FINDING ANSWERS
The Senate and the general public were “fed with false promises, bloated projections and misleading claims” on the supposed benefits of the Regional Comprehensive Economic Partnership (RCEP) trade agreement.
Thus, the Senate ought to “reject, or at the very least defer any decision on, the RCEP,” according to an open letter issued by representatives of farmers, fishers, workers, civil society organizations and the private sector.
A copy of the letter – titled “Better to miss than be run over by the RCEP bus” and signed by Federation of Free Farmers (FFF) national manager Raul Montemayor in behalf of 71 mass organizations – was emailed to me recently by my good friend, former Agriculture Secretary Leonie Montemayor.
The FFF noted that after three Senate hearings on RCEP late last year, Sen. Koko Pimentel, chairman of the Senate committee on international trade, filed PS Resolution 963 on Dec. 15 endorsing the proposal for the Senate to concur with the RCEP treaty.
“Intriguingly, the resolution only names 18 government agencies which endorsed RCEP during the Senate hearings, but made absolutely no mention of the serious reservations, if not outright objections, of almost all the private stakeholders who participated in the consultations,” the FFF pointed out. “There also seems to be no Committee Report detailing the results of the hearings.”
Fearing that Pimentel’s endorsement of RCEP might be “tabled soon for plenary discussion with the objective of securing the go-signal for joining the trade pact before the 18th Congress adjourns on Feb. 4, 2022 to give way to the national elections,” the FFF warned it will be “foolhardy” for the Senate to give its imprimatur.
Excerpts from the open letter are as follows: “While the country may have gained some concessions which are better than those under existing free trade agreements (FTAs) with RCEP countries, these involve a very small percentage of total agricultural tariff lines and trade value. Moreover, many of the purported gains are insignificant. For instance, the Japanese offer to drop tariffs on chocolates to zero applies to a single and obscure tariff line for "other" chocolates, which we most probably do not export. Likewise, we need to wait 20 years before China’s tariff on our canned pineapples becomes zero, even as the current tariff is already very low at five percent.
“RCEP proponents have conveniently downplayed, if not deliberately concealed, one crucial caveat about the agreement — that any tariff concession from our trading partners under RCEP will not be exclusive to the Philippines, and will actually be available to all other member countries. There is therefore no assurance, and only a small chance, that we can take advantage of these trade opportunities inasmuch as other RCEP countries are way ahead of us in terms of competitiveness, efficiency and dependability. Moreover, while RCEP may provide more incentives for foreign investors to come to the Philippines, they can just as easily decide to place their money in other countries where the environment for doing business is more attractive.
“There has been a conscious effort to belittle the potential damage of RCEP and other trade agreements to many sectors in our economy, particularly agriculture. Yet, these concerns are real and validated by experience. To cite a few: Almost all our tariffs on fishery, dairy, cacao and tobacco products will drop to zero on the very first year of RCEP. Import duties on high fructose corn syrup and other substitutes to our cane sugar will also be eliminated. Our farmers in the Cordilleras and other areas will face a deluge of cheap vegetables from China. All this, with our local producers left with little or no protection because of stringent RCEP rules on the use of additional tariff safeguards during import surges.
“RCEP will actually perpetuate, if not aggravate, the adverse impacts of these threats especially because of the non-implementation of laws and programs that were promised in the past and intended to improve the resiliency and competitiveness of our vulnerable sectors. To make matters worse, our government has gone on an import spree while unilaterally cutting tariff rates for sensitive products like rice and pork (and perhaps soon, corn and sugar), without getting any trade concession in return.
“We therefore urge our Senators to be skeptical about the rosy projections regarding the purported benefits from RCEP. These types of calculations are based on unrealistic assumptions and have historically been grossly off the mark. In pushing for Senate ratification of the GATT — Uruguay Round agreement in 1995, proponents promised a $3.4 billion-rise in agricultural exports, ₱60 billion increase in agricultural gross value added, 500,000 additional jobs, and improved balance of trade in agricultural products. Philippine Statistics Authority data show completely opposite results between 1995 and 2018 — $7 billion in agricultural trade deficits from a surplus in 1995, over a million jobs lost, and a halving of agriculture’s contribution to the country’s gross domestic product from over 20 percent to only 10 percent.
Email: [email protected]