RCEP, ideology and hypocrisy | Manila weather

Second of two parts

WE argued in the previous essay that the main reason the left and protectionist elements in the country are against ratifying the Comprehensive Regional Economic Partnership Agreement (RCEP) has little to do with protecting the interests of small farmers. but promoting their ideology. and their organizational interest.

The RCEP is a free trade agreement project between the countries of Asia-Pacific composed of the 10 member states of Asean (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam) , plus the three ASEAN partners (China, Japan and South Korea), Australia and New Zealand. Once operational, the RCEP trade bloc will be the largest free trade agreement in the world, representing 30 percent of the world’s population and around 30 percent of global gross domestic production (GDP). ASEAN is the Association of Southeast Asian Nations.

To prove my point, allow me to further demonstrate the logical inconsistency of the RCEP critics’ argument. They proposed that we delay joining RCEP until the government is able to deliver the necessary efficiency measures to our smallholder farmers. We have 18 months to delay our decision on the matter as provided for in the proposed RCEP agreement.

Do they honestly believe that the government can provide these competitive measures during this limited period? Having had a warm relationship with senior officials of the Ministry of Agriculture in successive previous administrations, why did they not insist on the implementation of these efficiency improvement measures within the framework of the? World Trade Organization they abhor? If these desired measures are implemented on the basis of technical and economic criteria, will their implementation agree with their atavistic ideology?

Competitiveness measures

Scholarly studies published in reputable journals (to which I can address criticisms if they want to conduct a serious study on the matter) are in consensus on the measures necessary to ensure the competitiveness of our agricultural sector.

First, we need agricultural consolidation. The protracted implementation of land reform, which the left blindly advocates in its “authentic” form, has resulted in the fragmentation of our farmland into tiny size. Our average agricultural area is now less than one hectare. This makes it difficult for our tillers to apply modern agricultural machinery and technology to improve productivity, as this equipment is beyond the means of our small tillers and will not be financially viable if purchased.

This is the reason why China, Malaysia, Thailand and Vietnam have strongly pushed for the consolidation and consolidation of farms. In turn, this has allowed their agricultural sector to industrialize and modernize. As a result, their agricultural sector is much more competitive than us in producing various products at lower prices for their consumers and the export market. A quick visit to these countries will show how their agricultural products are of better quality and much cheaper than what we can buy in our local markets.

Second, we must not devote our attention entirely to the production aspect of agriculture but to the entire value chain. We need to reduce costs not only at the farm level, but also in the processing, transport and logistics, and marketing of the agricultural product. Our goal is to ensure not only the provision of an adequate food supply, but also nutritious food at affordable prices for our consumers. A necessary element to achieve this is that government support to the agricultural sector must shift from heavy assistance focused on production (i.e. provision of public goods (i.e., roads from farm to farm). market, irrigation, dryers, cold storage facilities, among others) whose benefits last longer and flow to more farmers.

Thirdly, we must formulate various master plans in providing these public goods aids on the basis of sound technical and economic criteria and strictly adhere to these plans in building these public goods projects. We cannot leave them to the wisdom of our local legislators and officials to decide where they should be built or provided, as their decision-making process is heavily weighed by political considerations.

Fourth, we must dramatically increase the allocation of resources to research and development (R&D) that produces technologies that have immediate practical use for our farmers. We cannot leave it to our R&D institutions and our public universities and colleges to decide which research should be undertaken since their priority is above all publication and promotion as faculty members and researchers of the world. ‘university. We need to get more accountability from these researchers and technology developers so that our people can get immediate value for money from their use of taxpayer dollars.

Along this line, there must be more investment and intense effort to harness the benefits of digital technology. We should start making full use of them now to increase our productivity per unit of land and labor, counter the effects of aging agricultural workers, and harness its enormous potential for lowering marketing costs through e-commerce. Note that the second marketing revolution (i.e. from wet market to “supermarket” market) is now overtaken by the advent of e-commerce. We can rid our market of layers of traders and reduce the cost of agricultural and food products with the application of e-commerce. But this will require consolidation and better organization of our operations to ensure an adequate supply of quality products at the right time.

Fifth, we need to open up the economy to competition, as has been successfully done by others in the region. It is a cardinal principle in economics that competition generates greater innovation and greater efficiency among producers. Feeding monopolistic, oligopolistic and highly protected companies and producers through high tariffs or import bans only leads to inefficiency, high prices for poor quality products for consumers and corruption. It is for this reason that socialism in Russia and other countries has collapsed, and China must embrace state capitalism which ensures the existence of competition between state enterprises and corporations. private.

Protectionism can be applied to feed local industries, but should be implemented within a specific time frame in order to force local industries to innovate and become more competitive. Otherwise, they will become lazy and only invest money in lobbying activities to extend protection to them in the name of nationalism and our oppressed producers. But in reality, only the big protected capture most of the benefits of protectionism while victimizing millions of poor consumers with expensive products.

Finally, we need to invest more in strengthening “social cohesion” between our farmers. Social cohesion is defined in the development literature as the ability to act collectively towards the achievement of a common goal for the betterment of society. Unfortunately, there is hardly any budget allocation for community organization at the national and local levels. Awakened citizenship is a threat to the powers that be and therefore no serious effort is made in this direction.

Stratagem

I doubt that critics of RCEP agree with most of the recognized efficiency improvement measures identified by recognized academics and published in highly reputable journals. As such, their proposal to temporarily postpone our membership in RCEP to ensure the implementation of these competitiveness-enhancing measures should be seen as a simple ploy to hide their real goal of not joining the regional trade bloc because that membership in it is simply not in line with their leftist ideology. .

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