Free trade agreements or FTAs, whether bilateral or multilateral in nature, are forged among participating nations and are aimed at expanding business opportunities. Such trade treaties determine the level of tariffs and duties that nations impose on both exports and imports, with the end in view of reducing or eliminating trade barriers altogether
Nations upon signing an FTA expect increased international trade and investments between or among them to grow. The lower cost of goods based on FTAs and higher trade and investment opportunities will eventually increase economic production, generate more employment and reduce the poverty level among the participating countries. FTAs, in short, will expand the economy, increase the government revenue base and improve the incomes of the population.
The Department of Trade, sensing that the Philippines may miss the boat, has urged the Senate to ratify the critical Regional Comprehensive Economic Partnership (RCEP) Agreement that will make the Philippines more competitive in the export market. The deal is set to take effect on January 1, 2022.
The importance of the RCEP cannot be overestimated. The RECP is a regional trade treaty that aims to eliminate 90 percent of the tariffs on imports of the participating nations within 20 years, and establish common rules for e-commerce, trade and intellectual property. Its participants are Australia, Brunei, Cambodia, China, Indonesia, Japan, South Korea, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Thailand and Vietnam. The 15 member-countries account for about 30 percent of the world’s population and 30 percent of global gross domestic product, making it the largest trading bloc in history.
The Senate ratification is crucial as failure to do so will make the Philippines sort of a pariah in the Asia-Pacific region. The regional development and economic boom will pass by the Philippines, while the rest of the region basks in progress.
Six Southeast Asian nations, excluding the Philippines, and five outside of this region have already signed the RECP. Our senators seem oblivious to the urgency of the treaty. If that is the case, they do not deserve to be re-elected or elected to a higher office.
