if we did not get what we wanted from Japan. Our tropical fruits are still restricted entry. We got some Japanese investments, but they were a pittance compared to what they poured in other ASEAN countries.

Of course, the government trumpeted the supposed gains and will be benefiting from these trade deals. The Department of Trade and Industry sounded like a broken record, “This is a must. We cannot be left behind.” Indeed, trade has expanded. But truth to tell, the Philippines trade deficit further widened. Our growth in exports could hardly make a dent on the growth of our imports.

With zero tariff on most products, the market has been inundated with cheap imports. It has discouraged domestic manufacturing expansion as domestic industries can no longer compete with the more efficient manufacturing regime of other countries. The Philippines has become import dependent more than ever.

Worse, the government cannot protect local manufacturers from dumped products or surges in imports because the so-called rules-based trading regime is not in our favor. Even decisions at the WTO level cannot be enforced. Remember the case of our decade-long cigarette tax issue against Thailand? We are given the run-around in a battle fought in Geneva.

Even initial efforts to stem import surges at our own local government agency level are already hard to crack.

In the meantime, our farmers are suffering. We have not extricated ourselves from rice imports. Our fish importation continues to widen.

While I, for one, am all for open and liberalized trading regime, this cannot just come without safeguarding first our domestic industries. The government said there are safeguards and preferential treatment to developing economies. Granted these safety nets are real, then they must not be working for trading partners whose tiny voices are muted amid roars of those with the upper hand. But it could our fault, too, because we are left with no bargaining chips as we have committed more than we can chew.

If I can recall properly, Japan closed its doors to the world for decades after it lost in the war. It concentrated on building industries. They opened to the world only when they were ready to prove their might not with their samurais, but with their industrial products.

If it is really a must to join all these FTA deals, then we must. By all means, we should ratify RCEP. But let us not forget that the rules do not apply at the international level, not even at the WTO, the supposed champion of fair level playing field.

As such, we must make sure we can enforce our rules at our own level. If we think, we have been taken for a ride by a trading partner then our local rules must be solid enough to protect our own.

We have been the Mr. Nice and Ms. Congeniality in an unfair game. Thailand has long dribbled the ball to be called for traveling. Japan has shown disinterest for a general review of the JPEPA because it has already gained an upper hand in our bilateral trade deal.

That’s why there is wisdom to a certain extent the doubts and calls from the farmers’ side to stop the ratification process of RCEP. The opposition wants a clear exit mechanism from these FTA deals if ever we find them unfair or useless in the future.