Exporters and small and medium enterprises (SMEs) should be ready to seize the opportunities emerging from the forging of the Regional Comprehensive Economic Partnership (RCEP), according to a Department of Trade and Industry (DTI) official.
Allan B. Gepty, DTI assistant secretary for international trade policy and trade negotiation, said in a recent online forum that the RCEP signing last November 15 will mean tariff elimination and enhanced market access for Philippine goods to the RCEP region.
RCEP is a free trade agreement (FTA) between the 10 ASEAN member states and five of ASEAN’s external partners, namely, Australia, China, Japan, South Korea and New Zealand.
The deal is one of the world’s biggest FTAs in history, representing nearly 30% of the world’s population, 28% of global GDP, and 28% of total global trade.
Gepty said that as an RCEP member, the Philippines has been able to secure improved tariff concessions for many of its export products in, for example, the markets of China, Japan and South Korea.
In China, there will be better tariff rates for Philippine products like preserved pineapples, pineapple juice, coconut juice, diesel oil, self-adhesive paper, and printed paper, among others.
In Japan, good market access has been gained for products like fish fillet, pineapple, coffee, canned salmon, chocolate, mixture of preserved fruits, prepared/preserved oyster and mussels, leather gloves, and footwear.
Opportunities in the Korean market are open for several Filipino export products including dried/salted tilapia, cheddar cheese, fresh papaya, fresh durian, soya bean oil, canned tuna, and garments and bicycles.
To illustrate enhanced market access, Gepty said that preserved pineapple, currently being imposed a 5% tariff rate in China under the ASEAN-China FTA, will have zero tariff under RCEP.
Chocolates entering Japan are applied a 21.3% tariff rate under the ASEAN-Japan Comprehensive Economic Partnership (AJCEP) and the Philippines-Japan Economic Partnership Agreement (PJEPA). But this will be slashed to zero tariff under RCEP.
Moreover, pineapple juice has a 29.8% tariff rate under AJCEP and 7.5% under PJEPA, which will fall to zero tariff under the RCEP deal.
And in the South Korean market, fresh papaya and beer, for instance, will have zero tariff rate as compared to 24% and 15% currently imposed under the ASEAN-Korea FTA.
Gepty encourages SMEs to look at these opportunities and explore the big market in the RCEP region. “These products are something that our MSMEs should consider because… there’s now an opportunity in this market.”
The Philippines has a strong leather industry and with the good market for leathergoods in Japan, “I hope our manufacturers, our MSMEs will level up and try to manufacture more leathergoods and export the same to Japan,” he said.
He added that farmers stand to benefit too by processing products like preserved pineapples, pineapple juice and coconut juice for export to these markets.
There is also a good market in both Japan and South Korea for high-end coffee and chocolate products just waiting to be tapped.
Gepty encouraged small businesses to see RCEP as presenting a bigger market for their products, and likened RCEP to an infrastructure, much like a highway or a flyover, that needs to be utilized in order to reap its benefits.