Reject RCEP – CPDG

May 30, 2022

Photo Credits: People Over Profit

The Council for People’s Development and Governance, a national network of non-government organizations and people’s organizations, calls on the Philippine government and particularly the Senate to not ratify the Regional Comprehensive Economic Partnership (RCEP) Agreement.

1. The RCEP is the latest of at least 10 regional and bilateral free trade agreements (FTAs), aside from expansive World Trade Organization (WTO) agreements, that the Philippines has concluded since the 1990s. All these agreements have promised that trade and investment liberalization and other regulatory changes would increase foreign investment in the country, boost trade, create jobs and reduce poverty. They have increased foreign investment and trade but have not resolved joblessness and poverty.

  • Even when their disruptive effects on domestic agriculture and industry were clear, the argument has been that without these deals we would be left behind. And yet after some three decades we do remain left behind and worse off.
  • As IBON Foundation points out, the share of agriculture in the economy has fallen to its lowest in the country’s history and of manufacturing to its smallest in seven decades at 9.2% of gross domestic product (GDP) in 2019 and 18.6% in 2020, respectively. The marginal improvement in 2021 is only because the government’s lockdowns made the service sector collapse even more. The Philippines has become a service economy more than a producing economy causing record unemployment, labor export, and trade deficits.

2. The Philippines is bizarrely seeking to liberalize further at a time that globalization has slowed worldwide because of their proven adverse effects on domestic economies and development. Protectionism has been growing since the 2008 global financial and economic crisis even among the advanced global capitalist powers.

  • This includes not just China, the biggest economy and biggest beneficiary of RCEP, but also the United States (US), United Kingdom (UK), European Union (EU), and other industrialized countries. Even underdeveloped countries like India, Indonesia, Brazil, and others are implementing protectionist measures. India for instance pulled out of RCEP to protect its farm sector.
  • Trade barriers are going up, investment regulations increasing, and investment treaties are being terminated around the world because of the adverse effects of globalization such as in the Philippines. And yet we still hear the same clichéd arguments of 1990s globalization proponents that have been proven false by our own experience.

3. The Philippines is already very liberalized with its fellow ASEAN members and only barely protected against China, Japan, and South Korea among other RCEP countries. Lowering tariffs any more will further frustrate the country’s prospects of developing its agriculture and own industries.

  • On the other hand, the Philippines have barely anything to gain from other RCEP economies opening up because of our backward and historically shriveled agricultural and industrial sectors. The biggest gainers will not be small farmers and enterprises who are uncompetitive from decades of government neglect but the handful of foreign transnational corporations with segments of their global value chains in low value-added enclave special economic zones and perhaps a few large corporate Filipino exporters and agri-business firms.
  • The RCEP will further weaken the country’s agriculture sector and further impoverish small Filipino farmers and fishermen. Other RCEP countries developed their agricultural sectors with decades of protection, support and subsidies to their farmers and fishermen – not so in the Philippines.
  • Millions of Filipino farmers and fishermen and their families will be driven to greater poverty and hunger, and the country will become more food insecure. Cheap agricultural imports from China will flood the Philippine market and drive down farm prices of Filipino farmers’ produce. The supposed tariff safeguards during so-called import surges under RCEP are small comfort for their strict requirements and, in any case, the Philippines has proven to be conservative in using safeguard measures for lack of the technical infrastructure needed for this.
  • The Magsasaka at Syentipiko Para sa Pag-unlad ng Agrikultura (MASIPAG) criticized RCEP’s provision removing non-tariff trade barriers such as sanitary and phytosanitary clearances on agricultural imports during harvest periods. This will encourage the deluge of cheap imports and cripple the livelihood of millions of farmers.
  • MASIPAG also warns that the country’s genetic diversity will erode, and that corporate domination of the seed sector will strengthen. The privatization of our genetic treasures will intensify, and Filipino farmers asserting their right to save, exchange and improve seeds will be criminalized.
  • RCEP will also allow foreign investors to more easily control or maybe even purchase large tracts of farmlands, mountain ranges and riversides which are key geographic areas for sustainable organic agriculture. This will frustrate further prospects for genuine agrarian reform.
  • The Federation of Free Farmers (FFF) points out that tariffs on raw tuna imports will be removed. This will threaten the livelihood of thousands of Filipino fishermen and small-scale fishing enterprises.

Filipinos have already suffered much from the poverty and inequality wrought by decades of one-sided FTAs and investment agreements. We call on our legislators to take a more critical and unjaundiced view of our experience with them. We also ask you not to be swayed by empty promises nor the pseudo-scientific forecasts of economic models which are unable to capture real world conditions.

We call on our legislators to reject RCEP and, if anything, to review our existing trade and investment agreements for their real impact on the economy. This will be of immense help in crafting policies to develop agriculture and industrialize the country to deliver equitable and broad-based benefits, moreover in ways that protect our environment and natural resources.

(The Council for People’s Development and Governance is a national network of more than 60 national, regional, and provincial CSOs and People’s Organizations based in the Philippines. It serves as a platform for engagement among development partners to achieve development effectiveness and democratic governance towards a genuinely sustainable people-centered economic development.)