. . . is the topic of my latest Trade Tripper column in this Friday-Saturday issue of BusinessWorld. Excerpts:
"Indeed, such copycat behavior is already being manifested here with the sudden clamor for increasing tariffs on imported products. To do so would be a blunder. Aside from the harm it will do to the substantial number of our citizens under poverty level, it also forgets the fact that it will subject our exports to even less competitiveness and invite retaliatory measures from our trading partners.
What’s interesting is the sophisticated language being employed to disguise what is essentially a protectionist campaign that could only serve the interests of a select few. So it was mentioned that any tariff increase be within international trade rules. Obviously. That goes without saying. And completely beside the point as the focus should be whether there are actually any national welfare benefits to be derived from tariff protection. Another point raised is that the tariff increases are a corrective to the liberal or unregulated trade policies of the past. Assuming such is correct, this ignores the fact that the last substantial tariff reductions happened years ago, for which businesses should now have had enough time to adjust and gather competitiveness.
Also interesting is the repeated use of the word 'calibrate' in relation to the tariff increases, implying an increase that is calculated or strategic. However, what could 'calibrate' under this context really mean? Is there any scientific, methodical formula that actually distinguishes 'calibrate' from the mere arbitrary raising of tariffs for favored industries? How are industries to be systematically selected for tariff protection as opposed to a small exclusive group of rich people deciding that by themselves? Have the effects on the non-selected industries and consumers been determined? How can tariff protection result in better competitiveness of such industries? Considering the fact that Philippine imports recently fell by 31.5%, what need is there for tariff increases?
Make no mistake, this column is not advocating for 'unbridled liberalization' (like 'calibrate,' another slogan without any real meaning). What we’re advocating for is a sensible plan that’s not reactive by nature, with due deliberation, and with an eye for the greater populace and not merely for the interests of a select vocal few. Indeed, what this column would suggest, rather than protectionism, is for increased government spending on education and training of our workers."