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Friday, March 29, 2024

Govt prefers to support China-led trade bloc

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The Duterte administration is more open to supporting a China-led trade bloc, after Donald Trump’s election victory dashed hopes for the US-led Trans-Pacific Partnership.

Finance Secretary Carlos Dominguez III said he was closely studying the Regional Comprehensive Economic Partnership, which was pushing for economic integration among the members of the Association of Southeast Asian Nations and major trade partners in Asia and the Pacific. 

“I personally would like to look at RCEP closely because that’s the 10 Asean countries, I think. That one, we are more open to,” said Finance Secretary Carlos Dominguez III said.

Finance Secretary Carlos Dominguez III

President Xi Jinping has endorsed RCEP for years, while US President Barack Obama was pushing for TPP which the Philippines failed to join.  Trump said he would withdraw from TPP.

RCEP is a proposed 16-nation free trade area comprising the 10 Asean member-nations”•the Philippines, Malaysia, Singapore, Brunei, Thailand, Indonesia, Laos, Cambodia, Myanmar and Vietnam”•and six trading partners such as China, South Korea, Australia, India, Japan and New Zealand.

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Trade ministers from the 16 countries comprising RCEP met on Nov. 3 and 4 in Cebu City and discussed a wide range of  issues, including the proposal to remove or drastically reduce duties on a number of goods traded across the region.   The meeting was held ahead of the Asia Pacific Economic Forum leaders summit in Lima, Peru.

Dominguez said the head of the delegation of the European Union to the Philippines also mentioned a possible free trade agreement between the EU and the Philippines “and we will look at that and give that our priority attention.” 

Dominguez said the Duterte administration would thoroughly study these proposed free trade arrangements. 

“So we have to think about [these] very carefully. We are a new administration, we want to see the pros and cons, we want to see how we will benefit,” he said. 

RCEP was conceptualized about a decade ago but was launched only in November 2012.  Its members account for almost half of the world’s population, almost 30 percent of the global gross domestic product and over a quarter of the world’s exports. 

RCEP is said to be larger than TPP,  as China’s exports of $2.3 trillion alone in 2014 were larger than the combined exports of the US ($1.6 trillion) and Canada ($474 billion), the two lead members of the TPP. 

RCEP covers  trade in goods and services, investment, economic and technical cooperation, intellectual property rights, competition policy and dispute settlement,  It excludes labor, environment and state-owned enterprises ,

Dominguez and Economic Planning Secretary Ernesto Pernia said during a state visit to China that while the Duterte administration would maintain good relations with western economies, it would now push for “stronger integration” with neighbors in the region.

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