Philippine trade with US and China

was my Trade Tripper column in the 5-6 June 2015 issue of BusinessWorld:

While everybody is fixated on United States and China movements in relation to the Pacific, another set of maneuverings is happening practically unnoticed by most, and that is in the area of trade. And the effects of these could be equally significant in the longer run. It also would be a good opportunity to determine Philippine strategic thinking on such issue, particularly if there is an effective inculcation of the truism that foreign relations is but an extension of domestic policy.

The Trans-Pacific Partnership is an expanded version of the 2005 Trans-Pacific Strategic Economic Partnership Agreement and currently includes as parties Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States. The TPP is said to expand provisions of the North American Free Trade Agreement that favor US domestic industries, as well as borrowing heavily from the US-Korea Free Trade Agreement (FTA) template.

The TPP, however, is not without further controversy: the negotiations have been so secretive that many in the US complain about being in the dark regarding its contents. Zero Hedge, one of the more colorful financial blogs available online, had this interesting May 22 article en route to President Obama’s getting Trade Promotion Authority for the TPP: “While the actual contents of the TPP may be highly confidential, and their public dissemination may lead to prison time for the ‘perpetrator’ of such illegal transparency, we now know just how much it cost corporations to bribe the Senate to do the bidding of the ‘people.’ In the Supreme Court sense, of course, in which corporations are ‘people.’”

Hence, “using data from the Federal Election Commission... shows all donations that corporate members of the US Business Coalition for TPP made to US Senate campaigns between January and March 2015, when fast-tracking the TPP was being debated in the Senate. The result: it took a paltry $1.15 million in bribes to get everyone in the Senate on the same page.”

The Regional Comprehensive Economic Partnership (RCEP), on the other hand, is between the ASEAN members (Philippines, Indonesia, Malaysia, Singapore, Thailand, Brunei, Burma, Cambodia, Laos, Vietnam) and Australia, China, India, Japan, South Korea and New Zealand. It was seen as combining two prior trade proposals: the East Asian Free Trade Agreement (that had ASEAN, China, Japan and South Korea) and the Comprehensive Economic Partnership (same lineup as EAFTA but with the addition of Australia, India and New Zealand). Like the TPP, it is seen to be an FTA of high standards and comprehensiveness, including provisions that make for deeper integration between the parties.

A meeting at the ministerial level is supposed to take place in July in Kuala Lumpur, with discussions ranging from goods, services and investments, all with an eye to concluding the RCEP by 2015.

However, as East Asia Forum’s Sanchita Basu Das (“Is RCEP just the same old trade paradigm?”, Dec. 6, 2014) points out: “The RCEP agreement is plagued by the fact that participating countries are at different stages of development. Concerns have been raised that any kind of deeper economic integration could lead to huge social costs incurred by the less developed member economies. This could be due to structural adjustments and the risks of falling into a low-cost labor trap, where there is little incentive for domestic industries to move up the value chain.”

The point is that a fundamental change in thinking about economic and trade policy is sorely needed. Unfortunately, our response to international trade seems to be stuck in the 1990s. We fail to realize, as William H. Overholt ably pointed out, that the General Agreement on Tariffs and Trade and the World Trade Organization “were devised for a simpler era, when it was possible to think about world trade in the way Ricardo taught -- namely that a good is produced in one country and consumed also in a single country.” However, “by the last decade of the 20th century, production had become a complex global process. The logic of increasing efficiency by reducing trade barriers remained completely valid, but policy adaptation of that logic to a new era has faltered.”

This inability to recognize how trade evolved also feeds our continuing incapacity to measure it properly. An idea of this can be taken from Stephen Grenville: “Perhaps the most fundamental change in international trade in recent decades has been the development of multinational ‘supply chains.’ The production process has been ‘unbundled,’ with different stages of production taking place in different countries.”

Aside from the US-China dynamic, the complexities brought up don’t even approximate the intricate effects that global finance has on trade. As well as the forgotten area of culture.

Though your friendly neighborhood Trade Tripper still believes in multilateralism, nevertheless, the Philippines needs to wake up to realities and muster capabilities for greater degrees of calculation.

It would be useful therefore knowing what our presidential aspirants’ (and their possible economic teams) thinking on the matter.


Three articles on divorce

For easy reference, here are the links for the three articles on divorce previously published in my Trade Tripper column in BusinessWorld:

> Divorce means freedom? Not really. Nor is it free.
> Divorce is just a bad idea.
> Divorce and the progressive ambition to destroy the family

Now is not the time to rush a competition law

was my Trade Tripper column in the 22-23 May 2015 weekend issue of BusinessWorld:

Last Tuesday, the House of Representatives passed on third reading House Bill No. 5286 (or the substitute bill on the Philippine Competition Act). Speaking to reporters, House Speaker Feliciano Belmonte had been quoted as saying, “We hope this will become a law in this Congress, it will be for the benefit of Filipinos. It’s a [piece of] legislation that is very much needed.” This column vehemently disagrees: a Philippine competition law is not urgently needed. And even if passed, the law as currently constructed will hardly deliver the benefits its advocates insistently promise to our citizens.

The logic of the Philippine Competition Act seems to be is that to further regulate the market will set it free. Which is irony at its best. We know from trade policy history that regulation generally never benefits consumers, usually resulting in protectionism harmful to the economy. And we know that monopolies are created precisely because of regulations: that such regulations before had to do with tariff barriers and subsidies and now identified as monitoring and review really is of no difference.

Besides, the point of the Philippine Competition Act is to “prevent economic concentration, which will control the production, distribution, trade or industry that unduly stifle competition, distort, manipulate or constrict the discipline of free markets.” However, by any international standard, this is not the urgent problem of the Philippines.

We must consider that, competition-wise, we are not as ramshackle as others would have us believe. The Global Competitiveness Index gave us good marks for “intensity of local competition” (61), “effectiveness of anti-monopoly policy” (72), “prevalence of trade barriers” (51), and “prevalence of foreign ownership” (51).

Under the 2015 Economic Freedom Index, the Philippines has reasonably high marks, being categorized as “moderately free” but charting “an upward trajectory of economic freedom for the past five years.”

The Philippines ranks high (60 out of 186) in “investment freedom,” described as where there are “no constraints on the flow of investment capital.” In trade freedom” (the “composite measure of the absence of tariff and non-tariff barriers that affect imports and exports of goods and services”), the Philippines ranks a good 75.4.

Instead, the Economic Freedom Index points as problems areas such as “corruption” and an “inefficient judiciary.” And this column has pointed to areas such as low productivity, high unemployment, red tape and the bureaucratic difficulties in doing business, energy and transport costs, smuggling, traffic, and increasing teenage pregnancy and marriage annulment rates.

In short, the real fundamental economic problems that the Philippine economy faces will not be, can never be, addressed by the present Philippine Competition Act.

However, even limiting the discussion to the area that the Philippine Competition Act ostensibly seeks to resolve (i.e., monopolies and cartels) yields quite unconvincing conclusions.

The Philippine Competition Act works on this quite simplistic assumption: monopolies are bad and government is the solution. But note, not even our Constitution sees monopolies in such light: the “State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed.”

But as Lisa Campbell, senior deputy commissioner of the Canadian Competition Bureau, remarked (during the Fifth Annual International Antitrust Forum last year): “The size of a business, even one that dominates a particular market, is not in and of itself, a cause for concern. Businesses may need to become large to achieve lower production costs or to compete against foreign and domestic competitors.”

Indeed, the size of our market should lead us to appreciate the idea of “natural monopolies,” whereby maximum efficiency is derived by way of economies of scale through one or two suppliers.

As such, Filipinos should be supportive of even larger Filipino conglomerates. Take San Miguel Corp. (or PLDT or PAL), for example, which, despite its size and reach, could not really be considered possessing monopoly power due to the nature and threat presented by global (or regional) competition.

In reality, a Philippine Competition Act is far from being a necessity, at least for the present. With the many laws that we have now, the best anti-monopolization measure we can rely on is for the government to strictly enforce the rule of law. That is clearly better than adding a further layer of bureaucracy and further strain on the governmental budget.

Instead, as I have long suggested, if we must have a competition law, then let it include provisions that addresses the possibility of foreign corporations sneaking up in acquiring Filipino companies or influence to the point that monopoly powers are exercised from beyond Philippine jurisdiction, constricting Filipino entrepreneurial efforts, and damaging local consumer interests. And let us explore more vigorously the idea of implementing the “effects” doctrine as a manner of acquiring jurisdiction over those who seek to damage Philippine economic interests from abroad.

All in all, there’s really no harm if we take more time to craft a really effective competition law.


Compilation of articles on the Bangsamoro issue

For easy reference, I am listing here some selected articles I wrote for BusinessWorld on the Bangsamoro issue.

However, to start, here is my Submission to the Ad Hoc Committee of the House of Representatives on the Bangsamoro issue.

The BusinessWorld articles (selected) are as follows:

- CAB and BBL: The two towers of secession
- The Bangsamoro's international law gambit
- Bangsamoro and the myth of historical baggage
- Of constitutional interpretation and Bangsamoro Basic Law
- Bangsamoro: a question of consistency and constitutionality
- Bangsamoro: an Islamic State

A TV interview I gave on the issue can be found here.

A compilation of articles I wrote on the MOA-AD can be found here.


Divorce and progressive ambition to destroy the family

my Trade Tripper column in the 15-16 May 2015 weekend issue of BusinessWorld:

The thing is: many (but definitely not all) of those advocating for divorce want the traditional family structure of biologically related father, mother, and child be rid of. And I’ve received comments related to my previous article Divorce is just a bad idea (08 May issue) where people implicitly declared they are not against the idea of traditional marriage being done away with.

Which isn’t surprising when one remembers that “no-fault” divorce actually originated from that long-held communist objective to destroy the traditional family. As related by Donald M. Bolas (“No Fault Divorce: Born in the Soviet Union?”, 1975), the Bolsheviks regarded the traditional family as a “bourgeois” institution. When they came into power in 1917, they systematically set out to destroy it.

Interestingly, one of their first moves was to remove the classification “illegitimate children.” Ostensibly to equalize the legal status of all children, the real aim was to diminish the value of being born in wedlock.

After that came the measures to coercively redefine marriage. For communist Russia, marriage became simply a “State action,” with divorce an administrative process. Note that the no-fault divorce created by the communist State was actually unique in that it is arguably the first kind of lawsuit where the complainant (the person petitioning for divorce) does not even have to provide reasons or prove his claim. There is just no defense available for the respondent in this type of case.

And since this kind of divorce is very easy to come by, it is no surprise then to hear accounts of people being married twenty times. This was actually encouraged by the communist government, even setting up a “free love” bureau where people could hook up with like-minded partners.

The practice, according to Mr. Bolas, reached the United States and infiltrated its legal system. The US today has no-fault divorce as a norm, where every first marriage practically has a 50-50 chance of being ended by it (subsequent marriages have even higher percentages of heading to divorce).

But the question is: why would communists and their presumptive heir, today’s Progressives, be so against the idea of traditional marriages?

The key lies with our social system called “subsidiarity”: the principle that essentially says individuals should have the freedom to choose and act responsibly for themselves in achieving the common good. If individual action is too difficult, then the family steps in, then the neighborhood, then the town. Only when really necessary does the national government come in the picture. In subsidiarity’s framework, religious and non-governmental institutions play a crucial role in the formation of peoples’ character.

Progressives would have none of that. Ideologically believing they know better than you in how to run your life but history having proved them unelectable, they instead patiently engaged in the indoctrination of the bureaucracy (as well as the academe and media). And having achieved control (at least intellectually) of a substantial part of those sectors of society, they now hungrily attempt what they’ve long sought against their rivals in influence: the removal of religion and the traditional family.

Measures supportive of contraceptives, divorce, and same-sex marriage, as well as labeling religious belief as bigoted or medieval, are all designed to eradicate religion and the family’s influence on people and instead have the people dependent exclusively on government; all for the purpose of achieving the Progressive ambition of dictating the peoples’ thought and beliefs.

Relatedly, it also becomes understandable why the mere suggestion that better marriage preparation and counseling are more effective remedies than divorce would be met with violent derision by divorce advocates. Because, the fact is: it’s true.

Because funnily enough, the best marriage preparers and counselors happen to be not secular facilities (all usually under government regulation) but rather religious institutions.

Because contrary to the Progressive lie that no difference exists between religious and non-religious couples (at least as divorce rates are concerned), Georgetown University’s Center for Applied Research in the Apostolate found in 2013 that, even in “divorce-is-completely-acceptable-US,” Catholics have way lower divorce rates: “Catholics stand out with only 28% of the ever-married having divorced at some point.”

Compare this with a divorce rate of 40% for those with no religious affiliation. As one commentator puts it: “The factor making the most difference is religious commitment and practice. Couples who... take their faith seriously enjoy significantly lower divorce rates than mere church members, the general public and unbelievers.”

What’s more, University of Denver sociologists found that: “Whether young or old, male or female, low-income or not, those who said that they were more religious reported higher average levels of commitment to their partners, higher levels of marital satisfaction, less thinking and talking about divorce and lower levels of negative interaction.”

So while this column took pains to defend traditional marriage without resorting to religious arguments, it would appear that religious beliefs should indeed have a say in the public square after all.

Divorce is just a bad idea

my Trade Tripper column in this 8-9 May 2015 issue of BusinessWorld:

After my article “Divorce means freedom? Not really. Nor is it free” (April 24 issue) came out, I’ve received quite a number of comments -- many nonsensical, a few quite interesting and raising relevant arguments. None, however, addressed the particular point I made about the nature of divorce drawing in greater (if not total) State control over ordinary families. The same could be said about the economic costs of divorce, both on the family and on the country in general.

Some of the comments came from foreigners (because they indicated themselves as such), saying that my Catholic views have no place in a public debate. Which is ridiculous for two reasons: First, because this is as meritorious as me saying foreigners have no right to comment on a Philippine issue; and, second, because my article never even referred to Catholic doctrine at all.

A few did say that they’ve gone through a divorce, and are quite happy now, financially secure, with children healthy and maturing well.

Well, good for them. But many studies would find they’re the exception rather than the rule. And one can’t simply make legislation overturning centuries of tradition and history for the exception.

In any event, the studies we do have indicate that only a small percentage of divorces in the United States involved conflicted or irreparably broken marriages. The greater number of divorces arose from such relatively mundane reasons as “falling out of love” or “burnout.” Better marriage preparation or counseling can resolve this.

As for really conflicted marriages, which I repeat is in the minority, they often involve drugs, alcoholism, physical abuse, or homosexuality and these are already covered by our laws on legal separation.

Incidentally, the one ground that local divorce advocates keep using to make their case is that of “domestic violence” (or physical abuse). In reality, this actually ranks quite low as a cause for divorce (at least in the US). In some surveys they don’t appear at all.

Which makes sense. Marriage is actually a good protection against physical abuse -- it’s the jumping from one relationship to another that increases the chance of coming across an individual prone to violence. And anecdotal evidence would show that instances of incestuous rape happen more often to children with separated parents, the rapist more likely to be the new “stepfather” or “step-relative” of the child.

Still, why not allow for the transition from legal separation (that doesn’t permit remarriage) to divorce (which does)? After all, shouldn’t people have a second shot at happiness in life? Related to this is the “fire escape/safety valve” argument in favor of divorce. These are pretty good arguments, frankly. But in the end, they have to be rejected.

There are several reasons: One fundamental, a number practical. One practical reason: Should society really allow the junkie, alcoholic or abuser to inflict his behavior on a new spouse?

Another is the effect that a law constructed for a minority (i.e., really conflicted marriages) may have on the majority (ordinary marriages with its normal ebb and flow). Studies show that divorce laws (particularly “no-fault divorce”) historically contribute in encouraging the breakup of marriages exponentially through time (with US studies indicating increases at 10% annually, with one giving a high rate of 88%).

But the fundamental reason is this: Marriage has a specific definition by its nature. A definition not constructed (but merely recognized) by the State. Nor is it a social construct. Rather, the definition comes from our logical understanding of human nature independent of our wills or passing emotions and borne out as true by history.

Robert George’s formulation is quite useful for the present discussion: “Marriage is a comprehensive union, made possible by the sexual complementarity of man and woman, ordered to the all-encompassing goods of procreation and family life.”

As such, marriage has the following essential elements: heterosexual, monogamous, exclusive, and permanent. To eliminate an element is to cause a redefinition of marriage, which inevitably will present profound implications on our society.

In fact, it is this matter of redefinition that one sees the connection that the national debate on divorce has with the debate on according legal recognition for same-sex marriage.

To redefine marriage allowing for its non-permanence (i.e., divorce), one removes a principle that effectively excludes polygamous marriages. With divorce, there’s no difference between a serial and simultaneous polygamist. And yet, one must remember that marriages are also for the psychological and material welfare of children.

And since redefinition is possible, there is then no reason not to redefine marriage to include homosexual couplings -- thus removing a fundamental principle (that of marriage being directed to the procreation of and care for children) that excludes all other types of personal relationships (“throuples,” bestial, incestuous, social, etc.) that people’s fervid imaginations can care to create.

In which case, there is really no point then in having marriage at all.

K-12 and the call for liberal education

my Trade Tripper column for the 1-2 May 2015 issue of BusinessWorld:

Perhaps the phrase that best captures today’s zeitgeist is “be yourself.” Which is usually meant to underline another boomer principle: “As long as it feels good, do it.” But ultimately, such exclamations are confused. And it begs the question: What is your “self”? What is meant by “self”? One can be clever and invoke various philosophers (or, more likely nowadays, that would be “new age” gurus or “free thinkers”) to describe what that “self” is. Which is all fine and good, but it usually forgets that the choice of self has real world consequences.

This was actually homed in on me a few weeks ago when a prominent legal mind told me, in quite aghast tones (if I may add), that “even in judges’ seminars and courses, the sessions that take up crucial and foundational issues” (i.e., that seek to determine the meaning, history and context of concepts like “justice,” “equality,” “fairness” and “common good”) are dismissed by the judicial participants as “irrelevant.” Instead, what is relevant for them are technical law-school level questions: “How do you deal with a petition for quo warranto?” “How do you enforce a foreign arbitral award?” But, as stated by my friend, “issues that actually address what it is that justice demands are considered as non-issues by the very people who administer justice. Pathetic.”

Josef Ratzinger once insightfully pointed out: “Man is more than just a biological entity; he is composed also of intellect, language, history, community.” Unfortunately, today’s dominant attitude is to disregard any effort leading to a proper understanding of the self and an objective standard for that self (i.e., the natural law). Under the guise of “pluralism” and “tolerance,” society today has ironically decided to turn its back not only on traditional values but also on reason itself, deeming such to be oppressive and -- with even greater irony -- baseless.

Today, more than ever, liberal education is of great importance. It remains to be seen whether the K to 12 shift would effectively remove any semblance of classical liberal education from our system. I say “classical” because liberal education today has mostly become a farce: becoming instead a platform for anti-religion, anti-American, anti-reason, or anti-whatever type of ideological bias.

Progressives or the Left have much to be blamed for this. As Thomas Sowell puts it: “Liberal professors have trashed the liberal arts, by converting so many liberal-arts courses into indoctrination centers for left-wing causes and fads, instead of courses where students learn how to weigh conflicting views of the world for themselves.”

And this depreciation of the importance of critical thinking has been further damaged by the Left’s ruthless and relentless push for political correctness. Robert George writes: “At campuses across the country, traditional ideals of freedom of expression and the right to dissent have been deeply compromised or even abandoned as college and university faculties and administrators have capitulated to demands for language and even thought policing. Academic freedom, once understood to be vitally necessary to the truth-seeking mission of institutions of higher learning, has been pushed to the back of the bus in an age of ‘trigger warnings, micro-aggressions, mandatory sensitivity training, and grievance politics.’”

And a further twist on the progressives’ twisting of reality: the charge that religions (particularly the Catholic Church and “Catholic” educational institutions that honestly teach proper doctrine) impose absolute homogeneity of thought. Which is rubbish.

If it’s true that the Catholic Church or universities that teach Catholic doctrine properly were indeed brainwashing the faithful or students, respectively, then clearly they’re not doing a very good job at it. Anecdotal evidence or proper surveys would very likely show a healthy variety of opinions among the faithful and of the said students on the different issues confronting the country today.

Compare that to the faculty and students of the more “progressively Catholic” or secular universities where the opinions are practically homogenous and an expression of a contrary opinion (like supporting traditional families or that gender differences are not social constructs) would be met by apoplectic reactions that look like epileptic seizures.

The latter is not liberal education. It is leftist indoctrination. True liberal education is best expressed by Princeton’s recently declared policy on academic freedom: “Education should not be intended to make people comfortable, it is meant to make them think. Universities should be expected to provide the conditions within which hard thought, and therefore strong disagreement, independent judgment, and the questioning of stubborn assumptions, can flourish in an environment of the greatest freedom.”

Finally, in a society where emotionally troubled schoolchildren are on the rise, children who are simply unable to handle stress or the ordinary demands of life, a true liberal education has a profoundly important thing to offer that those pushing for K to 12 (which emphasizes science, technology, economics and math; all leading towards better employability) may want to consider: self-mastery.