The Foundation for Economic Freedom (FEF) strongly supports the immediate ratification of the Regional Comprehensive Economic Partnership Agreement (RCEP) by the Philippine Senate to strengthen the country's ties and partnerships with other nations.
“We believe that the objective of the RCEP to achieve a modern, comprehensive, high-quality, and mutually beneficial economic partnership agreement will facilitate the expansion of regional trade and investment,” the FEF said in a statement Monday, Feb. 20, 2021.
Amid the devastating impact of the COVID-19 pandemic, FEF urged a strong sense of solidarity with other nations should be displayed by capitalizing on strengthening ties and partnerships. “Thus, we urge the government to build on the country’s momentum to increase trade and investment opportunities in support of our country’s post-pandemic recovery and development by ratifying the RCEP,” the statement added.
To date, out of the 15 RCEP signatory states, only the Philippines has yet to complete its ratification process.
“Further delaying our participation in the free trade bloc means missing out on opportunities to increase trade and investments, which in turn can create opportunities that will benefit many Filipino businesses and generate jobs,” FEF said.
According to the group, RCEP offers a familiar and high-potential environment for the Philippines in terms of exports and imports. RCEP participating countries are among the Philippines’ top export destinations and import suppliers. From 2012 to 2020, the RCEP participating countries are among the Philippines’ top sources of net foreign direct investments, averaging 43 percent.
In the same period, the bulk of the country’s trade deficit was with RCEP participating countries. If the Philippines joins the agreement, RCEP can offer a market of 2.3 billion people—close to one-third of the world population.
RCEP also provides predictable and uniform rules for trade and investment. FEF Vice Chairman Romeo Bernardo noted that the RCEP’s immediate value to the Philippines lies “not in the incremental tariff reductions, which may take up to 20 years to implement, but in the promise of seamless production networks among the members who will be tied to common standards, disciplines on intellectual property, rules of origin, customs processes, e-commerce, and competition policy.”
In addition, FEF noted that RCEP can contribute to the overall growth of the Philippine economy. Joining the RCEP can increase the Philippines’ overall welfare by $541.2 million, contribute to a 1.93 percent real GDP growth, lower poverty incidence by 3.62 percent in 2030, and improve the Philippines’ trade balance by as much as $128.2 million.
RCEP’s improved commitments from participating countries can generate more employment opportunities for Filipino service providers. The opportunities include professional and management services, accounting and legal services, auditing, architecture, game development, telecommunications, and transport, the group said.
Also, crucial elements of the RCEP will complement recently enacted laws to increase investments in the country such as the Foreign Investment Act, Retail Trade Liberalization Law, and the Amended Public Service Act.
Other benefits include its single rule-of-origin framework that will help enhance and accelerate participating countries’ activities in global value chains to facilitate foreign direct investments.
“RCEP also creates a conducive environment for liberalizing services and digital transformation in areas such as e-commerce and telecommunications,” the FEF statement concluded.