. . . is the topic of my latest Trade Tripper column in this Friday-Saturday issue of BusinessWorld. Excerpts:
"The benefits of a concluded Doha Round remain enormous. Different studies predicted that should the desired outcomes of Doha do come into play, there should be an expected increase in global welfare of $287 billion to $574 billion, global income could increase annually by more than $3000 billion (of which $2500 billion should go to developing countries). Interestingly, DG Lamy provided the more modest estimate, predicting an increase of $130 billion. All this must be placed in the context that, since 1995 (the birth year of the WTO), growth in trade of goods and services among developing countries averaged around 7.5%, with richer countries registering 7.2% average growth. In both instances, both were higher than such countries’ average rate of GDP growth. An even better reason for concluding Doha successfully is that although tariffs imposed on manufactured goods from developing countries are four times higher than in developed countries, nevertheless, 70% of such tariffs are actually imposed on products from other developing countries.
However, as I wrote in my column two weeks ago, the probability of Doha being closed out in 2010 is quite an iffy proposition. Amidst the still uncertain global economic situation, some significant players will be distracted by local politics and populist vote-getting rhetoric: Britain will have a general election that year and the US its midterm elections. US President Obama’s administration has actually been very disappointing, clearly unwilling to show leadership regarding trade and instead preferring to sue its trading partners.
And so, with the IMF predicting that global trade will merely recover by 2.5% in 2010 from its decline by 11.9% in 2009 (with Philippine exports currently down 18.3% year on year), it will be a little bit more gratifying if our presidential candidates put some priority into this rather politically unsexy but important subject."
Additionally, it should be noted that Philippine growth for this quarter was a mere .8% (as reported by BusinessWorld), following a dismal performance by the manufacturing sector. This should be read alongside the news that the proposed tariff cuts for the Philippines will continue.