The newly-signed Regional Comprehensive Economic Partnership (RCEP) will benefit
the Philippines and 14 other countries who are part of the free trade agreement (FTA), a Fitch unit said in a recent report.

“We believe that over the long term, the positive impact of the trade pact will include increased market access and variety of goods and services for participants, as well as improved prospects for regional economic cooperation,” Fitch Solutions said on
Monday.

“These will far outweigh potential negatives arising from increased competition that domestic businesses would face as a result of the trade pact,” it further said.

RCEP was signed on Sunday by the 10 member-countries of the Association of Southeast Asian Nations (ASEAN) and China, Japan, South Korea, New Zealand and Australia. It is the world’s largest FTA in terms of gross domestic product (GDP).

The FTA had to wait for eight years before it was ratified or signed on Sunday by the representatives of ASEAN member-
countries and its five major trading partner as part of the latest ASEAN Summit hosted by Vietnam.

Fitch Solutions said RCEP aims to reduce tariffs and establish rules in around 20 trade areas. And while it will remove duties or tariffs on 61 percent of imports from ASEAN, Australia and New Zealand; 56 percent from China; and 49 percent from South Korea, it will “will simplify rules and procedures within a single arrangement for the many ASEAN ‘plus one’ free trade agreements (FTA) that currently exist, which should improve trade efficiency.” said Fitch Solutions.

“It would also solve the problem of Asean being saddled with complicated rules spanning multiple FTAs, which stipulate different rules for each country,” it added.

India was supposed to be part of RCEP but backed off as it feared China’s low-cost manufacturing sector might overpower its own industrial sector. Farmers in India also voiced their opposition to RCEP. CURRENTPH