Rock against the WTO

Just this weekend I read in the Manila Times that a group of Filipino musicians (Radioactive Sago, Village Idiots, etc.) are to release an album in protest of the ongoing Doha Round and the WTO. The musicians say that they are against free trade and that, although acknowledging the inevitableness of globalization and the benefits that can be had through freer trade, nevertheless feel that on the whole the multilateral trading system has been damaging to developing countries.

Lourd De Veyra, the lead vocalist for Radioactive Sago, called for an end to "excessive globalization", citing the inability of poorer countries to break through the trade barriers imposed by richer countries, the damage done by the increased influx of imported garlic and poultry to our farmers, and the fact that subsidies of the richer countries are hurting the economies of the poorer countries.

Such comments are interesting.

First of, is that what is excessive globalization? How can globalization be excessive? If globalization leads to choice, then more globalization leads to greater choice, where can the excess lie? If the choice of people becomes greater, whether it be in consumer goods, essentials, information, lifestyle, where is the downside?

However, perhaps what is really being lamented is the fact that only the developed countries are reaping the benefits of globalization, with the poorer countries unable to get market access for their own products into the developed countries. If that is the case, logically, the response is to call for greater, better, and more globalization and freer trade. If the problem is lack of market access, it is hard to understand why the solution is to lessen the drive for more market access. The present Doha Round is precisely an opportunity for developing countries to increase its market access while at the same time calling for special and differential treatment. If the Doha Round fails, the developing countries would have itself to blame (the developed countries too for having failed to practice what they preach) but note that more is riding on the Doha Round for the developing countries than that for the developed. That is why Peter Mandleson and the EC are all for “lowering expectations”. The loss of a failed Round is not that as painful for them. Nevertheless, for all the stubborness of the developed countries and the inability of the developing countries to make a united stand for fairer trade, the point here is that it's still the WTO and the ongoing Doha Round that is the poor countries best chance for improving their economies. If there is any other rational, workable avenue that could make the developed, richer, and more powerful countries to concede to the poorer ones then those with such ideas should speak up.

De Veyra also mentions the influx of imported garlic and poultry. The fact here is that imported garlic that hurt the local farmers were not imported but smuggled. There is a whole lot of difference between importing and smuggling. The latter obviously is a crime, for which the country receives no tax benefits. However, it would also mean that the blame here is not free trade or the WTO, which did not make any demands from us to increase importation of garlic, but of our own police system and customs monitoring system. The WTO should not be blamed for our inability to police our borders.

With regard to poultry, the reason why there was an increase in importation of poultry was because the local demand exceeded local production. If there is not enough chicken to go around with, what's wrong with importing them? The point here is that if the demand greatly exceeds the supply, the prices rise and who gets hurt? The consumers and when we say consumers we're not only talking of the Ayalas and the Madrigals, we're also talking here of our poor who have to make do with so little. If they can get cheaper and better goods for their money, what's wrong with that?

The foregoing, it has to be said, goes for rice. Rice is a protected industry, despite what people think. And we import rice because the supply is greatly exceeded by local demand. One reason for the lack of supply is because our land (a little also because of lack of technology) is inadequate to produce rice on a scale necessary. The Philippines, for the past 100 years, has never been a rice exporter and has never attained self-sufficiency on rice. Except that is for a brief period, during the much hated Marcos regime and under the program headed by Rafael Salas. Note that the WTO again never demands that we import rice. We import rice because we have to. Even then, with the rice being imported, it must be considered that the Filipino pays among the highest prices for this basic staple. To emphasize: our poor pays higher prices for its rice compared to the poor in Indonesia, Vietnam, and most other Asian country poor. This is the effect of not considering "comparative advantage". Yet we protect rice, rightly or wrongly, for a host of political or social or cultural reasons. If we have to protect rice (and the same argument goes for sugar), then let’s protect the same, along with the thousands of farmers depending on such for their livelihoods. But let us also remember that in protecting these thousands we are also making millions of our poor pay more for their daily food.

De Veyra goes on to comment against free trade and subsidies. The fact is, subsidies have always been there, even before the WTO and even before the GATT days. One of the goals of the WTO and the present Doha Round is to precisely negotiate to get rid of these subsidies. To actually "rock" against Doha and then lament the presence of subsidies is something that needs to be ... re-examined.

Which goes on to a further point: trade barriers, non-tariff barriers, subsidies, and the like have all been there and existed even before the WTO came into being. The reason for the WTO's existence is precisely to have a forum and an avenue to get rid of these things and ensure a better playing field for poorer countries. Get rid of the WTO and what do you have? We go back to the days of power plays, covert but muscular negotiating tactics, of which I'm sure nobody in his right mind will think we can outmuscle the US (or the EC) on a one-on-one negotiation without the benefit of the WTO.

Is the WTO a tool of the US? Then how come in most of the significant cases that the US went up to in the WTO's dispute settlement process against poorer countries the US consistently lost? The US lost to Brazil on a pharmaceuticals case, thus allowing Brazil the right to reproduce medicines against AIDS. Just recently, tiny Antigua beat the US on a case relating to online gambling. If the WTO had not been around, would these poor countries have won over the US?

Finally, globalization and free trade has been blamed for the dreaded “homogeny” of culture. Of everything being Americanized. That is simply not the case and for a group that has benefited greatly from globalization to argue such is simply eccentric. Nobody has ever, at the point of a gun, forced you to drink Coke, eat curry, watch the Pink Panther, listen to Beyonce, or wear Nike. It is your choice and the great thing about this is that this choice has been extended to the poor of our society. One big example here is the liberalization of our telecommunications industry in the 1990s. Because of that simple fact, our maids, jeepney drivers, janitors, all have cellphones. Cellphones with which to call their loved ones in the province, call up their kids in school, exchange news and information, educate themselves informally, and perhaps even change governments they don’t like.

A student once told me that she was concerned that globalization is destroying the culture of our mountain tribesmen. That is, they are now leaving their farming work in the mountains, stopped living in huts, and are now living in apartments, watching tv, and drinking Coke. My answer to her was, if you think living in mountains and breaking your back under the sun is so great why don’t you do it? The point here is that these people had a choice. They weren’t forced to change their lifestyle. If that is their choice, then no matter how unwise or unintelligent their choice is, we should respect it and be happy for them. It’s all well and good for people to be tourists while in Baguio and see these mountain people for a few minutes to be entertained but these are people too, with their own lives. We have no right to dictate to anyone how they should live their lives in the same way we don’t want us being dictated to.

Definitely the WTO is not perfect. But so is democracy. They’re both messy and they certainly need improvement. But there is simply no rational alternative. Besides, as I mentioned in a previous entry, the WTO never forced us to do anything, it never even compelled us to lower our tariffs. Whatever we did in terms of trade policy, we did it unilaterally and voluntarily as a people. If it turned out now, in retrospect, that we made commitments more onerous than we had to then we only have ourselves (and our government) to blame. However, before we start going on the blame game, ask yourself also how come you didn’t engage in the debate, how come you weren’t aware, how come you didn’t read up on this stuff on something clearly important for the country? These things and discussions have been around, in papers in our schools, in the newspapers, in the internet. Perhaps the government may have been less than ideally transparent in the past but, in any event, what was then was then and now we simply have to act.

This blog has never advocated for protectionism as a general policy or as a guiding principle. Neither, however, will it advocate for a blind “one-size fits all" type of free trade. Actually, free trade advocates in this country have probably done an equal amount of damage as the advocates of protectionism. Both should stop with their dogmatism. As for this blog, what it believes is that freer trade is indeed the way for this country to move forward. But the shape or form of that free trade, like discussions on democracy and form of government, is something that should be geared to match our unique culture, personality, geography, history, etc. as a people, and with an eye to the realities around us.

What this country needs right now is a more open, intelligent discussion of what to do with regard to our economy and of our trade policy. It is important that discussions on these be less exclusive, open to all our countrymen and not merely confined to a select number of bureaucrats and academics. This thing is so important that if Radioactive Sago and their fellow musicians want to join in on the discussions then that is great and more should follow their lead and contribute. But we should all do this smartly, with discipline, precision and clarity of thought, detachment, and with tolerance for each other’s views. Perhaps releasing a rock album on trade is a good start for everyone to get involved. But it shouldn’t definitely end there.