RCEP: Giving Up Sovereignty and Development

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IBON Foundation Statement for the Regional Comprehensive Economic Partnership (RCEP) Stakeholder Consultation Interface with DTI and Key Agencies
Manila, September 4, 2017

IBON welcomes this opportunity to interact with the DTI and key agencies on their negotiations for the Philippines on the RCEP. We look forward to hearing from our country’s negotiators. We also continue to hope that the veil of secrecy over the negotiations will be lifted so that there is real, and not merely token, public participation.

Still, what we know of RCEP and the government’s economic thinking is enough to make us extremely concerned that the Philippines is giving up economic sovereignty and sacrificing development in misguided pursuit of an obsolescent neoliberalism.

Traditionally accepted principles of international law state that the sovereign powers of a nation include the power to exclude alien persons and property. Customary international law also provides for governments taking measures considered necessary to protect essential security interests and to maintain public order or the protection of public health, morals, and safety.

Surely our vital interests include economic survival, the provision of essential services, the preservation of the environment, and the well-being of our population.

Yet the RCEP in so many ways attacks our vital interests. Or we could be wrong – despite formal requests, we do not have copies of the negotiating texts and so can only guess.

Does the Philippine government reject unduly expansive definitions of ‘investment’ and ‘expropriation’? Foreign investor-biased definitions increase the threat of legal disputes and economic sanctions.

Does the Philippine government reject prohibitions on performance requirements? These are essential for foreign investment to contribute to national development.

Does the Philippine government reject prohibitions on subsidies, trade protections, and other measures of state support? These are vital for Filipino agricultural and industrial producers to develop especially against foreign competition which grew from previous state support.

Does the Philippine government reject ISDS for giving corporations excessive rights to take it to task? We should preserve the power of the state and domestic courts.

Does the Philippine government reject obligations to preserve intellectual property monopolies? Stringent self-serving controls on knowledge to preserve monopoly profits hinders productivity increases, limits access to medicines, drains resources, and much more.

The Philippine government should reject these and many other likely policy impositions of RCEP.

There is nothing wrong with going regional, being comprehensive, getting economic, and entering a partnership. But it is so wrong to join an RCEP that disregards the right of the Philippines to have the policy space to pursue real development policies. The RCEP will prevent the Philippines from pursuing state-led national industrialization.

It is wrong to add yet another FTA to the country’s growing list of neoliberal FTAs that lock us into a path of agricultural backwardness, shallow industry, illusory growth, poverty and underdevelopment. Foreign capital and only a few of the richest Filipinos in just a few regions have prospered.

Fear of being left out is a poor argument because we give up so much. There is also less and less to be gained from foreign markets because of the protracted global crisis. Being part of transnational global value chains is not development if RCEP blocks domestic linkages and technology spillovers.

Voluntarily giving up policy space is not exercising sovereignty. And being part of an interdependent global economy does not mean surrendering national aspirations for equitable and sustainable development.

Let us preserve or indeed expand the possibilities for using tariffs and trade policy, taxation, subsidies, local content, technology transfer mechanisms, government procurement, capital controls, stricter regulation of foreign investment and other measures for development. These are among the most important policy tools that China, Japan, South Korea, India and others have used to develop. We should not let them stop us from doing what they did or, even worse, convince us that it is for our own good.#

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