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Position paper on the Regional Comprehensive Economic Partnership (RCEP) trade agreement

10:07 AM December 01, 2021

We – the undersigned representatives of farmers, fishers, workers, civil society organizations and the private sector – unanimously oppose the ratification of the Regional Comprehensive Economic Partnership (RCEP) trade agreement and urge the Senate to withhold its concurrence on the treaty.

The RCEP agreement, including its legal text and schedule of Philippine commitments, was finalized without consulting agri-fisheries stakeholders, many of whom are directly affected by the treaty’s trade rules and concessions. Moreover, no more opportunity exists today to modify our commitments or the legal text of the agreement.

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We have not seen any clear and consistent basis for classifying agricultural tariff lines in the country’s schedule of tariff concessions. Joining RCEP now means that 75% of our 1,718 agricultural tariff lines will be set at zero. About 15% of tariff lines will be subjected to tariff reduction, while 9% will be exempted from any tariff change. A more detailed breakdown and evaluation of our obligations are necessary to ensure that no mistakes have been made, and that sufficient policy space remains to protect sensitive commodities.

More worrisome are proposed RCEP rules that will significantly hamper the application and effectiveness of trade remedies. These measures, such as safeguard duties, will be the only legal recourse to address import surges and other problems engendered by freer trade under RCEP. Any form of quantitative restriction (QR) – like suspending sanitary and phytosanitary (SPS) import clearances during harvest periods – is strongly discouraged by RCEP and is also prohibited by our Rice Tariffication Law (RTL), although World Trade Organization (WTO) rules allow for temporary QR imposition under certain critical situations.

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RCEP limits the allowable safeguard duty to the difference between a country’s applied most favored nation (MFN) tariff at any point during RCEP implementation and the RCEP tariff in effect when the safeguard remedy is invoked. For example, if the applied MFN tariff for a product is 35%, and our tariff commitment under RCEP is down to 25% when an import surge occurs, we can only impose a safeguard duty not exceeding 10%. Hence, sensitive products like rice, corn, and some fishery and livestock products – to be exempted from any tariff reduction under RCEP – might ironically be deprived of any safeguard protection, since their tariff at any time during RCEP implementation could already equal their applied MFN tariff.

This is a big departure from WTO rules, which permit the levying of any remedial duty necessary to prevent or rectify serious injury to a particular sector. Additionally, imports from least developed countries (LDCs) – such as Myanmar, Cambodia and possibly Vietnam – cannot be subjected to safeguard duties under RCEP rules. No such exemption exists under WTO rules.

We question the rosy projections on benefits from RCEP membership, and the purported losses if we stay outside the trade bloc come January 2022. We have heard such claims before, starting with the General Agreement on Tariffs and Trade (GATT)-Uruguay Round Agreement and the various regional and bilateral trade agreements that followed. We still have to see evidence that these optimistic forecasts have materialized. Performance data instead show a continuing deterioration in our terms of trade – minimal increases in exports, no expansion beyond traditional commodities, ballooning imports, and widening trade deficits. Nor is there any indication that our prospects will improve under RCEP. We therefore deem the claims regarding benefits from RCEP membership as overly presumptive, highly misleading and manifestly deceptive.

Not content with their imbalanced and exaggerated prognostications, some RCEP advocates are warning the Senate that “we will be left behind” should we fail to join RCEP by year end, although it is uncertain that the RCEP bus will actually bring us to our desired destination.

The agri-fisheries sector has generally not benefited from business opportunities arising from free trade agreements, while our competitors have increasingly dislodged us from export markets with superior and cheaper products. In turn, our entry into these trade pacts has forced us to open up our economy, even as we have failed to prepare for trade threats – resulting in import surges, price depressions, and displacement of local production.

We will never gain from RCEP and similar arrangements unless we establish, fund and implement dedicated and sustained programs to boost the competitiveness and profitability of our farmers, fishers, traders, processors and exporters. It is also nonsensical to push for RCEP membership when the benefits from this “good agreement” are essentially theoretical or imagined, whereas its dangers are real and proven by previous experience.

There is no urgency in joining RCEP today. We can always join later, when we have adequately understood the treaty’s ramifications and are ready to use RCEP membership to our advantage. Trade is not a race of countries to a finish line. Ultimately, trade is only a means to elevate people’s lives. Governments must thus exercise care and deliberation, so that trade agreements deliver on their promises, while minimizing harm to vulnerable sectors of society.

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Meanwhile, our bilateral and regional free trade agreements with all RCEP member- countries will remain in force. We will still enjoy trade opportunities available outside RCEP. We can continue negotiating with our Free Trade Agreement (FTA) partners to secure additional advantages that are comparable to those contained in RCEP on the basis of equality, reciprocity, mutual benefit and national interest.

In the past, the bullish predictions of free traders and their dire warnings about non-accession swayed Congress to concur with almost every trade agreement. We hope the Senate will not give the Executive another free pass, considering that the benefits of liberalized trade have generally not been realized.

We therefore call upon the Senate to reject RCEP and withhold its concurrence.

Let the Senators also send to the Executive a strong and unequivocal message to observe the constitutional mandate on stakeholders’ right to effective consultation and to thoroughly review the country’s commitments under RCEP, before asking the Senate to entertain further proposals on trade liberalization.

RAUL Q. MONTEMAYOR
National Manager, Federation of Free Farmers
Signed on Behalf of the Organizations and Their Representatives Listed below:

1) Nicanor Briones, President, Agricultural Sector Alliance of the Philippines, Inc.
2) Ernesto Ordonez, Chairman, Alyansa Agrikultura
3) Rafael Mariano, Chairperson, Anakpawis Party-List
4) Eduardo Landayan, President, Aniban ng mga Magsasaka. Mangingisda at Manggagawa sa Agrikultura
5) Rene Cruz, National President, Aniban ng mga Manggagawa sa Agrikultura
6) Cecile Chavez-Custodio, Chairperson, BUTIL Farmers Party
7) Romeo Royandoyan, Executive Director, Centro Saka, Inc. (Philippine Center for Rural Development Studies)
8) Charles R. Avila, Executive Director and Spokesperson, Confederation of Coconut Farmers Organizations of the Philippines
9) Mars Mendoza, Executive Director, Fair Trade Alliance
10) Rafael P. Sarucam. National President, Federation of Coconut Farmers and Farm Workers Associations, Inc.
11) Ramon Canastre, Jr., Chairman, Federation of Free Farmers Cooperatives
12) Jose Sonny Matula, President, Federation of Free Workers
13) Joseph Purugganan, Head of Philippine Office, Focus on the Global South
14) Rene Ofreneo, President, Freedom from Debt Coalition
15) Arze Glipo, Executive Director, Integrated Rural Development Foundation
16) David T. Santos, Chief Executive Officer, Ka Tribu ug ang Lasang Foundation
17) Antony Marzan, Executive Director, Kaisahan Tungo sa Kaunlaran ng Kanayunan at Repormang Pansakahan, Inc.
18) Romulo Tapayan, Secretary-General, Kalipunan ng mga Maliliit na Magniniyog ng Pilipinas
19) Edith P. Azores, Chairperson, KAMMPIL AGRICOOP
20) Trinidad Domingo, Chairperson, Katipunan ng Bagong Pilipina
21) Danny Carranza, Secretary General, Kilusan para sa Repormang Agraryo at Katarungang Panlipunan
22) Danilo Ramos, Chairperson, Kilusang Magbubukid ng Pilipinas
23) Argel Joseph Cabatbat, Congressman, MÀGSASAKA Party-List
24) Roland de la Cruz, President, National Congress of Unions in the Sugar Industry of the Philippines
25) Chester Warren Tan, Chairman and President, National Federation of Hog Farmers, Inc.
26) Aurea M. Teves, President and Convenor, National Food Coalition
27) Rodolfo M. Capoquian, President, National Trade Union Center-Philippines
28) Ruth Novales, Vice-President, Nestle Philippines
29) Pablo Rosales, Pangulo, Pagkakaisa ng mga Samahan ng Mangingisda
30) Manuel Rosario, Secretary General, Pambansang Katipunan ng mga
Samahan sa Kanayunan
31) Herminio Agsaluna. National President, Pambansang Kilusan ng mga
Samahang Magsasaka
32) Luz M. Bador, President, Pambansang Koalisyon ng Kababaihan sa Kanayunan
33) Eduardo Mora, Chairperson, Pambansang Kaisahan ng mga Magbubukid sa Pilipinas
34) Aurea Miclat-Teves, Executive Director, People’s Development Institute
35) Alvira C. Reyes, President, Philippine Coffee Alliance, Inc.
36) Roger Navarro, President, Philippine Maize Federation
37) Marlon Palomo, Executive Director, Philippine Rural Reconstruction Movement
38) Joji Co, President, Philippine Confederation of Grains Associations
39) Rolando Tambago, President, Pork Producers Federation of the Philippines, Inc.
40) Hazel Tanchuling, Executive Director, Rice Watch Action Network
41) Rosendo So (President)/Jayson Cainglet (Executive Director), Samahang Industriya ng Agrikultura
42) Josua Mata, Secretary-General, Sentro ng mga Nagkakaisa at
Progresibong Manggagawa
43) Mario Descallar (President)/Jesus las Marias (Chief, Media Relations), SRI Pilipinas
44) Dinna Umengan, Executive Director, Tambuyog Development Center
45) Ana Maria Nemenzo, Co-Convenor, Trade Justice Pilipinas
46) Norberto Chingcuanco, Co-Convenor, Tugon Kabuhayan
47) Elias Jose M. Inciong, President, United Broiler Raisers Association

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TAGS: position paper, Regional Comprehensive Economic Partnership (RCEP), trade agreement
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