Not participating in RCEP will affect the economy

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COMMERCE Secretary Ramon Lopez reiterated on Thursday that non-participation or late participation in the Regional Comprehensive and Economic Partnership (RCEP) agreement would be detrimental to the Philippine economy.

“We cannot afford to delay or not participate in this free trade agreement when all of our Southeast Asian neighbors are already reaping the benefits of the agreement. Our non-participation or delayed participation to RCEP would be detrimental to the Philippine economy because the trade, investment and other economic opportunities that RCEP can bring will be diverted to other economies,” Lopez said at the general assembly of members of the Management Association of the Philippines.

RCEP covers 2.3 billion people, or about 30% of the world’s population, and is expected to contribute $25.8 trillion, or about 30% of global gross domestic product (GDP).

Specific provisions of the agreement covering trade in goods, including rules of origin; customs procedures and trade facilitation; sanitary and phytosanitary measures; standards, technical regulations and conformity assessment procedures; and trade remedies.

To date, only Indonesia and the Philippines have not yet completed their national ratification procedures.

Lopez warned that as other countries in the region enjoy preferential treatment through better market access, wider supply of raw materials and strengthened and transparent trading systems, the existing ties of Philippines with the global value chain could deteriorate as investors and companies look to other countries for a better economic environment and opportunities.

“Even our exports could become less competitive as intermediate goods used as inputs for subsequent production and manufacturing become more expensive relative to our competitors,” he said.

Lopez pointed out that for the Philippines, RCEP will result in a net gain in total trade balance of up to $128.2 million, increase overall welfare by $541.2 million, contribute to real GDP growth of 1.93% and a reduction in the incidence of poverty of 3.62%. by 2031.

“As the world struggles to recover from the negative impact of the Covid-19 pandemic as well as the ongoing Russia-Ukraine crisis, RCEP presents a unique opportunity for the country and the region to rebuild the economies of the parties of the RCEP,” Lopez said.


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