Opening up borders | Inquirer Opinion
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Opening up borders

/ 12:22 AM March 09, 2017

US President Donald Trump has handed Asia to China. In an almost unbelievable example of stupidity, he withdrew from the Trans Pacific Partnership (TPP) agreement that was designed to bring Asia and the Pacific closer to the United States in terms of trade and investment, and handed Asia to China through the latter’s “competitive” Regional Comprehensive Economic Partnership (RCEP). The move accelerates China’s plan to become the No. 1 economy in the world. One wonders if this man has any idea at all of what he’s doing.

The RCEP includes the 10 Asean countries plus China, Japan, South Korea, India, Australia and New Zealand. It is a market for 3.5 billion people which comprises 47 percent of the world’s population and a market of economies worth $22.5 trillion, or 30 percent of the world’s economy. It does not include the United States.


The open borders between and among these countries will lead to their even more rapid growth and wealth as each takes advantage of its expertise to expand in other countries. The United States won’t be part of it, leading to America becoming a less competitive and attractive market.

The RCEP was started in 2012 and was to be finished after five years. (The TPP was unfinished seven years after negotiations began in 2010.) It deals with negotiations in trade in goods and services; investment; economic and technical cooperation; intellectual property rights; competition policy; dispute settlement; and other issues. More than a dozen negotiations have been held since its initial launch. At present, RCEP members are approaching a consensus on all the complex issues, including the services sector—one of the reasons that held back negotiations. Its conclusion is expected this year.


Finance Secretary Carlos Dominguez said the government is more open to the RCEP than the TPP as the former is in line with the Philippines’ goal of pursuing stronger connections in Asia backed by its Asean chairmanship. According to a study published in August 2016 by PIDS, or the Philippine Institute for Development Studies,  the construction sector will benefit the most because there will be higher inflows of foreign direct investments, and the transportation and machinery sector will improve along with the increase in the construction sector. Most importantly, the Philippines’ agriculture sector will improve notably, except the rice sector in which the country is just not competitive. Also to benefit are Filipinos as their expertise and hard work get appreciated and wanted throughout the region.

At some point, I believe that Japan will finally be forced to recognize that it just has to relax its immigration constraints as its lack of younger people becomes ever more critical. It will reduce poverty incidence by nearly a quarter by 2023, or an estimated 3 million Filipino families or roughly 15 million Filipinos (using Social Weather Stations’ recent poll) that will have jobs they otherwise wouldn’t have. Textiles will suffer once again (as it did in the early 1980s), although garments may grow.  Electronics equipment may also initially suffer, but

later recover. It is estimated to raise the Philippines’ GDP by 10-15 percent.

The Philippines is also moving into a free trade agreement (FTA) with the European Union that will cover most aspects of trade and investment. The European Union is the Philippines’ fourth largest trading partner, and the Philippines is its sixth largest trading partner. The FTA covers some 500 million people with a joint GDP of $18.5 trillion. It will cover a wide range of issues—trade in goods; sanitary and phytosanitary measures; services and investment; intellectual property rights; competition; trade and sustainable development; dispute settlement; and energy and raw materials.

These two agreements will bind the Philippines closer to Asia and to Europe. It will help solidify the higher levels of growth that the Philippines has recently been achieving—now not far from 7 percent.

Trump America is the loser.

E-mail: [email protected] Read my previous columns:

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