OFFSHORE mining stakeholders on Sunday welcomed President Ferdinand R. Marcos Jr.’s decision to affirm the country’s commitments under the Regional Comprehensive Economic Partnership (RCEP) of ASEAN Plus nations.
A free trade agreement (FTA) between the 10-member states of the Association of Southeast Asian Nations (ASEAN) and its five FTA partners: Australia, China, Japan, New Zealand, and the Republic of Korea, RCEP is expected to benefit the Philippines because of the increased trade it would bring to different member economies.
The Offshore Mining Chamber of the Philippines, Inc. (OMCPI) and its member companies seek to mine the country’s crucial mineral resources found in the deep seabed in various locations.
The group said these minerals like palladium, manganese, iron, nickel, platinum, copper, silver, gold, lithium, and the elusive rare earth elements (REE) are waiting to be tapped.
“The clean and green mining industry and the various companies under our new blue economy sector (beyond just fishing) may benefit from preferential tariff reductions for our imported industrial goods and equipment from abroad,” OMCPI Chairman Dr. Michael Raymond Aragon said in a statement.
OMCPI is pushing for offshore mining, relatively a new and developing industry in the Philippines.
Aragon pointed out that start-up industries, like the new and clean offshore mining sector, need all the support it can get from the government in order to flourish.
“Since the country’s economy is adversely affected by the more than two years of extreme Covid-19 lockdowns complicated by the ongoing geopolitical conflict between Russia and Ukraine, doing business in the Philippines (after the nationwide health emergency has been lifted) is not business as usual. From our budding sector, we need all the support we can get from the government in order for our new blue economy (beyond just fishing) to flourish or prosper. We commend the Department of Trade and Industry (DTI) for this initiative so Malacañang can act decisively on the matter, “ Aragon said.
He added that offshore mining is a new high technology, but also a very expensive way to cleanly mine for raw minerals in the deep seabed of the country. He said the Philippines does not possess this high technology, as well as the huge capital needed, and must seek foreign resources to do business in offshore mining.
Offshore mining is entirely different and is a very much cleaner and greener mining process, compared to the usual land-based mining industry currently popular in the Philippines.
OMCPI and its green mining companies that are pioneers in offshore mining of untapped resources—crucially needed in the electronic and renewable energy sector—will boost the green or clean energy transitions from the old and dirty carbon-based energy sources, eventually helping combat or mitigate climate change
IEC campaigns are key
Meanwhile, a Department of Trade and Industry (DTI) official has asserted that intensifying information and education campaigns among local stakeholders is crucial in increasing the utilization rate of RCEP.
“That’s the most important thing that we should address. Because after the effectivity of the RCEP agreement, we really have to launch and intensify information and education campaign,” Allan B. Gepty, DTI Assistant Secretary for Industry Development and Trade Policy and the Philippines’s top negotiator for RCEP, told reporters on the sidelines of the event “Breaking Economic Barriers” organized by the British Chamber of Commerce of the Philippines.
Gepty added, “That’s why we have to really come up with a lot of publications basically informing stakeholders how to utilize the RCEP agreement and other ASEAN+1 free trade agreements (FTAs) and Philippine bilateral FTAs including our preferential arrangement like the [EU Generalized System of Preference Plus] EU GSP+.” He also underscored the importance of educating stakeholders how to export to these foreign markets.
To complement the launching of workshops, seminars and information campaigns, Gepty said DTI intends to establish international trade assistance centers that can serve as “FTA clinics in strategic regions and provinces” so that the country’s stakeholders and businesses could collaborate with these centers and help them utilize these free trade agreements.
While he did not divulge a “utilization rate” for the mega trade deal which the Philippine Senate recently concurred in, Gepty said DTI aims to onboard stakeholders and exporters who deem the RCEP agreement fit and “advantageous” to their product.
“It could be possible that other FTAs are more advantageous to their product. So it would really depend on the FTA that would fit the comparative advantage or the competitiveness of a certain business. But what is important is that we just have to ensure that our exporters, the stakeholders…are using the proper FTA.”
On Thursday, the National Economic and Development Authority (NEDA) Board, chaired by President Ferdinand R. Marcos Jr., approved an executive order (EO) implementing the Philippines’s commitments under the RCEP.
According to Trade Secretary Alfredo E. Pascual, the EO is proposed to be effective on June 2,2023 to coincide with the end of the 60-day period “after the deposit of the instrument of ratification.”
Gepty noted that the EO is a “legal issuance” to implement the country’s tariff commitments under the mega trade deal. “If you will note under the RCEP agreement, we have the schedule of tariff commitments so we have to of course comply with that commitment and to do that, we have to issue the necessary EO.”
Meanwhile, according to a study published by state think tank Philippine Institute for Development Studies (PIDS) in 2021, the country’s FTA utilization rate under the Philippines-Japan Economic Partnership Agreement (PJEPA) is “alarmingly low” at 16.6 percent.
Citing various studies, the authors said the low FTA utilization rate can be attributed to factors such as “lack of information or knowledge about FTAs, procedural delays, administrative and compliance costs, and availability of other incentives schemes.”
To address this, the study called on the government to “ensure that importers have all the available information related to importation under PJEPA and all the other FTAs,” especially the micro, small, and medium-sized importers and those in rural areas.
The authors said this might be a challenge for the government due to limited resources; thus, it should “partner with business groups and organize information sessions and workshops to specifically increase the capacity of importers to utilize FTAs.”
