Nobody does it better

. . . is the topic of my latest Trade Tripper column in this Friday-Saturday issue of BusinessWorld. Excerpt:

"Somehow I have a feeling that a quick economic upturn for the country may actually be bad for us. It’s like a hospital patient who was brought good food by his family. By immediately feeling better, the patient may actually be caught up in the illusion of being better, which are two different things. Add the fact that if the presidential elections get truly underway in 2010, the streets would be flooded with campaign money (from who knows what source), deluding people into thinking that the economy is improving and making them forget that certain necessary reforms really need to be done immediately. And if my inexpert readings of history are to be relied upon, our national coffers would most likely be empty by the time the elections are over and a new administration steps in. Certainly not an ideal situation during a global recession."



As reported in BusinessWorld, "Electronics may no longer be the Philippines’ top exported good and leading manufacturing industry by 2014, as foreign firms opt for cheaper labor elsewhere, University of Asia and the Pacific economist Bernardo M. Villegas told a business forum yesterday. The industry, Mr. Villegas said, has not moved up the value chain to operations such as design and research in time to make up for its eroding edge in labor costs. In its place, agriculture and processed food will likely become the country’s top exports in five to six years, alongside outsourced services, Mr. Villegas said."

As expected, the electronics sector reacted defensively to this. However, to anybody who has observed the complacent (some would say verging on the arrogant) attitude that the industry has fallen into for the past few years, Dr. Villegas' statements are but declarations of the obvious and the inevitable.

Interestingly, instead of taking note of the comments and using it as an opportunity to improve, the reaction of the industry heads were to say, essentially, that they're doing fine as it is.


Kirk on US trade policy

In connection with the article below (Falling trade), see the comments (click here for full copy) of USTR Ron Kirk:

"The economic crisis gives us a unique opportunity to rethink trade. x x x It’s time to show those businesses, and our workers, that the President and the United States Trade Representative have their backs - at the negotiating table, in the enforcement process, and in those instances when competition forces a worker to transition from one job to another. x x x We identified barriers to U.S. market access in the National Trade Estimate report on March 31. We are following up to determine which ones are costing America the most jobs and opportunities. And we will use all the tools in USTR’s toolbox to go after those trade barriers. There will often be expedient and productive ways to work things out, through direct dialogue or formal consultations in the WTO. When it becomes necessary, we can employ litigation in the WTO as well."


Falling trade (drifts by my window)

. . . is the topic of my latest Trade Tripper column in this Friday-Saturday issue of BusinessWorld. Excerpt:

"What is mystifying and, for the present, disappointing, however, is the current US administration’s attitude toward trade. First glimpses of the new order could be seen during Ron Kirk’s confirmation hearings for the USTR. As he answered in response to a question posed to him by Senator Grassley, Kirk stated his agreement "that enforcement of our trade laws and our rights under international agreements is not protectionism." By itself, not as ominous, but then this must be read alongside Kirk’s hinting that the US will continue to defend it’s globally criticized anti-dumping "zeroing" methodology before the WTO."


Obama and the Church

If a man can't stand up for his own religious principles as he proclaims them to be, what use are his politics?

US President Obama asked Catholic university Georgetown to cover up its religious symbols before he spoke there (click here for the story). As US Catholic League president Bill Donohue rightly put it:

“The cowardice of Georgetown to stand fast on principle tells us more than we need to know about what is going on there, but the bigger story is the audacity of the Obama administration to ask a religious school to neuter itself before the president speaks there." He added, "Obama is in enough trouble with Catholics—over his pro-abortion executive orders and appointees, his position on embryonic stem cell research and his war on the conscience rights of healthcare workers—that it seems almost suicidal for his administration to push the envelope one more time. This is getting old fast.”

More on the Church and contraception

The Vatican defends itself against unduly vicious criticism regarding the Pope's remarks on condom and AIDS (click here). Rev. John Wauck, professor of literature at the Pontifical Santa Croce University in Rome, said "the criticism of the pope was scientifically uninformed".


The Church and contraception

. . . is the topic of my latest Trade Tripper column in this Friday-Saturday issue of BusinessWorld. Excerpt:

"Clearly, there are socio-economic or medical considerations that need to be addressed. We should remember, however, that though material poverty and physical sickness are indeed serious matters, even more serious would be to disregard spiritual poverty and sickness. Reliance on contraception is simply wrong for being immoral and against the teachings of our faith. It deludes people by disguising the problems that should actually be addressed. It is also quite conceited for us to think that the Church would take a stand against contraception without taking into account the realities of this world. Again, Humanae Vitae: 'The teaching of the Church regarding the proper regulation of birth is a promulgation of the law of God Himself. And yet there is no doubt that to many it will appear not merely difficult but even impossible to observe. Now it is true that like all good things which are outstanding for their nobility and for the benefits which they confer on men, so this law demands from individual men and women, from families and from human society, a resolute purpose and great endurance.'"


Although the WTO has noted that protectionist measures are indeed on the rise globally, Philippine policies, thankfully enough, so far, remain fairly supportive of free trade. Such were my thoughts when interviewed by BusinessWorld for this article:

"I think we have not fallen into the protectionist traps so far. The reason is because the government has been distracted with political issues and groups calling for protectionist measures have not found a credible argument or intellectual backing. But since next year is an election year, populist measures can be something of a campaign strategy."

Happy Birthday

Today, 16 April, is the birthday of Pope Benedict XVI.

Best wishes to you and our prayers.


Philippines in ITA dispute

In DS375, the United States and Japan on 28 May 2008, and Chinese Taipei on 12 June 2008, requested consultations with the European Communities and its member States with respect to their tariff treatment of certain information technology products. The three WTO Members claim that the tariff treatment the European Communities and its member States accord to certain information technology products does not respect their commitments to provide duty-free treatment for these products under the Information Technology Agreement (ITA).

The Philippines made a request to be part of the consultations. To read the documents submitted for this dispute, click here:

Communication from the Philippines

The following communication, dated 11 June 2008, from the delegation of the Philippines to the delegation of the European Communities, the delegation of the United States and to the Chairman of the Dispute Settlement Body, is circulated in accordance with Article 4.11 of the DSU.

With reference to WT/DS375/1 and pursuant to Article 4(11) of the Dispute Settlement Understanding, I have the honour to request that the Philippines be joined in the Consultations requested by the United States, with respect to the tariff treatment the EC and its member States accord to set-top boxes with a communication function, flat panel displays, "input or output units", and facsimile machines.

The Philippines has a substantial trade interest in the consultations requested by the United States. We would be grateful of being informed of the date and venue of the consultations.

Job vacancies

Two Appellate Body positions are open, one in July, replacing a Brazilian Luiz Olavo Baptista, and one in December to replace Italian Giorgio Sacerdoti. The reported nominees are Hector Torres (Argentina), Ellen Gracie Northfleet (Brazil), Ronald Saborio Soto (Costa Rica), Peter Van den Bossche (EU - Belgium), Pieter-Jan Kuijper (EU - Netherlands), Ricardo Ramirez (Mexico).

By past trends, it may be reasonable to expect that Sacerdoti's slot will be filled by someone from the EU. Peter Van den Bossche, for me at least, will most likely get one of the slots. The six-member interview panel is chaired by the current head of the WTO's dispute settlement body, Canadian ambassador John Gero.


The importance of good trade lawyers

In a May 2008 article by Gregory Shaffer, Michelle Ratton Sanchez, Barbara Rosenberg entitled The Trials of Winning at the WTO: What Lies Behind Brazil's Success (41 Cornell Int'l L.J. 383 ), it was argued that the hiring by Brazil of US trade lawyers spelled the difference.

This claim, though, could be examined more closely. Antigua won its case against the US without resorting to Brazil's methods. Besides, for developing countries like the Philippines, the development of its own pool of trade lawyers would be essential. In cases of real necessity, there is also the Geneva based Advisory Centre on WTO Law, for which our very own Leo Palma serves as deputy director.


In further defense of trade

. . . is the topic of my latest Trade Tripper column in this Friday-Saturday issue of BusinessWorld. Excerpts:

"The other error that supporters of trade make is that they excuse trade liberalization as a matter of gains vis-a-vis compromises that one makes in the normal course of trade negotiations. This argument goes that allowing imports is an unavoidable "concession" in exchange for a country being able to export its goods. That is wrong. And intellectually dishonest. Countries trade because the imports by themselves are good regardless of the exports. The imports are beneficial because the consumer and domestic industries now get to avail themselves of the better-quality and lower-priced goods and raw materials from countries with a comparative advantage on such. Understandably, there is a certain amount of difficulty in getting this message across but supporters of trade would do well to bear in mind this important fact.

Finally, supporters of trade should remember that trade always imposes certain demands on a country. It would require better internal infrastructure and governance. Otherwise, the benefits of trade would be terribly mitigated. It definitely would need companies to be more competitive. Trade does not make companies competitive. Companies just now have the option to be competitive because there is trade. It is merely still a competition, for which a country has the choice to work harder or fall by the wayside."


Trade notes

Joseph Stiglitz expresses disapproval of the Obama bank bailout plan (click here).

The Financial Times reports that, despite the rhetoric of world leaders supporting trade, protectionism looms its ugly head. And Gideon Rachman of the FT has an interesting article on "the importance of empty words" in relation to trade.