The ratification and the eventual implementation of the Regional Comprehensive Economic Partnership (RCEP) agreement, deemed the largest free trade deal in the world, can support development goals of the micro, small and medium enterprises (MSMEs), particularly their participation into the global value chains (GCVs).

“This is the first FTA (free trade agreement) wherein there is a dedicated chapter on micro, small and medium enterprises and I think this is a milestone because this is an opportunity by which we can further and strengthen the integration of our MSMEs into the global value chain,” Trade Assistant Secretary Allan Gepty said in a webinar.

Gepty said RCEP trade facilitation provisions, such as simple and flexible certification procedures, assist MSMEs integration in the GVC.

He also cited the e-commerce chapter and the financial services annex which are expected to contribute to the digitalization of MSMEs by way of providing a platform to manage transactions, as well as access to finance.

“…Because of all these developments, it is very important that we have this stability in the financial services sector. We all know that when it comes to payment for example or even financial transactions, the same has been also revolutionized in the advent of digital banking and of course epayment for that matter. So in other words, you need stable rules when it comes to regulating these activities online,” he added.

Gepty said RCEP will encourage the entry of new players in the financial sector and will pave the way for the development of new financial products because of the stability of the regime.

“In the process, it will improve access to finance such as digital banking of MSMEs, particularly in the provinces, and an active financial sector may reduce cost of financial intermediation,” he said.

Gepty further said the agreement contains a comprehensive chapter on services including telecommunication, and investments.

These are in addition to the rules on goods such as tariffs, customs procedures, trade facilitation, sanitary and phytosanitary (SPS) measures, and trade remedies, he said.

“Stability of the telco regime will pave the way for more value-added services and investments in telecommunications. It will further enhance transparency and interconnection in the region,” he added.

Gepty said MSMEs can thus take advantage of these other value-added chapters in the RCEP agreement.

The RCEP has already entered into force for 11 participating countries –Brunei, Cambodia, Laos, Singapore, South Korea, Thailand, Vietnam, Australia, China, Japan, and New Zealand.

For the Philippines, the agreement is currently being deliberated in the Senate for concurrence as part of the domestic ratification process.

Trade Secretary Ramon Lopez was optimistic that the Senate would eventually concur on the ratification of the RCEP agreement when it resumes this year.

Business organizations including the Philippine Exporters Confederation, Inc. (PHILEXPORT), industry associations and foreign chambers have joined the urgent call for the immediate Senate concurrence of RCEP, citing its advantages for the Philippines and the region.