SENATOR CHIZ ESCUDERO (CHIZ): Thank you, Mr. President. Thank you, distinguished Floor Leader. Mr. Gepty, just preliminary questions. When was this treaty negotiated and signed?
ASSISTANT SECRETARY AND CHIEF NEGOTIATOR ALLAN GEPTY (AG): This was, the negotiation was launched in November 2012 and then after the negotiation was followed and it was concluded on November 15, 2020 and it was also signed by the ministers of RCEP parties.
CHIZ: At that time who signed on behalf of the Philippine government?
AG: Secretary Ramon Lopez.
CHIZ: He is no longer part of the government, right?
AG: Yes, your honor.
CHIZ: Which departments were part of the negotiating team insofar as RCEP is concerned?
AG: It’s an inter-agency, your honor. The lead agency is the Department of Trade and Industry.
CHIZ: DTI
AG: And we worked together with Department of Agriculture of course the Department of Foreign Affairs, the National Economic Development Authority. We have the Tariff Commission, we also worked with Department of Finance, Department of Energy. I already mentioned Department of Agriculture. We also worked with the BSP, Securities and Exchange Commission, National Telecommunication Commission. We also worked with Department of Energy —
CHIZ: You mentioned that.
AG: Yes. Intellectual Property Office of the Philippines, the Tariff Commission of course the Bureau of Customs, the Government Procurement Policy Board, the Department of Justice, your honor.
CHIZ: Was DOLE included?
AG: The DOLE yes, your honor.
CHIZ: You didn’t mention it yet.
AG: I am sorry, your honor. I missed that one. And also, the Professional Regulations Commission.
CHIZ: I cite that because, quite frankly, that’s the most interesting parts of this treat if at all because we know for a fact the Philippines exports labor. And if not only in trade of goods that we should be concerned about but also with respect to accessibility of our labor to enter this foreign markets. But I will proceed to that point later on.
Is it safe to assume that except probably for Arse? Secretary Arse Balisacan, none of the secretaries seated behind you to part in the negotiations of this treaty.
AG: When I—the Secretary Diokno at that time he was with the Bangko Sentral ng Pilipinas. And Bangko Sentral ng Pilipinas is also part of the inter-agency who negotiated on the RCEP agreement.
CHIZ: As BSP?
AG: BSP.
CHIZ: Not as DOF.
AG: Yes, yes.
CHIZ: Anyone else? Arse was there, I guess.
AG: Yes of course. Because Philippine Competition Commission was also part of the negotiation.
CHIZ: So insofar as DTI Secretary Pascual, insofar as President Marcos, Ding Panganiban, they were all not there? And you were the chief negotiator of the government?
AG: Yes, your honor. Starting December 2018 until today, of course.
CHIZ: Now Sir, you mentioned a while ago that we have exclusions in the bill. Na ang code sa annex niyo “U”. Is that correct?
AG: Yes, excluded products.
CHIZ: And “U” stands for?
AG: “Unbound” meaning it’s not part of the reduction or elimination of the tariff committee.
CHIZ: So, kung ano siya pre-RCEP ganun pa rin siya, post RCEP?
AG: Yes, your honor.
CHIZ: And what are these products that are considered unbound? To begin with how many?
AG: Thirty-three tariff lines for agricultural products. And if you will have to include industrial products that’s 269 tariff lines.
CHIZ: Including na ‘yung 33? Or is it 269 plus 33?
AG: The excluded products for the agricultural products is 154 tariff lines, your honor.
CHIZ: So, is it 154+269? Total exclusions na may category of classification “U.”
AG: Yes, your honor.
CHIZ: Total mo naman, mahina ako sa math. 269 plus —
AG: The total excluded is 269. So —
CHIZ: 269 and the agriculture is 154?
AG: Agricultural products is 154.
CHIZ: And this was already —
AG: I’ll just take my notes, your honor.
CHIZ: And this was already accepted by other parties, trades to this treaty?
AG: Yes, your honor.
CHIZ: OK. May I ask out of curiosity was there a cap when you were negotiating as to the number of tariff lines that we can exclude? Or lahat ng hiling natin binigay nila? Lahat ng gusto natin makukuha natin o may cap ba kayong pinagkasunduan ‘andito lang tayo, bawat bansa hanggang dito lang’? What was the agreement?
AG: At the start of the negotiation, your honor, the target is to have a higher tariff liberalization.
CHIZ: Of course.
AG: As much as possible, we can target 98% of your tariff lines to be liberalized then that’s the target. And then you are entitled also to exclude your very sensitive products.
CHIZ: May cap ba ‘yung i-exclude na product for each country?
AG: So basically, based on what I have mentioned so that’s around 2% of your total tariff lines.
CHIZ: How many tariff lines do we have?
AG: Right now, your honor is that around 10,000 plus tariff lines, your honor. We have the Tariff Commission your honor we can —
CHIZ: How many, Sir? So, your agreement insofar as cap is concerned is based on the percentage?
AG: Based on the percentage to be liberalized but that is not something that is I would say that the parties are bound to work but that is an aspiration at that time. And then in the course of the negotiation, it was done in a manner that of course the RCEP participating countries will just have to gauge their level of contentment as far as the offers of the other RCEP participating countries. And if you’re okay and then you can close the negotiation.
CHIZ: Did you ask for additional exclusions that you did not get? Outside of 269 that you got?
AG: Well, the exclusions are that these are the very sensitive products so that is something that we have to protect then to protect —
CHIZ: Did you ask for more? Beyond the 269.
AG: We protected the 269 tariff lines your honor so it’s them who will ask us.
CHIZ: Kaya nga. Ikaw, itong 269 yan lang talaga yung gusto natin?
AG: Yes po.
CHIZ: Lahat ng gusto natin nakuha natin?
AG: Yes po.
CHIZ: Will that be correct?
AG: For the exclusions for this negotiation
CHIZ: For the negotiation.
AG: For this RCEP Agreement po.
CHIZ: You’re talking for all? Not only agriculture?
AG: Yes po.
CHIZ: Now, let’s proceed to the 33 you mentioned. Ano yung 33 na excluded? But lumaya yung 154? You said 154 for agri now, earlier you said 33. Is the list given by the Senate President was also 33?
AG: The 154, this are the excluded tariff lines.
CHIZ: The lines which correspond to 33 products?
AG: No, your honor.
CHIZ: OK.
AG: No, your honor.
CHIZ: So, what?
AG: Just to clarify. The 33 tariff lines basically these are the set of tariff lines that were offered where in concessions were improved. So ibig sabihin po, based on the existing ASEAN+1 FTAs dito po siya in-improved sa RCEP. Yung 154 ito yung mga tariff lines na in-exclude po natin. So ibig sabihin hindi po natin ikinomit ito dito sa RCEP Agreement.
CHIZ: Ibig sabihin pag excluded kung ano siya bago mag RCEP iyon pa rin siya pagkatapos ng RCEP, simple po.
AG: That is correct, your honor.
CHIZ: So, what’s the 33 and what’s the 154 lines? You’re talking 33 agriculture products, right?
AG: Yes po.
CHIZ: Can you enumerate them for the record, Sir, please.
AG: For the excluded tariff lines, I will just mention, your honor, the product description of these excluded tariff lines. Swine meat, fresh chilled or frozen, edible opal or mobile animals. Swine, sheep, goat, horses, asses, mules or hinnies fresh chilled or frozen. Liver, poultry meat, fresh chilled or frozen. Potatoes fresh or chilled. Onions, shallots, garlic, leaks and other aloysius vegetables. Cabbages, cauliflowers, kohlrabi, cali and similar edible brassicas fresh or chilled. We have carrots, lettuce, lactuca sativa, manioc cassava, sweet potatoes, coffee, “maize” that’s corn, rice, cereal growth, meal and pellets, rolled or flaked grains, other prepared or preserved meat, meat oval or blood tunas in airtight containers, sugar, instant coffee, complete feed for animals.
CHIZ: ‘Yon na ba ‘yon?
AG: These are the products description your honor the excluded tariff lines but if you want to see the specific tariff lines whether HS number, I can request my colleague to flash it on the screen your honor. This is technical po.
CHIZ: I was actually going there because you mentioned earlier when we were discussing, RCEP consists of 14,000+ pages. But the —
AG: That is correct, your honor.
CHIZ: But I only got two volumes clearly. This is not 14,000 pages. So, where are these exclusions found?
AG: It’s in the schedule of tariff commitment with its annex of the agreement.
CHIZ: Specifically, annex what?
AG: I’ll just check your honor. Annex 1 we have the text of the agreement and then we have market access and excess. So, Annex 1 the schedule of tariff commitments and there you will find there the schedule of the Philippines. We have the headnotes, the schedule of tariff commitments and the appendix on tariff deferential.
CHIZ: May I request Mr. President that we should give a copy in each senator and give a copy of Annex 1 because it’s not in the two volumes given to me.
JV: Yes, please provide a copy to all the senators.
CHIZ: So hindi sa hindi siya sinama as you were mentioning earlier pero may sinama sa listahan pero klinassify na “U.”
AG: Yes, your honor. It’s in the list as a set of tariff lines but excluded because it’s not part of the commitment.
CHIZ: So “U” nga ‘yung nakalagay?
AG: That’s why it’s indicated “U” there.
CHIZ: “U” unbound.
AG: Unbound.
CHIZ: Kindly furnish the copy, Sir.
AG: Thank you.
CHIZ: Now, may I ask, what’s the logic behind these 33 products when you say it’s sensitive? What does that mean?
AG: That 33 agricultural tariff lines while—these are not the sensitive that we have excluded, your honor, just to be clear. The 33 tariff lines these are just the tariff lines where in improved offers were made.
CHIZ: Meaning? What do you mean by improved offers were made?
AG: Improve in the sense that, for example, we have already the existing ASEAN +1 FTA. So, if you will look at the list, we have the fish fillet for example. Fish fillet is the product but we have five tariff lines for fish fillet. Under the existing ASEAN Australia New Zealand FTA, the current tariff rate for this fish fillet is 5%. Now in RCEP we committed to reduce this to 0% in year 15.
CHIZ: Sir, I don’t have Annex 1. I have documents that refer to Annex 1 but this or these are not what you were mentioning to be Annex 1 such as the “U.”
AG: The Annex 1 your honor is—
CHIZ: Nasaan na nga ‘yung may mga “U”? Thirty-tree lang kamo ‘yung lines. Nasaan na ‘yung may “U”?
AG: ‘Yung may “U” po ito hinighlight na po nila.
CHIZ: Asan nga ‘yung may “U” dito?
AG: It’s a—
CHIZ: No, ‘yon lang naman yung importante ‘di ba if you have documentary, evidence and proof that are indeed unbound.
AG: Yes po. Yes po. The schedule of ano —
CHIZ: No, only give us a copy. I won’t believe.
AG: Yes, we’ll give you a copy po. So, for example po dito sa schedule of tariff commitments—
CHIZ: No. So hindi mo sinama ang corn. Why? In-exclude mo ‘di ba?
AG: Yes po.
CHIZ: Meaning what it was pre-RCEP will still be what it will be post-RECP.
AG: Yes.
CHIZ: So, why did you exclude corn?
AG: Because that’s very sensitive for our agricultural sector.
CHIZ: Exactly. What does sensitive mean, Sir?
AG: Sensitive is that number one, we have local producers of corn. So, we do not want this imported corn to be competing with our local producers.
CHIZ: Do we have enough corn supply in the country?
AG: Well, based on my recollection, it’s quite challenging, your honor. So, we don’t have sufficient production of corn.
CHIZ: The question is answerable by yes or no. So, producers will be affected but we don’t have enough supply?
AG: Yes.
CHIZ: The same as true for rice, correct?
AG: Correct.
CHIZ: So, paano pa ‘yung ibang in-exclude mo? Poultry, do we have enough supply?
AG: Excluded.
CHIZ: The answer is no too. Swine, do we have enough supply?
AG: No.
CHIZ: So, what makes it sensitive the fact that there are producers even if we lack supply?
AG: Well, number one, your honor, it’s a question of competition. Competition in the sense that while you have challenges with respect to the supply there is also that agenda that you have to boost your local production because your target is really self-sufficiency. So, in other words you want to prevent that scenario that the country will be flooded of these products that will be eventually competing with our local producers and of course if you will allow that they will have to suffer. So, these are sensitive products that have been traditionally produced in the Philippines that’s why in all our FTAs we have been very protective in all these set of products.
CHIZ: But not fish?
AG: On fish I recall your honor we have over right head tuna that has been excluded.
CHIZ: Yeah.
AG: Yeah. Tunas in airtight containers, correct?
CHIZ: ‘Yung iba? You did not include fish as part of the exclusions, right?
AG: Only for tunas in airtight containers your honor.
CHIZ: Exactly. But fresh fish was not included?
AG: No.
CHIZ: So, it can freely be brought in?
AG: Sorry, your honor.
CHIZ: It can be brought in at zero tariff, right?
AG: Well, it can be brought in.
CHIZ: At zero tariff.
AG: There are many tariff lines for fish your honor. We just have to check the specifics but, basically, most of them have been liberalized, Sir, your honor.
CHIZ: Actually, my question is—so if the definition of sensitive is may matatamaang local producer ‘di ba bagaman kulang yung production sa kailangan natin o demand natin. All those 33 ‘yon ang sitwasyon. Kulang yung suplay pero dahil may local producer in-exclude. Would that be a correct description of the 33?
AG: Just to correct your honor if you’re talking of exclusion we have to refer to the 154 tariff lines of the exclusions.
CHIZ: Not the 33?
AG: Yes. For the 154 tariff lines of course as I have mentioned the sensitivity will have to begin with the several factors. And number one of them is the presence of our local producers.
CHIZ: Really? What will be the factors?
AG: Availability of supply and of course possible competition with other like products. So, marami po siyang factors that you have to take into account.
CHIZ: Ano nga kasi nagbabanggaan yung factors na ‘yon. Availability of local producer, check. Kulang ng suplay o sobrang suplay, exis man o check depende kung paano mo tingnan.
AG: Yes po.
CHIZ: So, the answer will be different and most of the cases you excluded kulang ‘yung supply natin.
AG: Yes po.
CHIZ: So, what is paramount na may local producer?
AG: Well, as I have mentioned earlier, your honor, as much as possible the target is of course self-sufficiency. So, if you can produce all the agricultural products that you need then mas mabuti po. But as I have mentioned earlier in our existing regime right now, we have already opened our market. So, in other words liberalized na po halos ‘yung mga tariff lines na ‘yan papasok na po yung mga produkto. Now, in the course of embracing an open economy, we have maintained a certain set of products that I would say very-very sensitive for the Philippines. Thus, in all our FTA negotiations we manage to secure or protect them. Now as to the determination of whether or not it is very sensitive of course the determination your honor is not mathematical not just because there’s a local producer automatically you have to exclude. There are many factors for that as we have explained earlier.
CHIZ: Kanina niyo pa po binabanggit yung many factors. Tatlo pa lang po yung narinig ko.
AG: Yes po. Well, of course—
CHIZ: Local producer, the sufficiency of supply—
AG: Of course, the potential you have to factor that in. The result of the consultation is very important. You have to consult the stakeholders.
CHIZ: So, lahat?
AG: Lahat po iyan ay tatanungin mo because you have to determine if the supply is not sufficient then, maybe, we can entertain offering that as part of the schedule of commitments. Kung sa tingin naman po nila they can compete, other stakeholders will not of course bother reducing the tariff rates. So, ganoon poi yon. Ang pagdetermine kung siya ay isasama is iyong mga factors na iyon na kino-consider po ng mga negotiators.
CHIZ: For the record, Mr. President, distinguished colleagues, isa sa rason kung bakit ang mga industriyang iyan ay hindi lumalago at nagiging competitive kapag binebeybi natin sa mahabang panahon. And if you are going to go that point, I will ask you a simple question; of the 154 tariff lines, how much money did you put in 2023 in order to improve the competitiveness of the local producers?
I know, you cannot answer that now, the point is – hindi ba? Kung iyon ang determination and you want it to be competitive at some point as you said to open up our economy; you want to open a free trade in almost every product- not only 98 but a 100%. What are we doing about it, if any? Did you make any commitments along those lines or forever we can hold on to this 154 lines?
AG: Well, that’s a good question, your honor. But actually, of course as we move forward, we have to be sensitive also to the needs and demands of the local industry, local producers, and local farmers. So, hangga’t maari po kailangan silang bigyan ng proteksyon, of course we will have to do that.
CHIZ: Which brings me to my next question, based on my reading of the treaty and tariffs you can change it anytime, correct? You can reduce the 154 lines and open it up and make it zero in three years, five years, or ten years or you can try to negotiate and increase it, correct?
AG: Well, that’s your right. In fact, you can even do that unilaterally even without FDA. If you want to reduce tariff rights then it’s a decision point that you can exercise anytime, your honor.
CHIZ: No, I want to clarify that and I want it on record because essentially we are voting for something and you are telling us that these products produced by our local farmers—not fishermen for sure are protected but that is only as of today.
AG: As far as present tariff commitments, yes.
CHIZ: Which you can change if you want tomorrow or next month or next year?
AG: That’s right, your honor. As a sovereign state you want to reduce the tariff rates-
CHIZ: No, my question is, you can change the annexes on your own without having to enter to another treaty which the Senate needs to ratify. That is an accurate depiction of the decision, right?
AG: That is excluded, your honor. If you are going to reduce that, that will be done unilaterally not part as an amendment of the treaty or the RCEP agreement.
CHIZ: Sir, I understand that. I read that in the treaty. My question is- again, ipapasa namin ito, ang dami ninyong ipinakitang excluded siyempre matutuwa lahat dahil protektado naman sila pero bukas makalawa, sa susunod na buwan, sa susunod na quarter at sa susunod na taon, sa totoo lang puwede ninyo namang tanggalin iyon e. Am I correct?
AG: Well, kung sa puwede at sa puwede, of course when you offer that matutuwa ang mga RCEP parties, they will agree. But you will have to undergo the process of amending the process agreement.
CHIZ: You can change it- you can do it unilaterally, you said? What is there to amend sa RCEP? Dadaan uli sa Senado? I think, you are mistaken, perhaps.
AG: I have to clarify that, your honor. Number one, if you are talking about reducing the tariff rates on these products, that can be done unilaterally even without a treaty. Now, in the RCEP agreement, you have certain commitments. In that commitment, certain tariff lines have been excluded. So, kung excluded siya, excluded talaga siya because in that annex you have stated that ‘it is unbound, so therefore, it is not covered by the reduction or elimination of tariff rates. Now, in the RCEP agreements as far as those committed tariff lines ang puwede mong magawa ay unilateral acceleration- ‘yung reduction. So, I hope that clarifies, your honor.
CHIZ: Does not. You are not answering my question. The question, Sir, is prinisentahan ninyo kami ng tratado na may mga inclusions—iyong 33 na binanggit ninyo, iyong 154 tariff lines, iyong may marking ‘U’ o unbound, iyon ang ipiniprisenta ninyo sa akin ngayon to vote on it but in theory, the executive branch- without the participation of the Senate, without amending the treaty can reduce the number of the tariff lines that are no part excluded or you can decide to put a zero, tomorrow or next week, right? When Congress in not in session, the President is empowered to amend the Tariff and Customs Code.
AG: That is correct, your honor.
CHIZ: You can make it zero.
AG: Yes, as for the question, you can make it or not you can make it zero, the answer is yes. Pero, kung ang tanong ninyo po kasi is doing that by changing your commitment in the RCEP agreement, my answer on that is, you will to have to go to the process of amending the agreement.
CHIZ: Doon klaro naman tayo. Iyong sinasabi ninyong listahan ng exclusion, kaya tinatanggap iyan dahil hindi maaapektuhan ang lokal na industriya. Ang sinasabi ko lang po ay iyong annex hindi naman bahagi ng tratado na iraratify namin. Iyong annex, puwede ninyong baguhin kahit kailangan ninyo gustong gawin iyon at gawing zero bigla, lahat iyon. Hindi na iyon ang classification niya, zero-zero-zero na on the second year, third year, on the fifth year. That can be done with the executive, correct?
AG: Hindi po. As far as the RCEP agreement, it’s a treaty. These annexes are part of the part and parcel of the RCEP agreement.
CHIZ: Sir, sabi mo nga, unilateral and that is in the treaty and you can unilaterally make it zero and everyone will clap. Not everyone in the Philippines ha? All the countries that sign the treaty as well. They will clap and they will be happy about it.
AG: Ang sinasabi ko po, your honor, is that puwede mo siyang gawing zero kung gusto mo but you have to amend the treaty. You will have to negotiate for that. But of course, hindi po advisable. Kasi, kung question lamang po naman, puwedeng galawin, well, the treaty can be amended. So, that is why kapag you excluded the tariff lines ay iyong isasama sa commitment. Siyempre po matutuwa po iyong mga RCEP parties. Again po, in the RCEP agreement, may proseso po iyan. The treaty will have to be amended and it will be of course modified. You’re schedule of tariff commitments will have to be amended. Iyan po ang process.
CHIZ: My question, Sir, is if you are amending the treaty, will you be getting the Senate ratification or not anymore?
AG: It depends on the amendments, your honor.
CHIZ: Ang pinag-uusapan nating amendments ay iisa lang po kanina pa. Meaning, isi-zero mo iyong dating “U”? Doon sa schedule mo? Isi-zero mo iyong dating “U.” ‘Di ba? That is the amendment I am talking about.
AG: The amendment on the treaty of course will depend on the nature of the amendment, if, of course, you are referring to the tariff rate- this is by legal opinion, your honor. Under the Customs Modernization and Tariff Act, the president is authorized to enter into a free trade agreement, and the parameters by which in a treaty or international agreement will be subject to the concurrence of the Senate if upon the determination of the Department of Foreign Affairs under EO 459 is that, number one, required changing in the law. And of course, a national policy that is permanent in character. So, iyon po ang determination.
CHIZ: Sir, we are going in circles, I am sorry. The treaty clearly says you can unilaterally. Right? If it is in the interest of the other country- and clearly is- you can make it zero. You can unilaterally do it.
AG: Kaya nga po. Tama po.
CHIZ: So, asan iyong DFA. Ano ang mga ganoon?
AG: Sir, kasi ang tanong ninyo po ay, whether or not babalik dito sa Senado?
CHIZ: Hindi. Kapag na zero ninyo iyan. Babalik ba tayo sa Senado o hindi na? Is that an amendment of the treaty?
AG: Puwedeng hindi po kasi may mga treaties ho kami- trade agreement na executive agreement lamang po.
CHIZ: Heto nga treaty ito, hindi naman ito executive agreement ikaw naman. You are talking about RCEP.
AG: Yes po.
CHIZ: So, if you change that “U” then decides to make it zero, next week, next year?
AG: Well, for me your honor, I think, that would require a legal opinion but of course, we have to take it to account that this particular agreement when it was ratified it was con guarded by the Senate. So, I would submit that in all of the changes in the agreement. We also have to defer and consult with the Senate on that?
CHIZ: So, these agreements contain all 14 thousand plus pages that we are probing and cannot be change unless it is ratified again by the Senate? That is the official position of the department?
AG: I am not in the position to answer—
CHIZ: Sir, if you cannot answer for the government, why are you answering my questions? Somebody should be answering on behalf of the executive department. You are the chief negotiator I presume; I cannot call one by one every secretary behind you. Whomever I am talking to, presumably carries the weight of the entire executive department and answers for the executive department Otherwise what’s the whole point of putting this on record? So, I ask again if you cannot answer maybe ask someone who can and put on record na kung binago ‘yan kailangan bang bumalik muna sa Senado? ‘Yong annex ah.
AG: Kasi po kung ang pinag-uusapan po kasi ‘yong pagbaba ng taripa of course that can be done.
CHIZ: Yes.
AG: Pero ang sabi ko nga po is that if you are going to amend the treaty then in the RCEP agreement itself we have a mechanism to do that.
CHIZ: Sir, if you unilaterally lower the tariffs all you have to do is give notice. That’s what the RCEP treaty says.
AG: Puwede po talagang i-lower mo if you—
CHIZ: Yes.
AG: You can do that. ‘Yong nga po ang sinasabi ko po.
CHIZ: Kaya nga. Babalik ka pa ba sa Senado, Sir sisimplehan ko tatagalugin ko na lang parang bino-budol-budol kasi bibigay niyo sa amin ‘yong tratado na sinasabing hindi kasama ‘to protektado ‘tong industriyang ‘to tapos next week, next month, next year biglang tatanggalin and we won’t even be asked. When we voted for or against it base on the annex. So, again what is the position of the executive department. You can change it and make it zero anytime, right? Congress can do it too if they want to.
AG: Yes, your honor.
CHIZ: RCEP maybe requires that you notify the other parties but why will the other parties object? They would love that, correct?
AG: Yes, your honor.
CHIZ: They would love that. Gagawin mong zero wala namang papalag, ‘di ba. Kung may papalag, tayo pero kapag ginawa nga natin all that’s required is notice that you intend to do so ahead of your schedule. Remember kung may schedule and in this case unbound. So again for the record that’s so, we’re clear so you can change, reduce the number of tariff lines and impose zero tariff that are excluded and impose zero tariff at any point in time. To clarify further, the Congress can do it too. When Congress is in recess, the President himself can do it on his own.
AG: Yes.
CHIZ: Right?
AG: Right.
CHIZ: It will not necessitate an amendment of the treaty and therefore another round of Senate ratification. Correct?
AG: Yes. Correct.
CHIZ: Correct?
AG: Correct.
CHIZ: So, the only assurance we have is that you’re considering it is insensitive right now but some point in time it may not be considered insensitive anymore for whatever reason and the executive department can do it.
AG: Yes, Your Honor. In fact, even without the commitment in the treaty, unilaterally we can really reduce tariffs.
CHIZ: No. That’s all I wanted actually to clarify. Because we’re voting on it with annexes attached to it but then again, the annexes can actually be changed anytime.
AG: Yes, your honor that can be changed.
CHIZ: Thank you. ‘Yon lang naman po ikaw naman. Thank you. Another point in services, I brought it up earlier can you discuss the aspect of services? With GATT and GATS, inapi ng husto ang mga third world countries dahil ito ang numero uno sanang puwedeng pagkakitaan ng mga bansang mayaman sa tao, bata ang kanilang mamamayan kaya lang inimbento ang 911 sadya man o hindi and all of a sudden all of these restrictions, all of these restrains in so far as the free movement of people are concern, they’re by hindering too export quote and quote in-labor. So, what are the milestones that you are able to accomplish as chief negotiator in so far as labor export is concern?
AG: Number one, your honor, kapag labor export po ang pinag-uusapan it is not part of RCEP agreement. Ang trade in services po rito na pine-pertain po dito is that ito ‘yong sa service providers, mga professionals po. So ‘yong sa mga financial services, telecommunication services basically all the sectors and subsectors under the services sector po. So ‘yong mga employment contract po ay hindi po ‘yan kasama.
CHIZ: Teacher, hindi kasama?
AG: Practice of profession po ‘yan papasok sa professional services.
CHIZ: So ano ang hindi kasama?
AG: Ano po?
CHIZ: Accountant, kasama.
AG: Yes po. Legal services po kasama.
CHIZ: Kasama. Anong hindi kasama? Kasambahay, hindi kasama?
AG: Kapag ‘yon po kasi contractual na po ‘yon. So, it has to be professional services.
CHIZ: So, I don’t see the restrains within, when a lawyer enters into an agreement with the client they sign-
AG: That’s a practice of profession po.
CHIZ: Yes. But
AG: So that’s covered by trade in services.
CHIZ: I don’t see the restriction, Sir.
AG: OK. I will restate po, your honor, ‘no.
CHIZ: Please.
AG: So, sa RCEP agreement po ang trade in services hindi po ‘yan kasama ‘yong mga labor employment, ‘yong mga nagha-hire, ‘yong mga contractual po ‘yan. Kung mayroong kasama po diyan ito ‘yong professional services which is practice of profession like lawyers, accountants, architects. So ‘yan po ‘yong mga ni-negotiate dito and I have to tell the body that in this RCEP agreement we were able to secure in hands or guaranteed market access for additional subsectors on top of the existing market access that we already secure in other FTAs.
CHIZ: Such as?
AG: So, for example po ‘pag pinag-usapan natin ay commitment on China. So, in the case of China, they have new commitment on market access for legal services and accounting except Chinese law practice. So, what does it mean? It means that our lawyers, our accountants, they can of course set-up an office in China and practice their profession. That lawyers lang hindi puwedeng mag-appear doon sa mga Chinese court. We also have auditing and bookkeeping services, ito ‘yong mga auditors natin, bookkeepers, they can practice their profession there in China. Taxation services, architectural services, even hairdressing, and other beauty services as of this point ito and of course passenger and plane transport services, that’s for China. In case of Australia, we have-
CHIZ: Hold on Sir, hanggang binanggit mo ‘yong hairdresser kumbinsido na akong profession. The definition of a profession is that it is a profession if you are required to pass a licensure exam of government. Hairdressers are not part of it.
AG: Pero hindi po kasi ito ano kasama if you are going to define it in a technical sense as profession that would require that necessary licensing requirement. Ito po kasi trade in services halos lahat po na-cover niyan. So, as I mentioned earlier, even financial services, telecommunication services, construction services, forwarding, retail, etcetera, kasama po ‘yon as services po.
CHIZ: When you say services, ‘yong labor natin ang pupunta roon?
AG: Sa services po kasi, your honor, there are four modes of providing services. So, number one we have the Mode 1. ‘Pag sinabi mong Mode 1, meaning, ‘yong service provider ay galing po sa ibang bansa or outside your territory. Providing services to a client here in the Philippines. So that’s the Mode 1. ‘Yong Mode 2 po is ‘yong tinatawag nating consumption abroad. So, let’s say ako, pupunta ako sa Australia para magpagamot so that’s Mode 2. So, I’m availing services of a service provider outside the territory. ‘Yong Mode 3 po, ito po ‘yong tinatawag nating may commercial presence, ito ‘yong pupunta na sila dito sa atin, magtatayo ng opisina ang of course magka-conduct ng kanilang business operation. ‘Yong Mode 4 po, ito ‘yong movement of natural persons, so ibig sabihin tao na mismo pupunta na rin po dito para of course magtrabaho and of course mag-practice ng profession.
CHIZ: I’m clearly referring to your Mode 4, Sir. Again, sabi mo kanina, professions ang depenisyon ng profession, pumasa ka sa isang government sponsored exam pero biglang sinama mo ang construction, biglang sinama mo ang construction services, sinama mo ang hairdresser is that Mode 4?
AG: Ang professional services po part lang siya ng trade in services. So, sa services po marami pong subsectors. So ‘yung professional services in its technical sense that you have to pass a certain licensing exam or board exam for that matter, papasok po ‘yan sa professional services pero may ibang services, not necessary services na kasama po sa trade in services.
CHIZ: Anu-ano nga ‘yong kasama? N’ong tinanong kita kanina kung ano ang kasama sa trade in services sabi mo profession lang. So ano ba ‘yong ibang kasama? Construction worker, puwede?
AG: Hindi po kasama—
CHIZ: Puwede bang magdala ng construction worker ang isang contractor na taga-Pilipinas para magtrabaho sa ibang bansa?
AG: Hindi po siya kasama as I mentioned kanina, Your Honor ‘yong mga labor employment natin ‘yong mga contractual hindi po siya kasama, employment po hindi.
CHIZ: Paano ‘yong hairdresser?
AG: Ang hairdressing po as a business, so if you want to set-up a hairdressing services there so that can be done.
CHIZ: (inaudible) Chinese hindi Pilipino?
AG: Ang kliyente niya syempre, most probably
CHIZ: Hindi. Hindi. ‘Yong gagawa ng buhok is a Filipino or Chinese?
AG: Well, Filipino po kasi ang nag-open China so—
CHIZ: Hindi, hindi. Tayo ang magbubukas doon sabi mo negotiate niyo iyon, nadagdag niyo iyon? So magbubukas ng salon, hair salon doon.
AG: Yes, I am an owner of salon or hairdressing I can set up a business there.
CHIZ: Yes, but can he bring his own people there? They’re providing their own employment opportunities for Filipinos in China.
AG: Hindi na po iyan covered ng RCEP Agreement. Because papasok na po iyan sa employment. So ‘yung mga labor employment contracts po diyan ang maga-apply.
CHIZ: Na hindi kasama sa RCEP?
AG: Na hindi kasama sa RCEP.
CHIZ: So, mas gusto niyong—and you’re proud of the fact na binuksan natin iyan para makapagnegosyo mga Pilipino roon?
AG: That’s one po.
CHIZ: Na magbibigay ng trabaho sa Chinese nationals instead of giving work perhaps to the Filipinos here? I don’t think.
AG: Of course, marami namang pong aspect and benefits makukuha if you set up a business there, in fact, isa rin po iyan magandang interes. I mean it’s good to see Philippine company is branching out outside the country.
CHIZ: So, in other words Sir, hindi kasama ang labor, contracts and employment ng mga Pilipino dito sa RCEP?
AG: Hindi po.
CHIZ: In fact, that was not even part of GATS. Why are not we not negotiating for that? I don’t get it. Hirap na hirap mga Pilipino, naloloko po, nai-illegal recruiter pa because our government negotiators never negotiated for them. They are doing it entirely on their own. And yet we are rich in labor. If these countries were signing these agreements and treaties which are actually rich in trades and products that they want to sell to us for free meaning tariff-free. Why isn’t anyone pursuing or pushing this?
I do not understand that. To cite you another example Sir, maraming Pilipino nagalit noong panahon ni Pemberton pero kailangan mong saluduhan ang Amerika sa ginawa nila sa sarili nilang mamamayan mismo. Pinrotektuhan, sinundan, binantayan hanggang sa dulo hanggang natulungan makauwi sa bansa.
You had one Spanish national convicted of a crime in the Philippines. If I am not mistaken Larrañaga. You know what the Spanish government did? They negotiated as some sort of a prisoner exchange treaty with the Philippines. Simply because of one national.
Now, all I ask is for our negotiators whenever we enter to trade agreement such as this would not only think of goods that we lack. We sorely lack. Sinara niyo pa nga may taripa pa rin kung ano yung kulang natin? And yet what we have a lot of nobody seems to be pushing for it. Why? When I read services that’s why I wanted to ask questions this to be my last point, Mr. President. I thought finally it’s there. The closest one you got was JPEPA but it requires certain units, certain understanding of the Japanese language which is barrier too, ‘di ba?
‘Yung beterenaryo nga hindi naman nakakausap yung aso dinadaan lang sa tahol kung ano nararamdaman ng aso. And yet nagagamot niya yung aso. Why did we allow it? But in this particular instance we specifically excluded it. Did we even fight for it, Sir? Did we even fight our nationals. I know they’re visa free when they go to ASEAN country. You need a visa when you go to China. You need a visa when they go to Australia. But wala tayong tinulak o ginalaw sa direksyong iyun insofar as RCEP is concerned. That’s why I asked earlier, you failed to mention DOLE. But you said DOLE is included. Asan yung aspetong iyon?
So, you have 10 million Filipinos working abroad. No protection whatsoever, hindi kasama sa mandato ng mga konsulado at embahada natin na protektahan sila, tinuturo sa OWWA palagi, tinuturo sa DOJ, tinuturo sa DOLE, where is that aspect? One of the countries in the world that actually has the most number of Filipinos working or living or a residence abroad and we’re not even—do you know anything about it and there’s nothing here that provides for it. Sorry for the—
AG: Number one, your honor, if we’re talking about pre-trade agreements talagang hindi po kasama ‘yung labor employment aspect. So, basically po—
CHIZ: Sorry, hindi kasama dahil hindi sinasama ng mayayamang bansa na mayaman sa mga produktong gustong pumasok dito ng libre. Tayo ‘yung maraming labor and yet hindi natin pinaglalaban na makapasok sa kanila para makapagtrabaho, makapagpadala ng pera sa kanilang pamilya at maprotektahan habang nandun sila.
Where is it written that is not part of it kaya nga may guts. Kaya hindi lang gut ‘yon guts, ‘di ba. But third-world countries have always followed the tone, the beat that Western countries’ big producers actually set. I haven’t seen any actual negotiations that’s been pushing for this.
AG: If I can explain, your honor. So, ‘yon nga po sabi ko yung concern po natin sa labor employment untracks po nating ginagamit ‘yan. ‘Yung mga bilateral labor agreement natin na nagli-lead po ‘yung Department of Labor and Employment. Dito po sa mga trade agreement negotiations what we are doing is to pursue our offensive interest to give more opportunities for our professionals. ‘Yan po ay isa sa mga mandato namin kaya everytime na may opportunity po kami na maka-workout ang for example mutual recognition hangga’t maaari then offensive interest po natin ‘yon gagawin ho natin.
So dito po sa RCEP agreement kung mayroon po rito na masasabi ko na oportunidad sa ating mga professionals is itong market access na binuksan ng ating mga kausap. Tapos po, mayroon po ritong platform na kung saan ang RCEP parties puwedeng mag-usap on what we called mutual recognition arrangement. So, ibig sabihin po niyan oportunidad na ‘yung mga professionals natin ay ma-recognize doon sa mga RCEP parties at least for purposes of the necessary requirements of licensee or even the recognition of the profession itself.
CHIZ: First, saang batas nakasulat na hindi niyo puwedeng tulungan yung mas mababa na manggagawa at mga propesyonal lang ang tutulungan ninyo? Saan batas po ‘yon? Why did you limit it to that?
AG: Kasi po, I’m just explaining po yung trend ngayon po sa FTA.
CHIZ: I don’t care about the trend because sir most FTAs again push for free trade in goods because that’s what they have a lot of. Sir, most FTA’s- again push for free trading goods cause that’s they have a lot of. What we have a lot of would-be services. Now, why aren’t we pushing for it? Why aren’t they putting it as part of the agenda of what we will be asking for? Sige, sige ipasok niyo produkto niyo. Sige, maraming trabahong ibinibigay sa mamamayan iyan dahil may manufacturing sila diyan. Paano naman tayo? Now, saan nakasulat, Sir? Who limited you, insofar as being the chief negotiator is concerned in negotiating only for and on behalf of the foreign professionals? And people establishing businesses there are not the lower labor force we actually have. Saan po nakalagay iyon?
AG: So, ganito ‘yun po, your honor. At the start of the negotiation—usually ho bago kayo magnegotiate talaga on the basis of the text—for example, and the rules, mayroon po tayong tinatawag diyan na usually guiding principles at mayroon kang scoping paper where you identify the areas where you will have to negotiate and agree on certain rules.
So, halimbawa, mag-uusap kayo isama si goods, si services, investment, national services, IT, petition, or government procurement. Tama po kayo na if your interest if to push for labor, puwede naman ho talagang gawin iyon. In fact, ang trend nga po ngayon sa mga bagong FTA is that may mga nagpu-push na magkaroon ng labor chapter o labor provision sa mga FTA.
Now, as to the contents of the chapter or the provisions, that would really depend on the negotiation. Ngayon, dito lang po sa RCEP, is that unang-una po is that 15—it started 16, 16 participating countries. So, ang napagkasunduan po, ito ang sasakupin ng negosasyon. Iyong labor po ay napakasensitive na bagay ng mga bansa. May mga bansa na- I would say very reluctant in incorporating an FTA on a certain labor provisions must more chapter. So, ganoon po ang nangyayari.
So, even ngayon po sa mga bagong FTA, iyan po ang isa sa mga challenges. Ongoing po ang consultation po namin ngayon. Tinatanong din namin iyong mga stakeholders about their willingness, readiness to include provisions and chapters of the FTA but for this RCEP agreement po, iyon nga po wala po iyong labor na iyong RCEP.
CHIZ: So, there is no law, nor law declared about policy that says you cannot do this? Do you think that it’s not acceptable to the other treaty or party?
AG: As long as the negotiating parties agree to include that you can always include that.
CHIZ: But did we ever push for it?
AG: I could not recall that the same was discussed, your honor.
CHIZ: Well, did you push for it as the chief negotiator?
AG: No, I did not your honor, because at the time that I came in the scope is already define.
CHIZ: So, hindi ikaw ang nagsimula nito?
AG: No, your honor.
CHIZ: Sino ang nagsimula?
AG: It started in 2012, your honor.
CHIZ: Who’s the chief negotiator at that time?
AG: It was Director Angelo Benedictos and then thereafter he was replaced by assistant secretary Ana Rubiñon then myself, your honor.
CHIZ: So, why was DOLE even included to begin with? Mga propresyonal lang sa ibang bansa ang ni-negotiate ninyo.
AG: Well, of course Department of Labor siyempre po interested din po sila on opportunities and under the trade agreement –
CHIZ: Sorry ha. Opportunities for whom? I never considered DOLE to be giving a watchful eye on the lawyers that they will have an expanded market for their services. I am not aware of any program of the DOLE that actually looks out for accountants to make sure that they can exercise their profession in some other countries. The mandate of DOLE is principally more for ordinary labor- which we call contractual labor. Not professionals.
AG: Well, unang-una po, well of course is, one, to create opportunities as much as possible. Number two is that we have to defend also out interest because the trade and services as I mentioned—the Mode 4, the moving of natural person. So, we are very protective also. We have to ensure that our Labor Code of the Philippines will be complied with. Kasi, alam naman po natin dito na ang mga foreigners ay hindi basta makapagtrabaho. So, ito iyong mga instances po na we have to cover in the negotiation.
CHIZ: I agree with that. The same is true with the professions, for that matter. How can a Filipino can set up a shop or a law firm in China if he doesn’t even know the laws of China?
AG: Well, unang-una po ‘yong opportunities po kasi is that if you are a lawyer, I mean ‘yong practice po is very comprehensive, if you are a lawyer who wants to practice international trade law for example then why not set-up an office in China or Australia or any RCEP parties that you think there is an opportunity. In the process you will be getting clients also, that’s one. If you are more into let’s say commercial practice like intellectual property for example then that’s an opportunity also for lawyers, Your Honor but of course, you have to face the reality also that if your intention is to appear before Chinese court and it will be very challenging po.
CHIZ: You cannot unless you can negotiate our rule of reciprocity which we have for example with California and if I’m not mistaken ‘di ba New York. ‘Di ba, both states, only two states in the U.S where there is reciprocity actually it’s only one way it’s not reciprocal. American lawyers cannot practice here but Filipino lawyers for as long as they pass the California bar then they can actually practice there. But if an American even if they pass the Philippine bar cannot practice law in the Philippines because the other requirement is you have to be a Filipino citizen and that you have studied and passed in a Filipino law school. So walang ganoon. In these treaties, puwede?
AG: Dito po, hindi po siya covered pero merong platform po to talk, negotiate further on mutual recognition arrangement.
CHIZ: Wala pa?
AG: Wala pa po.
CHIZ: Platform lang o opportunity to do it.
AG: Yes po.
CHIZ: And is there a platform and opportunity too to talk about contractual labor? Can you use that same platform as far as contractual labor is concern?
AG: Well, for purposes of including, every 5 years the agreement will be subjected to general review. So if you went to push for it and you think there is relevance in trade and investment scope of the agreement then of course these are the things you can consider but of course you have to take into account the position of other RCEP parties, your honor.
CHIZ: Sir, OK lang naman sa akin ‘yon. But I hope as chief negotiator and I hope in so far as the DTI is concern, I see Sec. Fred. It’s okay to lose an argument Sir, pero nakakataba pa rin ng puso sa parte ng sinumang Pilipino nakikitang ipinaglalaban sila. Hindi mo naman kailangang makuha lahat ng hinihiling at gusto mo, pangarap at mithiin para sa ipinaglalaban mong bayan. Pero at least makita man lang nilang ipinaglalaban mo hindi ‘yong pakiramdam mo ayaw nila kaya ‘wag na lang, nakakahiya
AG: Hindi po.
CHIZ: Kaya that should not be the case, that should never be the case. Last point Mr. President, so if we add contractual labor, it is an amendment of the treaty? You need to go back to the Senate and come back to the Senate.
AG: When it’s an amendment of the RCEP agreement, your honor as I’ve mentioned—
CHIZ: No. Is this an amendment to the RCEP? Because walang reciprocity, there’s a platform to negotiate for reciprocity if all of a sudden reciprocity is agreed upon all parties, is it an amendment? Do you come back to the Senate or-
AG: Well as to the amendment, yes. As to whether or not it will be submitted again to the Senate for concurrence of the ratification, then my answer is it would depend on the final outcome of the said amendment, your honor.
CHIZ: What do you mean?
AG: Well because for purposes of concurrence, the determination will have to be done of course by the Department of Foreign Affairs. If the same will be considered as a treaty or international agreement or it would suffice then it would be classified as an executive agreement.
CHIZ: I want to find out the position of the executive department under the leadership of President Marcos. Is an amendment to a treaty not an executive agreement, is an amendment to a treaty subject to Senate ratification and you have given that the treaty itself was ratified by the Senate. What is the position of the executive department?
AG: Well, I don’t want to preempt, your honor, because I am not in a position to submit my opinion on that. But of course, we can always confer with the whole Executive department.
CHIZ: You’re representing the executive department here Sir. You can consult, puwede kang magpabulong, you have an able and excellent lawyer and former chief justice behind you who happens to be the Executive Secretary, the little president and I guess on matters pertaining to legalities, the President would consult one of the best legal minds in the country up to today. So may we get an answer, Sir. Will it be subjected, will it be submitted to Senate for ratification under the administration of President Marcos? Under a new president of course it will be a different answer probably but under this administration. Libre magtanong.
SENATOR JV EJERCITO (JV): Session is suspended.
CHIZ: Last na ‘yon Mr. President.
CHIZ: Thank you, Mr. President. During, my understanding from our resource person is that if it’s a substantial amendment then it would necessitate for them to come back to the Senate and seek ratification if it’s not a substantial amendment there would be no need and can be covered by a simple agreement, executive agreement. May we just for the record have a definition of what’s substantial means?
AG: For purposes of determining, your honor, if it will be submitted to Senate for concurrence of course my basis is the decision of the Supreme Court. Number one is that if it will require a change in policy that is permanent in character then the agreement will have to be submitted to the Senate for concurrence. Number two is that if it will require amendments to our laws or legal regime for that matter then we have to submit the ratification for the concurrence of the Senate. But if the agreement is really, number one, interpretative, administrative, or for operational purposes then the same can be considered as an executive agreement.
CHIZ: And therefore, would not necessitate Senate concurrence.
AG: That is correct, your honor.
CHIZ: Thank you, Mr. President. Thank you, your honor. Thank you everyone for your time.