Competition authority allays fears on RCEP

The Philippine Competition Commission (PCC), the country’s antitrust watchdog, allayed fears that the Regional Comprehensive Economic Partnership (RCEP) could further subject Filipino producers to unfair trade practices stressing the trade deal is the first free trade agreement (FTA) with a comprehensive stand on competition.

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PCC Commissioner Johannes Benjamin R. Bernabe stressed at the virtual press conference for the 2022 Manila Forum on Competition in Developing Countries as he cited the benefits the Philippines can get from participating in RCEP, particularly in ensuring fair level playing for member countries.

More than 70 farmer groups, producers and non-governmental organizations strongly opposed RCEP, as they blamed trade liberalization, perpetuated by FTA deals, has paved the way for the influx of imports and leaving local producers unprotected amid lack of government support.

The Senate and the House of Representatives adjourned their session Wednesday, Feb. 3 to pave the way for the start of the campaign period for the 2022 elections. Both the Senate and the House will return briefly from May 23 to June 3 prior to the sine die adjournment of the third and final session of the 18th Congress.

But Bernabe assured out that “RCEP is the first FTA which has a comprehensive stand alone chapter on competition.” With that, he said, the RCEP members consider themselves as one market that observes competition principles before the international community.

“So, it benefits all of us in the region because everyone will be competing on a level playing field,” said Bernabe.

As RCEP promotes competition, Bernabe was also looking forward to the

next generation of FTAs would be providing more competition provisions or chapters which might include provisions on subsidies to ensure that enterprises compete on a playing field where others in the region are not benefiting from state support.

“As we know the Philippines has scarce resources and not able to give subsidies or incentives as much as other countries. The RECP provides a platform for discussion and cooperation on how to ensure that level playing field by looking at this next generation type of provisions,” he said.

While RCEP opens the region to the free flow of goods and services, he said, the challenge is to ensure that the Philippines do not undertake regulations, which counter the liberalization efforts under RCEP.

The second point, he said, is that in terms of competition, the Philippines should look at geographic markets not solely within the Philippines but on a regional perspective.

This means, he explained, that if the Philippines is looking for instance, the supply of e-commerce platforms or the rapidly digitizing economies, “Philippines we may not need to confine ourselves to looking at the competition effects of e-commerce platforms solely operating in the Philippines.”

Another point Bernabe raised is in terms of ensuring that supply chains, global value chains or regional value chains that are critical to medium sized enterprises operating in the Philippines contribute to economic recovery as well as integrate itself into the global trade economy.

“I think RCEP will be critical in ensuring that those regional value chains continue to operate in a business environment that will allow for the free flow of goods and services and that will help the Philippines ride the train of economic recovery from this pandemic,” he said.

For his part, PCC Chairman Arsenio Balisacan added that RCEP opens up a broader market for Filipino producers and consumers as well as better access of member countries to the Philippine market.

With that, he said, “This should improve the competition landscape in the country. As we know and often the Philippine economy is so restrictive at the moment, then this opening up is a way forward for us to benefit from bigger opportunities out there.”

He added that the RCEP provides a platform for cooperation and contributes to competition authorities, especially in the Philippines, which has a very young competition environment.

“This additional platform provides us a better way of managing these issues with respect to the competition, including review mergers,” he concluded.