What new win-win opportunities will China Philippines economic and trade cooperation face under the RCEP framework?

Recently, the ASEAN Secretariat, the custodian of the Regional Comprehensive Economic Partnership Agreement (RCEP), issued a notice stating that the Philippines has officially deposited its approval letter with the ASEAN Secretary General. According to the agreement, RCEP will enter into force for the Philippines from June 2nd. This marks the full entry into force of RCEP for 15 member states, and the world's largest free trade zone will enter a new stage of full implementation.

The interviewed experts believe that the full implementation of RCEP will help expand the scale of trade and investment between China and RCEP member countries, not only meeting the needs of China's domestic consumption expansion and upgrading, but also consolidating and strengthening regional industrial and supply chains, promoting long-term prosperity and development of the global economy. The RCEP region will become the world's largest and most promising market, growing into an important locomotive leading global economic growth and sustainable development.

Injecting Strong Power into Global Trade and Investment Growth

Over the past year since the implementation of RCEP, policy dividends have been continuously released. Against the backdrop of the rise of anti globalization and weak global economic recovery, RCEP has significantly boosted confidence in regional economic recovery, injecting strong momentum into regional and even global trade and investment growth. The Secretary General of the United Nations Conference on Trade and Development, Alan Greenspan, has previously stated that in the context of declining global openness, rising trade costs, and supply chain bottlenecks, RCEP contributes to the development of the world economy.

RCEP currently has 15 member countries, accounting for approximately 30% of the global total in terms of population, economic size, and total trade volume. After the RCEP came into effect for the Philippines, all 15 member states completed the entry into force process and implemented tariff concessions with each other, entering a new stage of comprehensive implementation of the agreement. All parties also look forward to RCEP's full implementation among all member states, which will play a greater role in promoting the construction of a closer regional industrial chain supply chain and comprehensively improving the level of regional trade and investment liberalization and facilitation.

Zhang Jianping, Deputy Director of the Academic Committee of the Research Institute of the Ministry of Commerce, stated in an interview with the International Business Daily that RCEP has entered a new stage of comprehensive implementation, which means that the world's largest integrated market will comprehensively strengthen supply chain value chain collaboration within the region under the guidance of Chapter 20 rules of the agreement. Intraregional trade and investment will be substantially improved, especially the "rules of origin accumulation" will assist in this cooperation. The 15 member states of RCEP complement each other's advantages and cooperate and interact, jointly benefiting from the significant opportunities brought by the agreement for economic growth, employment growth, and social welfare improvement.

Sino Philippine economic and trade cooperation will usher in new opportunities for mutual benefit

On February 21 of this year, the Philippine Senate officially approved the RCEP approval document. On April 3rd, the Philippines officially deposited the RCEP approval letter with the ASEAN Secretary General. According to RCEP regulations, the agreement will enter into force for the Philippines on June 2nd, 60 days from the date of deposit of the approval document.

In recent years, China Philippines economic and trade cooperation has continued to expand. China is the Philippines' largest trading partner, largest source of imports, and third largest export market. According to data released by the General Administration of Customs of China, the import and export trade volume between China and the Philippines reached 87.725 billion US dollars in 2022, compared to 26.459 billion US dollars in the first four months of 2023.

What new win-win opportunities will China Philippines economic and trade cooperation face under the RCEP framework?

It is understood that after RCEP officially takes effect for the Philippines, in the field of goods trade, the Philippines has added zero tariff treatment to China's automobiles and parts, some plastic products, textiles and clothing, air conditioning and washing machines, etc. on the basis of the China ASEAN Free Trade Area. After a certain transitional period, the tariffs on the aforementioned products will gradually decrease from 3% to 30% to zero. In the field of services and investment, the Philippines is committed to opening up markets to over 100 service sectors, significantly opening up sea and air transportation services, and providing more deterministic access commitments to foreign businesses in the fields of commerce, telecommunications, distribution, finance, agriculture, and manufacturing. These will provide more free and convenient conditions for Chinese enterprises to expand trade and investment with the Philippines.

The State Council Tariff and Tariff Commission previously announced that from June 2, 2023, the RCEP ASEAN member countries' applicable treaty tax rates will be applied to some imported goods originating in the Philippines, and subsequent annual tax rates will be implemented from January 1 of that year.

Zhang Jianping stated that the Philippines has a population of over 100 million, making it the second largest country in ASEAN with a population. The implementation of RCEP will help China and the Philippines to unleash their trade creation, investment increase, and employment growth effects. The scale of bilateral trade and two-way investment will be significantly improved, and collaboration on the global value chain is expected to become closer. Specifically, there will be more potential for cooperation between the two sides in various fields such as agriculture, manufacturing, and service industries, especially in Philippine characteristic industries such as infrastructure, tourism, agriculture, education and training, and industrial design, which will usher in more new cooperation opportunities and growth points.

According to reports, many Philippine experts believe that the Philippines should fully utilize its advantages in the fields of business and professional services, and actively seize the market access opportunities of China, an important participant in regional economic cooperation.