my Trade Tripper column in the 20-21 November 2015 issue of BusinessWorld:
The 13th of November, of course, was the day radical Islamic terrorists attacked Paris. It was also an anniversary of sorts, it being the day, almost a hundred years earlier, when Western troops occupied Constantinople, the capital of the Caliphate that was the Ottoman Empire.
Coincidence? Perhaps. But this is what’s certain: Islamic terrorists specifically targeted in Paris a football game between France and Germany, a heavy metal rock concert (where the US band Eagles of Death Metal was playing), a hip upscale Cambodian restaurant, and three bars.
This was an attack not simply on Paris but against a way of life. Which is the same kind recognized by most in this globalized world. Of which the Philippines is a part.
Anybody who says those barbaric acts are solvable with better understanding and tolerance of other’s viewpoints to achieve peaceful coexistence is in cuckoo land.
There is no compromise or inane “don’t judge” position available in this case.
Accept it or not, the moment you ask for tolerance and plea for coexistence you make a stand. A stand peculiarly Judeo-Christian Enlightenment in view regarding human right, freedom, and reason. And which is precisely diametrically opposed to and clashes with the radical Islamic belief that everyone must think and do as they do.
If you don’t believe that, try asking for gender equality and religious freedom in radical Islam controlled areas.
Indeed. What these radical Islamic terrorists want is for us to change our way of life or lose it.
Realistic coexistence is unobtainable. Sayyid Qutb (a 20th century Egyptian Islamic theorist) influentially equated modernity and nonbelief in Islam to jahiliyya (ignorance of divine guidance), and declared that “Islam cannot accept any compromise with jahiliyya. Either Islam will remain or jahiliyya. The mixing and co-existence of truth and falsehood is impossible.”
Or, if you like, take the late unlamented Osama Bin Laden’s rant against Western culture, demanding we “reject homosexuality, intoxicants, gamblings, and trading with interest... drugs... art, entertainment, tourism, and freedom,” and further demanding that people be ruled by the “Sharia of Allah.”
And it goes on and on. Hating our freedoms: the fact that women are free to be educated or work, for homosexuals to be treated as people, for anyone to be free to join any religion, and to have a constitutional system that espouses the separation of Church and State.
Thus, more than foreign intervention or economics, what radical Islamic terrorists have declared war on is our world view: their unenlightened totalitarian version of existence against our twin pillars of faith and reason that created democracy and religious tolerance.
And they absolutely abhor the fact that we celebrate our freedom and that such influences their youth: from Manchester United to the trashy Kardashians, the sublimity of Bach, to reading Shakespeare and watching animé.
And that is why radical Islam prefers isolation rather than assimilating with other societies. In France alone, there are dozens, perhaps hundreds, of so-called “no-go zones” that Fox News was forced to apologize for even though it actually exists.
These autonomous areas are not officially recognized but are parts of the country dominated by Muslims and largely exclude non-Muslim people or culture. Civil authorities have abdicated control for fear of violence and secular laws are supplanted by Shariah.
Unfortunately, these areas have been taken advantage by radical Muslim clerics to preach their hateful ideology, resulting in the brainwashing of future terrorists and provide safe havens for present ones.
And thus the unfortunate and ironic statistic (taken last year) where 27% of 18- to 24-year-old French citizens support the Islamic State (IS; 16% for the whole population).
Due to the social media environment we live in, this quite blindingly obvious caveat is made: I am not against Muslims or the Islamic faith. I am not against any religion or race. What I am against are people who seek to impose their beliefs on others by violence.
So what do we do?
First is to value our way of life. We defend it rather than apologize for it. And aggressively, completely reject the littlest notion that real or imagined oppression or minority status will ever justify the slaughter of innocent people.
Another is to call these terrorists for what they are: radical Islam. Because that’s what they call themselves. Because you don’t see Catholic nuns blowing up restaurants. Because these terrorists wreak havoc to make the world ruled by an Islamic Caliphate.
We must also strongly call on the US to finally lead: restrictively guarded measures on refugees and putting boots on the ground.
While France (along with others in the North Atlantic Treaty Organization) took the admirable step of committing to obliterating IS, they just cannot do it without US strength and resources. And President Obama’s incredibly incompetent “leading from behind” presidency is utterly making matters worse.
Finally, we must also act with this realization: foreign policy is but an extension of our domestic policy. By which I emphasize: our policy in relation to Philippine territory.
Poverty and the self-entitled presidency
my Trade Tripper column in the 13-14 November 2015 issue of BusinessWorld:
Last week, BusinessWorld came out with the results of a survey pegging 3.5 million Filipino families experiencing hunger in the last three months. That represents, in just a three-month period, an increase of 700,000 hungry families. Government response to this was predictable: “We continue to address the main problems of hunger and poverty. These are related and government has implemented the social intervention -- poverty alleviation programs that we have done, CCT (conditional cash transfer) for one,” said Edwin Lacierda, presidential spokesman.
And so trust is placed in the CCT program. But with a cumulated total of P300 billion allotted for it, whatever good those programs may initially have brought has plateaued. Ultimately, it will prove harmful to Filipinos. Look around: nearly 24% unemployment, 26% poverty incidence, 7% school drop-out rate, and rising incidence of crime.
Interestingly, the Trade Union Congress of the Philippines had some pretty sensible things to say about poverty alleviation. Through its spokesman, it said that poverty “is high because the current administration’s efforts to curb poverty are off tangent (sic) and inter-agency programs are ineffective... [I]ncome taxes are still high, contractual workers are not reduced, electricity rate is among the highest in Asia, joblessness is widespread.”
Paternalistic, self-entitlement encouraging programs simply don’t work.
Five decades ago, the United States decided to launch its own anti-poverty campaign. And yet, as Ed Feulner relates (“A poor way to fight poverty”; 2014), the success never came: “That was $22 trillion ago... Yet the poverty rate is essentially the same as it was 50 years ago.”
The problem is the tendency to romanticize poverty.
This Feulner effectively points out: “When most people hear that a family is living in poverty, they naturally picture people suffering from significant material deprivation... But government surveys show that many of those officially designated as poor are surprisingly well-off. Less than 2% are homeless, and only one in 10 live in mobile homes. The typical house or apartment of the poor is in good repair and uncrowded. Indeed, the typical ‘poor’ family has air conditioning, cable or satellite TV, and a computer in the home. Forty percent have a wide-screen HDTV. Another 40%have Internet access.”
Last week, BusinessWorld came out with the results of a survey pegging 3.5 million Filipino families experiencing hunger in the last three months. That represents, in just a three-month period, an increase of 700,000 hungry families. Government response to this was predictable: “We continue to address the main problems of hunger and poverty. These are related and government has implemented the social intervention -- poverty alleviation programs that we have done, CCT (conditional cash transfer) for one,” said Edwin Lacierda, presidential spokesman.
And so trust is placed in the CCT program. But with a cumulated total of P300 billion allotted for it, whatever good those programs may initially have brought has plateaued. Ultimately, it will prove harmful to Filipinos. Look around: nearly 24% unemployment, 26% poverty incidence, 7% school drop-out rate, and rising incidence of crime.
Interestingly, the Trade Union Congress of the Philippines had some pretty sensible things to say about poverty alleviation. Through its spokesman, it said that poverty “is high because the current administration’s efforts to curb poverty are off tangent (sic) and inter-agency programs are ineffective... [I]ncome taxes are still high, contractual workers are not reduced, electricity rate is among the highest in Asia, joblessness is widespread.”
Paternalistic, self-entitlement encouraging programs simply don’t work.
Five decades ago, the United States decided to launch its own anti-poverty campaign. And yet, as Ed Feulner relates (“A poor way to fight poverty”; 2014), the success never came: “That was $22 trillion ago... Yet the poverty rate is essentially the same as it was 50 years ago.”
The problem is the tendency to romanticize poverty.
This Feulner effectively points out: “When most people hear that a family is living in poverty, they naturally picture people suffering from significant material deprivation... But government surveys show that many of those officially designated as poor are surprisingly well-off. Less than 2% are homeless, and only one in 10 live in mobile homes. The typical house or apartment of the poor is in good repair and uncrowded. Indeed, the typical ‘poor’ family has air conditioning, cable or satellite TV, and a computer in the home. Forty percent have a wide-screen HDTV. Another 40%have Internet access.”
Mutatis mutandis, the scenario is pretty much the same here.
And yet, despite the continuing ineffectiveness, the temptation to throw even more money got stronger.
In the US, as Stephen White relates: “The federal government currently spends about $800 billion on 92 separate anti-poverty programs, yet the poverty rate today is higher than it’s been in decades.”
Needless to say, our CCT program will meet the same fate.
This amidst a proposed 2016 budget of P3 trillion, representing a whopping 461% increase from 2000 and a nearly 300% from 2006.
Blame on poverty, again, is placed on corruption.
Setting aside the fact that the most massive corruption and crimes in this country are actually committed not by the poor but by our rich elite families, how will giving money away solve any of our issues is baffling.
The results of a study I’ve kept pointing out (“Childhood family income, adolescent violent criminality and substance misuse: quasi-experimental total population study” by Amir Sariaslan and his colleagues, British Journal of Psychiatry, Aug. 21 2014) was described by The Economist as suggesting “that merely topping up people’s incomes, though it may well be a good idea for other reasons, will not by itself address questions of bad behaviour. The second raises the possibility that the problem of intergenerational poverty may be self-reinforcing,” what with “the lack of impulse-control they engender also tends to reduce someone’s earning capacity.” “Neither of these conclusions is likely to be welcome to social reformers.”
Coincidentally enough, the amount of the 2014 budget deficit (P73 billion) is roughly equivalent to the 2014 budget for the CCT (at P62.6 billion).
So let’s agree on the reality that our government is burning taxpayers money.
For the Philippines, rather than corruption or foreign intervention, this paternalistic culture, where people willingly abandon thinking in favor of a government that will “take care of them” is what’s holding us back.
That’s why we should also rid ourselves of the notion that poverty should excuse people from any personal responsibility.
Some of the poorest countries in the world actually have the lowest of crime rates: Azerbaijan, Andorra, Angola, Bangladesh, Burkina Faso and Mali, Cambodia, Cameroon, and Vietnam.
Hence, why I reiterate the ideas I’ve expounded in previous articles: to focus on policies that foster, encourage, and strengthen virtues and the traditional family.
Virtue, such as self-reliance, of which the traditional family is the prime teacher, is what makes democratic societies work.
As Michael Novak (Democratic Capitalism, Sept. 24, 2013) declared: “The prospering of free societies depends on certain moral and cultural practices.”
If our government would instead work harder to support the traditional family, including assisting religious organizations, we might finally get somewhere regarding poverty.
Do presidential candidates’ qualifications matter? Have you seen the Philippines lately?
my Trade Tripper column in this 6-7 November issue of BusinessWorld:
By coincidence (or not), the questions asked of me by news outlets last week were my views on the qualifications of the presidential candidates. Or, put another way, how important are qualifications in choosing our president? And do our voters even care about these things?
My response was that qualifications do matter.
But sometimes the “qualifications” sought by our voters are of a different nature, for a different purpose, and occasionally without any relevance whatsoever to the position being voted for.
In 2010, our country had the following to choose from as president:
> Richard “Dick” J. Gordon (1971 Constitutional Convention delegate, lawyer, Procter and Gamble executive, Subic Bay Metropolitan Authority Chairman, Tourism Secretary, and Senator);
> Gilbert C. Teodoro, Jr. (Bar topnotcher, Harvard graduate, Congressman, Defense Secretary); and
> Manuel “Manny” B. Villar (UP Business Administration, self-made successful businessman, House Speaker, Senate President).
Instead, we chose Noynoy Aquino III (son of Cory and Ninoy Aquino).
Forget surveys and government statistics.
Just look out the window and commonsensically see the consequences of that 2010 vote: Filipinos paying among Asia’s highest income tax with the world’s lowest wage rates for the longest work hours; world’s worst traffic, world’s worst airports (with bullet planting), slowest Internet speed; 23.2% unemployment, nearly 26% poverty incidence; 3.5 million families hungry, deteriorating education; increased crime, increased smuggling, 1.3 million illegal aliens, China’s territorial grab, Quirino Grandstand massacre, Yolanda rehabilitation, Bangsamoro, Mamasapano.
All messes left to the next president to clean up.
And it comes with a further asking price of a proposed P3-trillion 2016 budget, amidst a nearly P6-trillion national debt.
All this because people got weepy in 2010.
Now with a 2016 vote just a few months away, some are toying with the idea of letting those who got us into this humongous wreck to fix it. That’s lunacy.
Others, meanwhile, are under the insane delusion that we’re currently doing fine and that previous governments are to be blamed for whatever problems there are.
The president elected in 2016 faces incredibly complicated international security and economic problems.
Aside from the West Philippine Sea, there’s a possible oncoming global recession, trade deals like the Trans-Pacific Partnership and Regional Comprehensive Economic Partnership, and overseas Filipino workers.
So, quite reasonably, we should be concerned that the person we choose to represent us can at least match up with the following:
> Prayut Chan-o-cha (Thai prime minister; Chulachomklao Royal Military Academy, former Army chief of staff);
> Joko Widodo (Indonesian president; successful businessman, former Governor of Jakarta);
> Najib bin Tun Haji Abdul Razak (Malaysian prime minister; University of Nottingham, corporate executive, former deputy prime minister, as well as former minister for defense, education, finance, and culture);
> Lee Hsien Loong (Singapore prime minister; Trinity College, Cambridge, a Brigadier General, and former minister for trade, finance, and defense, and deputy prime minister);
> Hassanal Bolkiah Mu’izzaddin Waddaulah (Sultan of Brunei; Royal Military Academy Sandhurst);
> Xi Jinping (Chinese President; Tsinghua University, multiple government posts);
> Shinzo Abe (Japanese Prime Minister; Seikei University, University of Southern California, Kobe Steel executive, and a number of government positions, including executive assistant to the Minister for Foreign Affairs);
> Narendra Damodardas Modi (Indian prime minister; Delhi University, and Gujarat University MA in political science.
> Malcolm Bligh Turnbull (Australian prime minister; Oxford, Rhodes scholar, journalist, lawyer, investment banker, and former environment minister.
Now the point of looking at the academic credentials and work experience is not for some sort of mathematical process, of whoever has most is best qualified.
What a lengthy resume does is to allow our people to get to know the candidate more and somehow gauge from past performance how that person will be as president.
The problem with a slim resumé’d candidate is that such person is practically an unknown, a risky investment for a logical people. Such a person would not make sense in a field of experienced candidates.
Objectively, what our people should be looking for in a candidate’s past are clues as to judgment, humility, and the ability to get things done.
Judgment: because a president needs to be steady (not prone to emotional hysterics under stress or tactless insensitivity); and the ability to make right decisions, quickly if need be and, as if often the case, with imperfect information.
Humility: because a president needs to be able to form a good working relationship with the other co-equal branches of government. A politician who ends up unnecessarily having to bully others is simply not presidential material.
And finally, the ability to deliver.
Of what use is a lengthy resume, great speeches, and charisma if that person only ends up botching every assignment he (or she) took over?
Yes, integrity is an indispensable trait.
But additionally the Philippines also needs (specially after the last five years) a president in whose hands things flourish, people perform better, and with a clear sense of correct direction.
In short, a president who obeys his oath and can get the job done.
By coincidence (or not), the questions asked of me by news outlets last week were my views on the qualifications of the presidential candidates. Or, put another way, how important are qualifications in choosing our president? And do our voters even care about these things?
My response was that qualifications do matter.
But sometimes the “qualifications” sought by our voters are of a different nature, for a different purpose, and occasionally without any relevance whatsoever to the position being voted for.
In 2010, our country had the following to choose from as president:
> Richard “Dick” J. Gordon (1971 Constitutional Convention delegate, lawyer, Procter and Gamble executive, Subic Bay Metropolitan Authority Chairman, Tourism Secretary, and Senator);
> Gilbert C. Teodoro, Jr. (Bar topnotcher, Harvard graduate, Congressman, Defense Secretary); and
> Manuel “Manny” B. Villar (UP Business Administration, self-made successful businessman, House Speaker, Senate President).
Instead, we chose Noynoy Aquino III (son of Cory and Ninoy Aquino).
Forget surveys and government statistics.
Just look out the window and commonsensically see the consequences of that 2010 vote: Filipinos paying among Asia’s highest income tax with the world’s lowest wage rates for the longest work hours; world’s worst traffic, world’s worst airports (with bullet planting), slowest Internet speed; 23.2% unemployment, nearly 26% poverty incidence; 3.5 million families hungry, deteriorating education; increased crime, increased smuggling, 1.3 million illegal aliens, China’s territorial grab, Quirino Grandstand massacre, Yolanda rehabilitation, Bangsamoro, Mamasapano.
All messes left to the next president to clean up.
And it comes with a further asking price of a proposed P3-trillion 2016 budget, amidst a nearly P6-trillion national debt.
All this because people got weepy in 2010.
Now with a 2016 vote just a few months away, some are toying with the idea of letting those who got us into this humongous wreck to fix it. That’s lunacy.
Others, meanwhile, are under the insane delusion that we’re currently doing fine and that previous governments are to be blamed for whatever problems there are.
The president elected in 2016 faces incredibly complicated international security and economic problems.
Aside from the West Philippine Sea, there’s a possible oncoming global recession, trade deals like the Trans-Pacific Partnership and Regional Comprehensive Economic Partnership, and overseas Filipino workers.
So, quite reasonably, we should be concerned that the person we choose to represent us can at least match up with the following:
> Prayut Chan-o-cha (Thai prime minister; Chulachomklao Royal Military Academy, former Army chief of staff);
> Joko Widodo (Indonesian president; successful businessman, former Governor of Jakarta);
> Najib bin Tun Haji Abdul Razak (Malaysian prime minister; University of Nottingham, corporate executive, former deputy prime minister, as well as former minister for defense, education, finance, and culture);
> Lee Hsien Loong (Singapore prime minister; Trinity College, Cambridge, a Brigadier General, and former minister for trade, finance, and defense, and deputy prime minister);
> Hassanal Bolkiah Mu’izzaddin Waddaulah (Sultan of Brunei; Royal Military Academy Sandhurst);
> Xi Jinping (Chinese President; Tsinghua University, multiple government posts);
> Shinzo Abe (Japanese Prime Minister; Seikei University, University of Southern California, Kobe Steel executive, and a number of government positions, including executive assistant to the Minister for Foreign Affairs);
> Narendra Damodardas Modi (Indian prime minister; Delhi University, and Gujarat University MA in political science.
> Malcolm Bligh Turnbull (Australian prime minister; Oxford, Rhodes scholar, journalist, lawyer, investment banker, and former environment minister.
Now the point of looking at the academic credentials and work experience is not for some sort of mathematical process, of whoever has most is best qualified.
What a lengthy resume does is to allow our people to get to know the candidate more and somehow gauge from past performance how that person will be as president.
The problem with a slim resumé’d candidate is that such person is practically an unknown, a risky investment for a logical people. Such a person would not make sense in a field of experienced candidates.
Objectively, what our people should be looking for in a candidate’s past are clues as to judgment, humility, and the ability to get things done.
Judgment: because a president needs to be steady (not prone to emotional hysterics under stress or tactless insensitivity); and the ability to make right decisions, quickly if need be and, as if often the case, with imperfect information.
Humility: because a president needs to be able to form a good working relationship with the other co-equal branches of government. A politician who ends up unnecessarily having to bully others is simply not presidential material.
And finally, the ability to deliver.
Of what use is a lengthy resume, great speeches, and charisma if that person only ends up botching every assignment he (or she) took over?
Yes, integrity is an indispensable trait.
But additionally the Philippines also needs (specially after the last five years) a president in whose hands things flourish, people perform better, and with a clear sense of correct direction.
In short, a president who obeys his oath and can get the job done.
The Trans-Pacific Partnership as a presidential campaign issue
was my Trade Tripper column in the 30-31 October 2015 issue of BusinessWorld:
Just to continue the point made in my previous article on the Trans-Pacific Partnership (TPP; “Should The Philippines Join The TPP?” Oct. 16), what is to be emphasized -- ironically, despite the title -- is not whether the Philippines should indeed join (we should, clearly) but the conditions in which the Philippines does so.
On the former, online publication The Establishment Post (“The TPP Impact On ASEAN,” Oct. 12) has this to say: “The TPP’s impact is just as significant for the ASEAN (Association of Southeast Asian Nations) countries not in the agreement. Indonesia, Thailand and the Philippines in particular will feel the competitive disadvantages for their exports (Myanmar, Cambodia and Laos still being able to use Generalized Scheme of Preferences [GSP] privileges). This will definitely put more pressure on the countries to complete the Regional Comprehensive Economic Partnership (RCEP) talks, which in turn will mean convincing India and Indonesia to be more flexible on their bargaining positions. The three large ASEAN countries might also try to reinvigorate their FTA (Free Trade Agreement) talks with the EU (European Union). Strengthening the AEC in the post-2015 era will also become more important.”
The matter, really therefore, is not “should we?” but “how?”
And as I previously noted: yes, the TPP covers almost 40% of the global economy. And indeed it affects not only tariffs but also services, investment rules, patents (including, quite ominously for many, over pharmaceuticals), agriculture, the environment, and government procurement. But of the 12 TPP members, the Philippines already has free trade relationships with seven: aside from the World Trade Organization (WTO), there is ASEAN Common Effective Preferential Tariff, ASEAN-Australia and New Zealand, ASEAN-Japan, Philippines-Japan Economic Partnership Agreement, and the (unfortunately expired but with possibility of renewal) GSP relationship with the US.
And, then, there is the Asia-Pacific Economic Cooperation (APEC).
While not an FTA, it does constitute a coverage that the TPP can only dream of. Unlike the TPP’s 12-country membership covering only 11% of the world’s population, APEC’s 21-country membership constitutes more than half of the total global population. And while everyone is agog at TPP’s being 40% of the world gross domestic product (GDP), APEC has 54%.
And this can be emphasized more when an FTA of the Asia-Pacific does become a reality.
The same thing goes for the RCEP, which has a 16-country membership, constituting (like APEC) also half of the world’s population. While its GDP coverage is scoffed at for being a mere 29%, nevertheless, one has to remember that FTAs are about trade and not GDP. In which case, the TPP’s 13% of world trade is not much of an advantage over RCEP’s 12%.
And speaking geographically, which is still an important factor in international trade, the RCEP does have India and China. And quite significant as well is the fact that TPP’s countries are not growing as fast as RCEP ones.
So there is time for the Philippines to be deliberate and more calculating about our entry into the TPP. The TPP members themselves will give us that. Canada voting a lukewarm Justin Trudeau into its premiership is one, another is the US’ quite divided hostile political environment.
As Foreign Affairs magazine (“Free Trade and the TPP,” Oct. 7) describes it: “When, after five years of talks, an agreement was finally announced on October 5, neither a single Republican leader in Congress, nor any broad business federation could be found to support it. Republican support for the TPP is indispensable since most congressional Democrats oppose it and former Secretary of State Hillary Clinton has just come out against it.
Consequently, ratification is both a question of when and if. Without ardent efforts by GOP leaders to move some of their reticent rank-and-file, the TPP cannot be ratified. Legally, Congress cannot even vote until the February primary season at the earliest and, in an election year, ratification will be an uphill climb even under the best circumstances.”
And the reason for all this wariness is something that the Wall Street Journal incisively explains (“TPP is Surprising Vote of Confidence in Globalization,” Oct. 21), of which our present political and bureaucratic leaders are strangely unconcerned about but definitely should -- the possible danger that the TPP might pose to our national sovereignty:
“‘Behind the border’ barriers are politically more sensitive than tariffs because they affect domestic policies, from human rights to how much public health systems pay for drugs. Classical arguments for free trade are also less relevant: a country that grants foreign drug companies longer patent protection is raising prices for its own consumers, and more restrictive labor laws erode its competitive advantage of cheap labor. Yet these sorts of rules are the conditions the US and other advanced countries insist on if developing countries are to have access to their markets. This is why TPP’s significance lies not in its economic impact -- modest for most signatories -- but how it restricts its members’ domestic sovereignty.”
Hence, why I repeat: the TPP (and WTO, APEC, RCEP) is not as simple as ABC.
Just to continue the point made in my previous article on the Trans-Pacific Partnership (TPP; “Should The Philippines Join The TPP?” Oct. 16), what is to be emphasized -- ironically, despite the title -- is not whether the Philippines should indeed join (we should, clearly) but the conditions in which the Philippines does so.
On the former, online publication The Establishment Post (“The TPP Impact On ASEAN,” Oct. 12) has this to say: “The TPP’s impact is just as significant for the ASEAN (Association of Southeast Asian Nations) countries not in the agreement. Indonesia, Thailand and the Philippines in particular will feel the competitive disadvantages for their exports (Myanmar, Cambodia and Laos still being able to use Generalized Scheme of Preferences [GSP] privileges). This will definitely put more pressure on the countries to complete the Regional Comprehensive Economic Partnership (RCEP) talks, which in turn will mean convincing India and Indonesia to be more flexible on their bargaining positions. The three large ASEAN countries might also try to reinvigorate their FTA (Free Trade Agreement) talks with the EU (European Union). Strengthening the AEC in the post-2015 era will also become more important.”
The matter, really therefore, is not “should we?” but “how?”
And as I previously noted: yes, the TPP covers almost 40% of the global economy. And indeed it affects not only tariffs but also services, investment rules, patents (including, quite ominously for many, over pharmaceuticals), agriculture, the environment, and government procurement. But of the 12 TPP members, the Philippines already has free trade relationships with seven: aside from the World Trade Organization (WTO), there is ASEAN Common Effective Preferential Tariff, ASEAN-Australia and New Zealand, ASEAN-Japan, Philippines-Japan Economic Partnership Agreement, and the (unfortunately expired but with possibility of renewal) GSP relationship with the US.
And, then, there is the Asia-Pacific Economic Cooperation (APEC).
While not an FTA, it does constitute a coverage that the TPP can only dream of. Unlike the TPP’s 12-country membership covering only 11% of the world’s population, APEC’s 21-country membership constitutes more than half of the total global population. And while everyone is agog at TPP’s being 40% of the world gross domestic product (GDP), APEC has 54%.
And this can be emphasized more when an FTA of the Asia-Pacific does become a reality.
The same thing goes for the RCEP, which has a 16-country membership, constituting (like APEC) also half of the world’s population. While its GDP coverage is scoffed at for being a mere 29%, nevertheless, one has to remember that FTAs are about trade and not GDP. In which case, the TPP’s 13% of world trade is not much of an advantage over RCEP’s 12%.
And speaking geographically, which is still an important factor in international trade, the RCEP does have India and China. And quite significant as well is the fact that TPP’s countries are not growing as fast as RCEP ones.
So there is time for the Philippines to be deliberate and more calculating about our entry into the TPP. The TPP members themselves will give us that. Canada voting a lukewarm Justin Trudeau into its premiership is one, another is the US’ quite divided hostile political environment.
As Foreign Affairs magazine (“Free Trade and the TPP,” Oct. 7) describes it: “When, after five years of talks, an agreement was finally announced on October 5, neither a single Republican leader in Congress, nor any broad business federation could be found to support it. Republican support for the TPP is indispensable since most congressional Democrats oppose it and former Secretary of State Hillary Clinton has just come out against it.
Consequently, ratification is both a question of when and if. Without ardent efforts by GOP leaders to move some of their reticent rank-and-file, the TPP cannot be ratified. Legally, Congress cannot even vote until the February primary season at the earliest and, in an election year, ratification will be an uphill climb even under the best circumstances.”
And the reason for all this wariness is something that the Wall Street Journal incisively explains (“TPP is Surprising Vote of Confidence in Globalization,” Oct. 21), of which our present political and bureaucratic leaders are strangely unconcerned about but definitely should -- the possible danger that the TPP might pose to our national sovereignty:
“‘Behind the border’ barriers are politically more sensitive than tariffs because they affect domestic policies, from human rights to how much public health systems pay for drugs. Classical arguments for free trade are also less relevant: a country that grants foreign drug companies longer patent protection is raising prices for its own consumers, and more restrictive labor laws erode its competitive advantage of cheap labor. Yet these sorts of rules are the conditions the US and other advanced countries insist on if developing countries are to have access to their markets. This is why TPP’s significance lies not in its economic impact -- modest for most signatories -- but how it restricts its members’ domestic sovereignty.”
Hence, why I repeat: the TPP (and WTO, APEC, RCEP) is not as simple as ABC.