Regional trade deal takes effect; safeguards in place vs. possible spike in imports

Metro Manila (CNN Philippines, June 2) — The government assured local industries that measures are in place against potential surges in imports under a regional trade deal that takes effect on Friday.

The Philippines is “all set” for the implementation of as the Regional Comprehensive Economic Partnership (RCEP), Trade Assistant Secretary Allan Gepty said in a news briefing.

RCEP is a mega-trade pact among 15 economies in the Asia-Pacific region: the 10 members of the Association of Southeast Asian Nations, and Australia, China, Japan, New Zealand, and South Korea.

It is designed to eliminate tariffs — or the taxes imposed on imported products — on 90% of goods among the signatories within 20 years.

EXPLAINER: What is RCEP? Will PH benefit from it?

To ease the concerns of stakeholders, Trade Secretary Alfredo Pascual said the agency has prepared a system that can help them monitor an “unwarranted” surge in competing import products.

Pascual said this would allow the government to launch interventions to make sure that the RCEP will not hurt local producers.

Gepty said the monitoring system is “more proactive” than the previous ones as it presents specific tariff lines.

Asked about how the system can detect when the volumes of imports have started affecting local sectors, officials could not provide figures or threshold.

Gepty just said that the system would monitor “sharp” or “sudden” increases in imports. From there, an analysis would be made to determine if the heavy volumes of imports pose threats to local producers. If the analysis shows that there is already an impact, a trade remedy can be sought.

“Safeguard tariff lang ‘yun kapag merong nasasagasaang local producer,” he said.

[Translation: We can impose a safeguard tariff if local producers are already affected.]

Aside from the monitoring system, Gepty said the government will hold an annual international trade forum, as he noted that the main challenge is making stakeholders understand how to do business in the region.

He said the forum would be an avenue for businesses and industry players to consult officials, air their issues, and expand their knowledge on trade.

Benefits of RCEP

Trade officials reiterated that RCEP would put the Philippine economy in a better position since this would also provide a boost to the operations of micro-, small-, and medium-sized enterprises.

“Our participation in RCEP forms a crucial part of the Marcos administration's goal of boosting economic recovery and expansion. And one of the ways to reach that goal is to expand our free trade agreement network,” Pascual said.

Pascual said the administration is committed to supporting businesses in becoming more productive and competitive in the global value chain network.

Presenting RCEP’s benefits, Gepty said it provides better market access for key products in China, Korea, and Japan. Improved market access for services is also expected in Australia, China, Japan, Korea, and New Zealand.

Philippine exports will also enjoy zero or lower import tariffs for products such as processed foods, garments, and some agricultural products. Local manufacturers would also see wider sourcing of raw materials.

On earlier statements from the agriculture sector rejecting RCEP, Pascual said the traditional farming communities like rice and corn would not be affected.