Sponsorship Speech of Senate President Pro-Tempore on the Regional Comprehensive Economic Partnership Agreement

Sponsorship Speech of Senate President Pro Tempore Loren Legarda

Resolution Concurring in the Ratification of the
Regional Comprehensive Economic Partnership Agreement

15 February 2023

Nobyembre, taon dalawang libo at labing-isa nang ipinagtibay ng ASEAN Leaders ang ASEAN Framework for Regional Comprehensive Economic Partnership (RCEP) sa 19th ASEAN Summit sa Bali, Indonesia.

Nang sumunod na taon, ang mga pinuno ng sampung ASEAN member states, at ng anim niyang ASEAN Free Trade Agreement partners, na kinabibilangan ng Japan, China, Australia, New Zealand, South Korea, at India ay opisyal na nilunsad ang RCEP negotiations. Ito ay naganap noong November 2012 nang isinagawa ang 21st ASEAN Summit and Related Summits sa Phnom Penh, Cambodia.

Sa loob ng walong taon ginanap ang masusing negosasyon sa RCEP na pinamumunuan ng Department of Trade and Industry, dala-dala ang mga patnubay mula sa mga sector na kinunsulta.
There was a total of 28 full rounds of RCEP negotiations, eight (8) regular and ten (10) intersessional Ministerial Meetings that were convened over a period of eight years. On top of these, there were four (4) RCEP Leaders’ Summits held, wherein at the 4th RCEP Summit on 15 November 2020, the RCEP Agreement was signed.

Ngayon – labing dalawang taon matapos nilunsad ang RCEP — tinatanong pa din natin ang ating sarili – Kailangan ba natin ito?

RCEP’s rich historical antecedents and claims on its benefits, on the other hand, begs the question, Why not?

I will be the first to argue, however, that the number of years spent in one’s study or negotiation of international instruments, such as the RCEP, does not define the quality of a treaty.

What defines a good treaty for each participating country are its principles and goals that are given life through informed and carefully weighed commitments, and vigorous capacity-building measures and safeguards to address the peculiar circumstances of each participating member economy, including their respective economic sectors that are struggling to deal with various forms of barriers that inhibit growth – barriers that hinder their participation in cross-border trade and global value chains.

I have carefully weighed the risks of RCEP vis-à-vis the benefits that it will bring to our people.

Let me underscore the following:

• Based on 2020 data, the RCEP free trade area accounts for 29% of the world’s trade, 29% of world’s GDP, 33% of global inward Foreign Direct Investments (FDI), 47% of global outward FDI, and 2.3 billion population (29% of the world’s population). Can we afford to dismiss the opportunities offered by this regional market?

• The very sensitive agricultural products are excluded from our tariff commitments in RCEP. In fact, under RCEP, more agricultural tariff lines were excluded from tariff commitments compared to our commitments under the ASEAN Trade in Goods Agreement (ATIGA) and the ASEAN+1 FTAs.

Under RCEP, the Philippines only offered 33 agricultural tariff lines covering 15 products for further liberalization specifically for Australia, New Zealand, China, and South Korea compared to the existing ASEAN +1 Free Trade Agreements. This is only equivalent to 1.9% of the total agricultural tariff lines.

• The global and regional markets are already open, and trade has been liberalized. We already have bilateral trade agreements, and ASEAN Free Trade Agreements. Whether we concur with the ratification of RCEP or not, the world has already evolved into a global marketplace, with pockets of regional markets. RCEP is essentially a step towards ensuring that a rules-based, transparent, and conducive business environment is promoted to ensure sustainable and inclusive economic growth. Why would we not want to be a part of this?

• RCEP offers better market access for key Philippine products such as preserved pineapples, coconut juice, papaya, durian in China, Korea, and Japan. It offers additional guaranteed market access for services in Australia, China, Japan, Korea, and New Zealand. Many of our production sectors need more markets and they are clamoring for it.

• RCEP offers enhanced and stable rules to encourage investments and presents opportunities for our professionals and service providers in the RCEP region.

• RCEP offers opportunities for economic and technical cooperation in order to boost our competitiveness and build our comparative advantage in sectors with the greatest strength.

Hindi po bulag ang Senado sa mga hinaing ng hanay ng mga magsasaka. Ako po ay nakikiisa sa inyong mga hinaing kung kaya’t sa aking pag sponsor ng RCEP ay naghahain din ako ng malakas na panawagan para maipatupad ang mga sumusunod na alituntunin sa pagpapaganap ng RCEP:

Una, sa ating mga namamahala sa Department of Agriculture, Department of Trade and Industry, Department of Science and Technology, Department of Budget and Management, Department of Agrarian Reform, Tariff Commission, Intellectual Property Office, National Economic and Development Authority, at iba pang ahensiya ng gobyerno — matutong makinig sa mga magsasaka at iba pang sektor ng ekonomiya. Promote inclusiveness not just as an end-goal, but also by the way we will achieve our goals.

Matuto po kayong makipag-usap sa inyong pinagsisilbihan. Buhayin ang mga Anti-smuggling Committee, Public-Private Agriculture Budget Monitoring Committee, at iba pang mga committees na magbibigay-daan sa isang tunay at patuloy na dayalogo at pakikipagtulungan sa hanay ng gobyerno at mga sektor ng produksyon.

We need to strengthen public-private cooperation through joint consultative and monitoring mechanisms. This will enhance accountability, promote mutual learning, encourage best practices, and harness trust.

Ikalawa, itaguyod ang transparency sa lahat ng kalakaran. If we want to optimize the benefits of global and regional trading systems offered not just by RCEP, but by other multilateral and bilateral trading systems, we need to make transparency among the cornerstones of transactions in government and with our trading partners. Share information that will allow our sectors to grow and be informed of the vast opportunities in the domestic, regional, and global marketplace. Gamitin ang datos para mapalaganap ang kahusayan sa produksiyon.

Ikatlo, reform and improve our programs. Makipagsangguni sa mga sektor na layunin nating matulungan. Sino ba ang mas nakakaalam kung anong programa ang nararapat kundi ang mga sektor na nais nating tulungan?

Set targets and timeframes for our programs that are responsive to the needs of our farmers, small businesses, and other production sectors. Dapat lamang po na may due date ang lahat ng pinapangakong programa. Wala pong forever at bawal ang walang katapusang paghihintay sa mga ipinangakong tulong sa ating mga farmers at mga sektor na nangangailangan ng tulong.

Better MSME and agricultural sector access to finance, technical and infrastructure support, creating competitiveness in our sectors, harnessing the power of digital infrastructure and technologies, strengthening supply chain connectivity, promoting a productive and efficient workforce, accelerating green growth, building resilient businesses, just to name a few, should be addressed by our programs.

We cannot be competitive based on promised assistance to our ailing sectors. We need concrete action to be delivered fast. Remember, the Philippine Congress appropriates resources to serve specific purposes. Make sure these are well-spent, and within the timeframe you committed to deliver them. Our state of competitiveness will define how much more opportunities we can turn into success stories in RCEP.

The services sector is an example of such success story. The Philippines is a net service exporter with consistent trade surpluses from 2012 to 2020 with an all-time high of USD 13.08 Billion in 2020.

Ika-apat, we need to create comparative advantages for our economic sectors. It all boils down to finding our niche and seizing opportunities, and defining our role in the regional and global marketplace.

Dapat po natin linangin ang oportunidad na naghihintay sa larangan ng trade in services para sa ating mga manggagawa at mga negosyante. Trade in services is a growing key interest of the Philippines, evident in its fast-paced growth recorded from 2012 to 2020. With a compounded annual growth rate of 5.5%, the country’s services exports have brought in an average of USD 30.6 Billion every year.

Ika-lima, at pinakaimportante sa lahat, patatagin at pag-ibayuhin ang governance. Dahil dito ay kalakip ng Resolusyon na aming isinusulong ang pagtatayo ng Oversight Committee on RCEP implementation para masubaybayan at siguraduhin na ang mga pinangakong tulong para sa sector ng agrikultura, kasama na ang paglalaan ng budget at tulong pinansiyal at teknikal sa ating mga magsasaka ay matupad.

In this light, we will:
• Provide funding, but also demand deliverables;
• Exact accountabilities, but be fair;
• Pursue structural reforms, as necessary;
• Ensure that our MSMEs are supported so they can take advantage of the opportunities in the RCEP; and
• Require stronger public-private cooperation and partnership.

We will support initiatives to strengthen country representation in the global and regional stage to achieve the greatest outcomes for our people in various global and regional trade arrangements.

The RCEP has given all of us an opportunity to underscore the value of public-private-academe dialogue. It raised an opportunity for us to remind our executive departments to heed the call of innovation so we are not left behind.

Republic Act (RA) No. 11293 otherwise known as the “Philippine Innovation Act” was signed into law on April 17, 2019. Nearly four years hence, we have yet to realize a whole-of-government collaboration that removes fragmentation in the country’s innovation governance. I call on NEDA, DTI, DA, the IPO, and the private sector to take advantage of the policy mechanisms under the Philippine Innovation Act.

Hindi lang po pamahalaan ang inaasahan nating kumilos upang ang sektor ng magsasaka at mangingisda ay matulungan. May mga sektor na tiyak nating makikinabang kung kaya’t hindi lamang isang beses kundi tatlo sa nakaraang taon hinikayat tayo ng industriya at mga propesyonal na ratipikahan na ito. Kaya nananawagan ako sa kanila. Sabay-sabay nating iangat ang sektor na nagpapakain sa atin. Isasama ko sila sa pagbuo ng mekanismo para matiyak ang mga hakbang na kailangan para hindi na ulit maramdaman ng magsasaka na naisahan na naman sila.

One example is a legal fund or a commitment to legal representation for when the commitments are not met or for when provisions of law are not complied with or mandates are not fulfilled. Another is to help them bridge capacity, innovate to produce the raw materials you need, assist with financial management. There are many ways to make sure what we know to be imperative for the success of this venture will happen.

Conclusion

To my colleagues, fellow workers in government, and to the public we serve, my decision to lend support to the ratification of RCEP is premised on my conviction that an open, transparent, and predictable trade and investment environment generates new opportunities for everyone.

The RCEP Agreement — the instrument that binds us with the other participating countries — will help us achieve the right conditions to expand our markets for goods and services, create more jobs, build opportunities to strengthen the various economic sectors in ways that will make them more competitive, and more importantly, assist our MSMEs in participating in cross-border trade, as well as in regional value chains.

RCEP will help us deepen engagement, not just with other participating countries, but more so, among various economic sectors in our society and with the government.

We cannot stand in isolation as we face this huge wave of global and regional economic integration. We need to build capacities and efficiencies to achieve competitiveness.

Our benchmark for efficiencies and productivity should be leveled against the best in the world and in the region. We should not see RCEP as a mere agreement for setting rules for regulating trade and trade-related activities. RCEP, as in other global and regional trading agreements, will help our economic sectors to push their performance. This will benefit our consumers.

The end goal, however, is for the various areas of production to find a niche that will allow them to be a part of the global and regional value chain.

Aking hiling na ang mga alituntunin na aking binanggit kanina ay tanggapin bilang parte ng resolusyon na ating ipapasa. Ang mga ito ay binuo matapos ang konsultasyon natin sa mga iba’t ibang sektor.

My colleagues, I invite all of you to join me in supporting and concurring in the ratification of the RCEP Agreement.