Philippines Expands Trade Network with Two New Free Trade Agreements in 2023

MANILA: The Philippines has successfully expanded its international trade network by securing two new free trade agreements (FTAs) in 2023. These include the Regional Comprehensive Economic Partnership (RCEP) and a bilateral trade pact with South Korea. These agreements aim to reduce trade and investment barriers and enhance commercial relationships with partner countries. The RCEP agreement came into effect in the Philippines on June 2, following the Senate's approval on February 21. The agreement involves the 10 ASEAN member states and their FTA partners, which include China, Japan, South Korea, Australia, and New Zealand. The negotiations for this pact were concluded in November 2020.

According to Philippines News Agency, the RCEP is seen as a significant boost to the country's economic growth. Secretary Arsenio Balisacan emphasized the importance of being part of the RCEP, highlighting the enhanced market access it provides and placing the Philippines on equal footing with some of the world's largest economies. The RCEP countries collectively account for a third of the world’s population and economy, making it the largest FTA globally. Balisacan also addressed concerns about the influx of agricultural products, noting that tariff reductions under RCEP apply only to 15 out of 33 agricultural commodity groups.

The Department of Trade and Industry (DTI) encouraged Filipino exporters, particularly micro, small, and medium enterprises (MSMEs), to capitalize on the opportunities presented by the RCEP. DTI Secretary Alfredo Pascual described the RCEP as a modern, comprehensive, high-quality economic partnership that would enhance economic efficiency among member states and strengthen various sectors, including manufacturing, technology, agriculture, and natural resources. He also emphasized the potential for MSMEs to integrate more effectively into global value chains.

The Philippines further extended its trade horizons with the signing of a bilateral FTA with South Korea on September 7. This agreement marks the country's third bilateral trade pact, following the Philippines-Japan Economic Partnership Agreement in 2006 and the European Free Trade Association in 2016. The Philippines-South Korea FTA negotiations began in June 2019, further solidifying trade relations between Manila and Seoul.