RCEP Trade Ministers Set to Conclude World’s Mega Trade Deal

MANILA—Trade Secretary Ramon Lopez reported that the recent meeting of the trade ministers of the Regional Comprehensive Economic Partnership (RCEP) participating countries resolved almost all remaining outstanding issues of the trade deal.

During the virtual 8th RCEP Intersessional Ministerial Meeting (8th RCEP MM) held on 27 August 2020, the trade ministers of the Association of Southeast Asian Nations (ASEAN) and its five partners—namely, Australia, China, Japan, New Zealand, and South Korea—, advanced significantly the negotiation, which paves the way to its signing in November 2020.

“While there were many challenges along the way, we kept our focus on the value and importance of RCEP and the merit of fostering regional cooperation,” Sec. Lopez said.

He added: “The conclusion of RCEP negotiation is a good symbol that notwithstanding the current pandemic, many great things can be accomplished, such as the affirmation of an international rules-based system for trade and investment in the region.”

Launched in November 2012, RCEP is an initiative by ASEAN to encourage trade among its member states and its Free Trade Agreement (FTA) partners. Without India, RCEP accounts for 30% of the world’s global population at 2.2 billion and 28.2% of the global GDP at a combined USD23.9 trillion, much larger than other regional trading blocs.

The bloc would also account for 27.8% of the total trade at USD10.5 trillion, with USD5.5 trillion in exports and USD4.9 trillion in imports, and contribute to 23.6% of global inward foreign direct investment (FDI) and 33.5% of global outward (FDI).

“With RCEP, enhanced market access for trade and investment will be established. This means that the Philippines can improve its export competitiveness in key products—such as garments, automotive parts, and agricultural products like canned food and preserved fruits—while encouraging more investments in the country in vital sectors such as research and development, financial services, game development, and IT-BPO,” said lead negotiator Assistant Secretary Allan Gepty.

Sec. Lopez added: “RCEP is a major milestone for the region and its partners, and is definitely more comprehensive than any FTA of ASEAN.”

Notwithstanding the significant progress of the negotiations, the trade ministers remained open to the participation of India in RCEP.

Meanwhile, the Trade Secretary also cited that the momentous trade deal, poised to be signed by November this year, will have major impact on jobs for the Filipino people and the enhanced participation of MSMEs in the global value chain.

“We are optimistic for the future of the country as we are set to conclude a historic milestone, especially in this time of crisis and the region’s post-pandemic recovery,” Sec. Lopez said.

PH Exports Grow by 5.1% in Q3 2019

MAKATI – Amidst the backdrop of global uncertainty stemming from the US-China trade war, Philippine exports of goods and services remained resilient, as it expanded by 5.1% year-on-year (yoy) to US$ 25.0 billion in the 3rd quarter (Q3) of 2019. This export growth was even an improvement compared to its second quarter (Q2) 2019 yoy rate of 4.3%.

"President Rodrigo Duterte's directive of being a friend to all nations allowed the Philippines to grow our exports despite the ongoing US-China trade war, which may have caused the decline in exports of other countries." said Trade Secretary Ramon Lopez.

Sec. Lopez also said that the Philippines is pushing for the conclusion of free trade agreements like the Regional Comprehensive Economic Partnership (RCEP) and the Philippine-Korea Free Trade Agreement in 2020 to expand market access for manufactured goods as well as agri-based products.

He shared that the Philippines is also working on a free trade agreement with the United Arab Emirates (UAE) and is exploring new export markets in consumer-rich Africa. The trade chief advised that export marketing should be in tandem with increasing the supply to meet the demand of foreign markets.

The Q3 export growth performance was strengthened by an 8.6% yoy increase in services exports, which totaled US$ 11.1 billion for the quarter. It was also backed by the 2.4% yoy uptick in the goods exports valued at US$ 13.9 billion.

Growth in services exports was boosted by a double-digit increase in exports of travel services due to bigger international tourist arrivals. Aside from travel services, Information Technology and Business Process Management (IT-BPM) also contributed to the services exports’ good showing.

On the other hand, exports of electronics products, bananas, and forestry and mineral products contributed to the moderate increase in the exports of goods.

Goods and services’ exports climbed 3.7% yoy to US$ 70.4 billion on a cumulative basis spanning January to September 2019. Services exports rose by 7.7% yoy to US$ 30.6 billion driven by travel services as well as technical, trade-related, and other business services. Meanwhile, goods exports increased by 0.7% yoy to US$ 39.8 billion primarily because of fruits and vegetables.

Industry Policy Determines Trade Strategy – DTI Chief

MAKATI – Department of Trade and Industry (DTI) Secretary Ramon Lopez said that industry policy determines trade strategy and shared DTI’s unified approach to spurring trade and investments in DTI’s One Country, One Voice (OCOV) forum last 4 December.

“Essentially, the objective is to develop and strengthen our industries that will generate local employment. Our positions in trade negotiations have to be aligned with our plans in industry development,” Sec. Lopez said.

“What industry do we think will be strategic? What industry should be developed? Where do we have comparative advantage? Then we will put our minds, our support and our programs behind all these industries which we will be promoting” he added.

The trade chief also stressed the importance of trade agreements, since 93% of all exports go to countries with existing agreements with the Philippines.

“President Rodrigo Duterte’s independent foreign policy allowed the Philippines to pursue trade relations with both US and China and helped begin trade relations with non-traditional partners, like Russia and some countries in the Middle East. The Department of Trade and Industry is doing its part to assure that the Philippines is a friend to all,” said Secretary Lopez.

However, he added that trade relations should be fair to both countries: “We, the Philippines, are decent trading partners. We follow the rules and we expect partners to also treat us fairly. Otherwise, we will have no choice but to retaliate—but again still following the rules and procedures for negotiation.”

The Philippines has seven free trade agreements, two bilateral agreements, and 30 existing Joint Economic Cooperation agreements, and is benefiting from Generalized System of Preferences (GSPs) from 10 countries, namely US, EU, Australia, Belarus, Canada, Japan, Kazakhstan, New Zealand, Russia, and Turkey.

Ambassador Ron Sorini, Former Chief Negotiator for the Office of the US Trade Representative (USTR), said that for the US, the only serious candidate for free trade agreement negotiations is the Philippines. Amb. Sorini gave a talk on the topic “Identifying the Policy Environment for New Generation FTAs in the New Era of Globalization.”

Undersecretary Ceferino Rodolfo explained DTI’s “Last Touch Strategy” with the vision for the Philippines to become a strategic manufacturing and export base. This strategy aims to integrate the Philippines into the regional value chain production networks and provide the country with the greatest local value addition and best market access for its products.

To reap the maximum benefits from this strategy, Usec. Rodolfo added that the country must first ensure deep industrial capability in basic industries and have the widest network of supplying industries.

The OCOV forum informed stakeholders about the latest developments in the country’s international trade and investment engagements and revolved around three topics: Philippine development and trade policy; rising global protectionism; and forging ahead through strategic economic partnerships.

The forum’s speakers include Senators Imee Marcos and Koko Pimentel, Albay Congressman Joey Salceda, Former DTI Secretary Gregory Domingo, DTI Assistant Secretary Allan Gepty, Former USTR Director Kellie Meiman Hock, Solar Philippines President Leandro Leviste, Luen Thai Executive Vice President Sunny Tan, former National Competitiveness Council Co-chair Guillermo Luz, and Ambassador Antonio Basilio.

Mega Trade Deal in the Final Stages

BANGKOK — The sixteen (16) Ministers of the Regional Comprehensive Economic Partnership (RCEP) participating countries from the 10 members states of ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Viet Nam) together with its Free Trade Area (FTA) Partners from Australia, China, India, Japan, Korea and New Zealand gathered on 8th of September 2019 in Bangkok, Thailand for the 7th RCEP Ministerial Meeting.

According to Philippine Trade Secretary Ramon M. Lopez, the RCEP Ministers expressed their collective determination to conclude the negotiations this year and recognized that the parties have reached a critical milestone as the conclusion of negotiations draws near. The Ministers mandated the negotiating teams to finish the last pending items on market access as well as a couple of issues on rules before the end of the month.

The 3rd RCEP Leaders’ Summit, to be attended by the Presidents and Prime Ministers, is scheduled at the sidelines of the ASEAN Summit in early November 2019, where the conclusion of the RCEP is set to be announced.

To ensure that the agreement will be concluded, the Ministers committed to exert utmost flexibility, and provide appropriate resources for the negotiations.

In today’s growing global economic uncertainty and trade frictions, the conclusion of the RCEP would help bring back the confidence to the international trading system and help ensure a more stable environment in trade and investment.

The agreement will also help level the playing field and help contribute in building a free and fair market in the region.

“For the Philippines, this agreement is envisaged to achieve greater market access for goods, services, and investments, and provide a business friendly and trade facilitative rules for businesses and investors.” Lopez said.

The final round of negotiation is scheduled on September 19-28, 2019 in Danang, Vietnam.

Read the 7th RCEP MM Joint Media Statement here: https://asean.org/storage/2019/09/RCEPMM7-03-RCEP-MM-7-Joint-Media-Statement-FINAL.pdf 

DRIVERS OF MSME DEVELOPMENT

Thai Prime Minister Prayut Chan-o-cha met Department of Trade and Industry (DTI) Secretary Ramon Lopez and other ASEAN Economic Ministers (AEM) prior to the opening of the 51st AEM Meeting and Related Meetings in Bangkok on 6 September 2019. The Prime Minister encouraged ASEAN countries to support micro, small, and medium enterprises (MSMEs) by teaching technological and digital know-how and encouraging innovation – the same strategies that President Rodrigo Duterte and DTI implement. The Prime Minister also underscored the importance helping SMEs level up their businesses. In the Philippines, DTI continues its effort in upgrading MSMEs and ensuring they are at the front and center of its economic agenda through various public and private partnerships. DTI implements the 7Ms framework (Mindset Change, Mastery, Mentoring, Money, Machine, Market Access and Models of Negosyo), a holistic approach of the government that would develop smarter entrepreneurs for poverty reduction.

PCAB Contractors Can Now Pay Licensing and Registration Fees Online

The Department of Trade and Industry- Construction Industry Authority of the Philippines (DTI-CIAP) and the Landbank of the Philippines entered into a Memorandum of Agreement (MoA) on 12 February 2018 to provide fast and efficient alternative payment collection services to CIAP clients such as PCAB contractors.

Since end of April 2018, contractors can directly transact with the Landbank Payment gateway for online payment of monetary obligations to CIAP-PCAB, i.e., payment of fees and charges relative to licensing and registration application, among others.

The Landbank Link.BizPortal is an alternative channel that offers a safer and more convenient means to pay government fees anytime, anywhere. It will allow contractors to pay licensing and registration fees and charges assessed by CIAP-PCAB online or manually; with the following transaction charges:

Payment Source/Option	Transaction Fee	Remarks
LANDBANK ATM Cards/Visa  Debit Cards	P10.00*
BancNet Member-Bank’s ATM/ Debit Cards	P20.00*
Globe GCash	P20.00* P30.00*	for transactions up to P999 for transactions P1,000 and above

*per transaction

As of now, the following of bancnet member banks are being accepted for Landbank E-payment: Asia United Bank; BPI Direct BanKo; CTBC Bank; Citystate Savings Bank; DBP; Enterprise Bank; Entrepreneur Bank; Equicom Savings Bank; MASS SPECC; Malayan Bank; PBCom; Phil Postal Savings Bank; Philtrust Bank; Sterling Bank of Asia; Sun Savings Bank; and Tianong Rural Bank.

For more information, contractors may visit CIAP’s website at www.ciap.dti.gov.ph.

Ease of Doing Business and Efficient Government Service Delivery Act: A Gamechanger, Says DTI

The Department of Trade and Industry expressed optimism that the newly-enacted Ease of Doing Business and Efficient Government Service Delivery Act of 2018 will make doing business in our country easier as it promotes efficient government.

“Under the EODB/Efficient Government Act, businesses can expect streamlined processes, reduced processing times from all government agencies, including government-owned and controlled corporations (GOCCs).  Government agencies shall be made to comply with the prescribed processing time: three (3) working days for simple transactions, seven (7) working days for complex transactions, and 20 working days for highly technical transactions.” DTI Secretary Ramon Lopez said.

The EODB-EGSDA Act, which amended the Anti-Red Tape Act of 2007, requires all local government units to streamline procedures for the issuance of business permits, clearance and other type of authorizations by implementing unified business application form. LGUs are mandated to setup Business One Stop Shop (BOSS) to facilitate business permits application.  The law also provides that barangay clearances and permits must be issued at the city or municipality to speed up transactions.

Apart from streamlining, the law also provides for the creation of a Central Business Portal that will receive and capture application data on business-related transactions, while Philippine Business Databank shall provide LGUs and national government agencies access to information to verify validity and existence of businesses. With this, businesses are not required to submit the same documentary requirement previously submitted.

The DTI Secretary, who now chairs the Ease of Doing Business and Anti Red Tape Advisory Council (EODB/ARTAC) called RA 11032 a landmark legislation that will have a direct impact on all citizens and business sector.

“We realized that for the EODB reforms to be fully implemented and integrated, a whole-of-government approach was necessary. Thus in full support of the President’s vision, Congress enacted a law that will make doing business in the Philippines easier and more importantly, create a more efficient government.” Lopez added.

The EODB-EGSDA law will be implemented by the Anti-Red Tape Authority, an agency under the Office of the President that will monitor compliance of agencies, and implement and oversee national policy on anti-red tape and ease of doing business. The seven-member Ease of Doing Business and Anti-Red Tape Advisory Council will be composed of the Secretaries of DILG, DICT, and DOF, and two members from the private sector. The EODB/ARTAC will serve as the policy and advisory body of ARTA, to be chaired by DTI Secretary, and the Director General of the Anti Red Tape Authority (ARTA) as Vice Chair.

DTI Supports Coastal Communities Through International Food Expo

THE Department of Trade and Industry through its Center for International Trade Expositions and Missions (CITEM) featured the ‘best of the seas’ as it welcomed buyers for the 12th International Food Exhibition Philippines (IFEX) 2018 on May 25 to May 27 2018 at the World Trade Center and Philippine Trade Training Center in Pasay City.

“Marking its return as an annual event, IFEX Philippines 2018 will highlight the country’s finest seafood to fulfill the growing global demand for marine product and coastal cuisines,” said DTI Trade and Investment Promotion Group Undersecretary and CITEM Officer-in-Charge Nora K. Terrado.

Participated in by over 450 Philippine micro, small, and medium-sized enterprises (MSMEs) including those from coastal communities from Northern Luzon and Mindanao, the trade show is composed of four major exhibition halls: Food Philippines Hall, International Hall, Food Artisans Hall, and the Marketplace.

 “This is also our way of supporting the promotion of agribusiness sector in the country that provides employment opportunities especially in the regions,” added Terrado.

Among the municipalities joining the said trade show is the General Santos City, the Tuna Capital of the Philippines.  Local companies will showcase their world‐class tuna varieties, including skipjack, yellowfin, bluefin, and bigeye tuna, in different packaging options during the three-day show.

“General Santos City is home to one of the world’s best‐tasting tuna catches available to the international and local market and we wanted to highlight this as we position the Philippines as a go‐to sourcing destination for high‐quality tuna and tuna‐like species,” said Terrado.

As of 2016, the city’s tuna industry generates 65 percent of the country's over-all tuna catch and employs around 200,000 workers.

According to Southeast Asian Fisheries Development Center (SEAFDEC), the Philippines is top three tuna producer in the world in terms of volume. Eighty (80) percent of Philippines seafood is exported to the United States and the European Union, with a value of approximately US $120 million export earnings per year.

“The Philippines is also currently ranked as the second largest manufacturer of canned and processed tuna in Asia, after Thailand, with a majority of this catch landed in the port of General Santos City,” said Terrado.

SEAFDEC data also showed that tuna is the Philippines’ top export fish commodity valued at PHP19.6 billion pesos in 2014, making up 35 percent of the country’s total fishery export.

IFEX Philippines 2018 is the country’s biggest international trade exhibition on the Philippines’ and Asia's ethnic and specialty food, tropical fruits, vegetables, seafood, beverages, bakery and confectionery products, meat and poultry, Halal-certified products, as well as natural, organic, and healthy food products.

To streamline export deals, DTI-CITEM opened its ‘IFEX Connect’ program, a customized platform for integrated business-to-business (B2B) matching services to help buyers identify and screen potential business partners among the exhibitors, in collaboration with DTI’s Export Marketing Bureau (EMB).

“We expect a more upbeat exchange of trade deals, sealing of partnerships and knowledge transfer through our B2B activities and learning seminars,” said Terrado.

In its previous four editions in 2011 to 2017, IFEX Philippines has already welcomed nearly 6,600 international and local buyers across the world: 1,270 in 2011, 1,259 in 2013, 1,976 in 2015 and 2,092 in 2017—increasing at an average of 14 percent over the past four editions.

From 2009 to 2017, the top 10 countries where these buyers came from are the United States, Japan, Singapore, China, United Arab Emirates, South Korea, Malaysia, Australia, Taiwan and Canada, respectively.

The 12th edition of IFEX is organized by the DTI-CITEM in close partnership with Department of Agriculture (DA), through the Bureau of Fisheries and Aquatic Resources (BFAR) and the Agribusiness and Marketing Assistance Service (AMAS).

*This is Press Release

PH, US open discussions to strengthen trade and investment ties, exploratory talks on possible FTA

Department of Trade and Industry (DTI) Secretary Ramon M. Lopez met with Deputy United States Trade Representative (USTR) Jeffrey D. Gerrish and his delegation to further trade and investment ties and continue with the exploratory discussions for a possible free trade agreement (FTA) between the Philippines (PH) and the United States (US). The two countries agreed that an FTA would be a win for both countries, as both acknowledge there are already opportunities under the current Trade and Investment Framework Agreement (TIFA) that both teams can work on to facilitate immediately more trade.

This follows the meeting of President Rodrigo Roa Duterte and U.S. President Donald Trump during the 2017 ASEAN Summit and the statement of USTR Robert Lighthizer, acknowledging the need to strengthen bilateral relations with countries in the Asia Pacific, including PH during a Congressional hearing last March.

“We are looking forward to exploring a free trade agreement with the U.S. Meanwhile, we can simultaneously pursue low-hanging opportunities like the existing TIFA and the privileges under the Generalized System of Preferences (GSP) of the U.S.,” said Trade Secretary Lopez.

Deputy USTR Gerrish said that “President Trump has made clear his commitment to the Indo-Pacific region, and the United States values our very important trade relationship with the Philippines,” and that “greater engagement on trade and investment will benefit both countries.”

PH currently enjoys preferential duty-free entry to the US through its GSP scheme. In 2017, GSP exports accounts for 17.6% of PH exports to the US, valued at US$ 1.492 billion. Leading GSP exports include tires, sugar, electronics, and fruit and vegetable juices. The GSP was also recently renewed to be effective for three years, instead of the annual review.

The renewed GSP also extended the duty-free treatment to travel goods such as suitcases; vanity and attaché cases; handbags; backpacks; travel, sports and similar bags and cases. The DTI wishes to use this momentum to add footwear to the GSP list. This, in turn, will promote Filipino-made shoes and to encourage foreign shoe manufacturers to locate in the Philippines.

DTI Undersecretary Ceferino Rodolfo likewise pointed out that under the current TIFA, both side are working on addressing policies and rules that can facilitate at once the flow of goods between the two countries, such as those governing import valuation mechanism, and clarification on tariff application on certain goods.

DTI Undersecretary Nora K. Terrado also noted the PH creative industry is benefitting from being excluded from the USTR Special 301 Watch List, a list of countries with deficient intellectual property protections, for the 5th straight year. Usec. Terrado also said that the DTI is planning a trade roadshow in the US to promote PH products.

*This is Press Release