EDITORIAL: We Must Get Ready For RCEP
The Regional Cooperation for Economic Partnership (RCEP) is definitely coming after the senate passed it. What is its economic effect on us?
That is the serious question that each one must ask.
RCEP is the largest free trade agreement that we are joining. It has Australia, Brunei Darussalam, Cambodia, China, Japan, Laos, New Zealand, Singapore, Thailand, Vietnam, Korea, Malaysia, and Indonesia – potential rivals or contributors to our economic rebound after the pandemic.
According to the legislative debates, the Philippines can benefit and can take the advantage of more foreign investors coming in, create more job opportunities, and curb our unemployment and poverty rates. Like our membership to the World Trade Organization (WTO), there are pronounced benefits for us.
As usual, economists have advertised the RCEP agreement as a strategy to further liberalize trade in goods and services that will help the member countries in terms of exports and will enhance investment policies. It will be good for farmers and producers to have access to cheaper farm inputs such as fertilizers, pesticides, and machinery. It will likewise open more export markets for our agricultural products.
However, looking back on our experience with the WTO, we encountered problems in terms of our capacity to engage with our global trading partners. In fact, it led us to enact laws to protect our agricultural sector from collapse from the heat of market competition. Hence, we had the Rice Tarification Law (RTL), and the Rice Competitiveness Enhancement Fund (RCEF).
There are issues to consider in joining the competition. Are we ready and prepared for it? Do we have the capacity to engage our competitors in terms of exports? Or, are going to profit from foreign imports? Who will benefit and who will suffer from the liberalized trade? What is, and are we aware of our comparative advantage, and distinctive competence over our export competitors? How can we compete with China, Japan, Korea, and Australia?
These are several critical sectors that we should attend to the interest of our agricultural producers, the small farmers, processors, manufacturers, and marketing intermediaries. How are we going to solve smuggling, and hoarding in the importation sector?
We have now joined the regional trade war. Our legislators have decided for us. Our business economists have silently endorsed it. Our major agricultural exporters and importers sent their protests, but they were silenced by powerful forces.
We need now marketing strategists to identify which of our products have the chance of winning in the export market, and which shall be deemed losers and therefore must be imported. In the end, the interest of the marginalized sector of our population must be protected and advanced.
We need now marketing strategists to identify which of our products have the chance of winning in the export market, and which shall be deemed losers and therefore must be imported. In the end the interest of the marginalize sector of our population must be protected and advanced.