Harnessing the Opportunities in Services Trade under RCEP: Perspectives from the Philippines

The Regional Comprehensive Economic Partnership (RCEP) is a forward-looking trade agreement between member economies of the Association of Southeast Asian Nations (ASEAN) and their free trade agreement (ETA) partners (AFPs), namely Australia, China, Japan, Korea, and New Zealand (i.e., non-ASEAN sig...

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Published inResearch paper series (Philippine Institute for Development Studies) no. 1; pp. I - 103
Main Authors Rivera, John Paolo R, Tullao, Tereso S
Format Journal Article
LanguageEnglish
Published Makati City Philippine Institute for Development Studies 01.01.2024
Subjects
Coronaviruses
COVID-19
Economic growth
Government purchasing
Trade agreements
New Zealand
United States > US
Asia
China
Philippines
Japan
Australia
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Summary:The Regional Comprehensive Economic Partnership (RCEP) is a forward-looking trade agreement between member economies of the Association of Southeast Asian Nations (ASEAN) and their free trade agreement (ETA) partners (AFPs), namely Australia, China, Japan, Korea, and New Zealand (i.e., non-ASEAN signatory economies). It allows participating economies to consolidate rules given overlapping sets of FTAs. Because of stalemates that developed between economies in World Trade Organization negotiations, more regional trading agreements (RTAs) have emerged. As RTAs define trade rules and commitments for all its signatories to encourage the free movement of goods and services among member economies, it can deepen economic linkages. The RCEP is an alternative avenue for trade liberalization at the regional level and a challenger to the Trans-Pacific Partnership in terms of coverage and degree of liberalization. Through RCEP, new opportunities for trade and investment may be harnessed. As a result, the enhanced partnership can contribute to human resource and infrastructure development, which are key to the economic growth and development of the Philippines. Hence, this study investigates how the RCEP can deepen the contributions of trade in services in the Philippine economy through the commitments made and limitations imposed. It reviews and assesses the specific commitments of AFPs joining the RCEP in terms of trade in services, particularly on market access and national treatment. These commitments were compared, and their relevance was evaluated to the needs of the Philippines to determine the benefits it can reap from RCEP. The analysis suggests that the RCEP is a marginal regional trading arrangement that should be viewed as a compilation of previous regional trading agreements for key economies in the Asia-Pacific region. Because of the additional commitments made by the signatory economies, specific opportunities in trade in services may be valuable for the Philippines. However, challenges exist in the form of market access and national treatment limitations, which the Philippines must view as an opportunity to enhance its domestic productivity.