The elections are over, thank God! Now let’s pay attention to international trade

my Trade Tripper column in this 13-14 May issue of BusinessWorld:

Well, back to regular programming.

You may not have heard of it but May is World Trade Month, with LA Area Chamber’s 90-year-old initiative World Trade Week happening this 21-26 May. The annual Trade Winds Forum, meanwhile, is from 14-22 May, where US companies will be able to network on investment opportunities in Singapore, Malaysia, Indonesia, Thailand, and Vietnam.

Unavoidably, politics has a way of tarnishing the optimism that people would like to attribute to international trade.

Talk of walls, of bringing jobs back, and stronger enforcement of trade remedies signal a return to protectionism. Ironically, while serving as sop for the populist brigade, experience has shown it has always made life harder for the poor rather than bettered it.

A lot of the criticism against trade runs on false logic.

“International trade is often blamed for the economic disparities and dislocations”, according to Dan Ikenson (“Crucifying Trade For The Sins Of Domestic Policy”; May 2016), that the US (and a lot of other countries, including the Philippines) are experiencing. “One reason for the connection is that trade is falsely portrayed, and easily perceived, as a contest between nations.”

For leftists, the “narrative” (a word that should really be banned) is that the domestic team (i.e., Team Philippines) “must outscore the foreign team.” Exports (or sales) are points for us, while imports (purchases) are points for the other team.

Only, the real world doesn’t work that way. Not everything boils down to a “we win-you lose situation.”

Look: when you bought this newspaper, you engaged in a trade: money for newspaper. Who lost? Neither. Both BusinessWorld and you won because each got what it wanted.

If international trade were indeed a zero-sum game of “one up thus the other goes down”, then there wouldn’t be much trade going on sustainably to begin with.

Which leads to a point by Jonah Goldberg (“Arguments against Free Trade are Deeply Flawed”; April 2016): “protectionists are also wrong philosophically. Countries don’t trade with others countries; businesses and consumers transact with other businesses and consumers. Protectionism is corporate welfare by other means.”

In other words, international trade is the great leveler: it bypasses the power of State planners and oligarchs by allowing even the smallest of businesses to transact with one another directly.

Make no mistake, there is competition between countries as to who can sell to who. But that’s going to a different category of discussion. And the response to that is better expressed by Ikenson:

“Trade enables each of us to focus our productive efforts on what we do best. Instead of allocating small portions of each day to producing everything we want to consume, we specialize in an occupation and exchange the output we produce most efficiently (monetized in the form of wages and salaries) for the goods and services we produce less efficiently.”

“Under that arrangement, we are able to produce and consume more than we could without specialization and trade. We are freed from performing tasks that we are less well-suited to perform, yet we can consume the fruits of those foregone tasks through exchange. That specialization changes the composition of the types of value-added activities performed in the country, as well as the types of jobs.”

One popular argument against trade liberalization is that it poses risks for the environment, that increased manufacturing and commercialization pollutes at far higher levels.

The same goes for product standards and for labor.

But in order to protect the environment and labor, and uphold product safety, a State needs more money. And international trade has proven to be the most successful in generating income for developing countries:

“There is considerable evidence that more outward-oriented countries tend consistently to grow faster than ones that are inward-looking. Countries that have opened their economies in recent years, including India, Vietnam, and Uganda, have experienced faster growth and more poverty reduction. On average, those developing countries that lowered tariffs sharply in the 1980s grew more quickly in the 1990s than those that did not.” (Global Trade Liberalization and the Developing Countries; IMF Staff, 2001).

Not to mention closer partnerships amongst countries to monitor and uphold such standards, as well as exchange of best practices.

Unfortunately, the WTO projects that “growth in the volume of world trade is expected to remain sluggish in 2016 at 2.8%.” This amidst a several months slump for the Philippines in terms of exports.

And people still have to detach analysis from income inequality with international trade. This confuses a lot of people, particularly when brought up by way of political rhetoric. But they have to be discussed separately: the former involves domestic structures, the latter on international relations, with competitiveness as the main link.

A lot of work clearly needs to be done.

Perhaps one good thing about the recent national elections is that it’s finally over and we can focus now on matters that are really more important.

Going Right: The need for a conservative movement in the Philippines

my Trade Tripper column in the 6-7 May 2016 issue of BusinessWorld:

In three days, this country votes for its next president. Whatever the results (which could only be “change” of idiotically disastrous proportions or a continuation of our present incompetent course or perhaps -- miracle of miracles -- one of a steadier tone of government), there is a need for our politics to be reasoned, less hysterical, and more fact-based. A good start would be to promote the counter-balancing thought of “conservatism.”

I say “counter-balancing” because this country, by culture and by law and policy, have leaned towards the “Left” ever since the Third Republic was born.

Reared and suckled by the “New Deal”, “Camelot”, and the “Great Society”, our country’s compass oriented towards the “parens patriae”, of government being the benevolent father taking care of the “children” (i.e., us citizens).

One sees the foregoing in our labor laws, welfare policies, the incredibly bloated budget and bureaucracy, the patriarchal local government, the monarchical office of the president, and even with regard to business and the economy, as well as defense.

The irony here is that while our politics and governance may have veered towards the Left, with our government institutions, media, and the academe dominated by its thought and attitude, our Constitution is intrinsically conservative at its core.

The concept of rights (found primarily in the Bill of Rights), the need to uphold the “common good”, and the principle of “subsidiarity” (most ostensibly found in the local government provisions) are fundamental conservative principles.

Conservatism has been derided as the “stupid party” (a comment attributed to John Stuart Mill). However, the statement’s credibility goes not against the label’s target but rather on those using it.

For the Left has always resorted to name-calling to hide its shallowness, degenerating with their repeated failures disguised by the mere trick of changing their nomenclatures: abortion is never abortion, it is pro-choice; global warming morphed into climate change; and changing its branding from communism to radical activists to socialists to liberals and now “progressives.”

But it is conservatism that has always seen the richest of thought come into play, starting from the 1950’s onwards, with intellectual godfathers such as Friedrich Hayek, William F. Buckley, Jr., Ludwig von Mises, Russel Kirk, Whittaker Chambers, and James Burnham.

Conservatism’s beliefs can be distilled to certain clear logical ideas, many succinctly expressed in the 1960 Sharon Statement (made by a group of young conservatives, led by William F. Buckley, Jr.).

Additionally, through the years, social issues (particularly on sexual ethics) grabbed national attention and thus the relevance of the ideas expressed by John Finnis, Robert George, and Antonin Scalia on legal philosophy and political thought.

Adopting all the foregoing, expanding it, and revising to apply directly to the Philippines, conservatism makes the point that government’s main rationale is to promote the common good through the principle of subsidiarity, with the aim that the Filipino takes personal responsibility for his flourishing. Thus, the Philippine conservative tenets:

• Taxation and governmental regulation must be kept to a minimum to encourage free enterprise and innovation;
• The free enterprise and market economy, by which resources are allocated through the democratic choice of the people themselves, must be upheld over central planning, socialism, or other similar systems which diminishes Filipino motivation, liberty, and personal accountability;
• Governmental powers must be kept to a minimum to always secure individual liberty and responsibility;
• Welfare assistance to the poor and marginalized are best done voluntarily, through religious organizations and civil society, rather than coercively through taxes;
• Government programs must always revolve around the idea of personal responsibility, not encouraging self-entitlement mentality;
• The primary duty of the government must be national security and the upholding of the rule of law;
• Foreign policy must be consistent with our domestic policy, which in turn arises from our people’s values, traditions, and history;
• The sole purpose of foreign policy is to serve national interest;
• The traditional family and marriage must be protected as human goods in themselves and in recognition that such are best for the proper formation of the youth;
• Religious freedom must be protected;
• The Constitution was authored by the people, internalizing the Judeo-Christian philosophy to our political system,
• The people’s intent and understanding of the Constitution at the time it was written must be respected; and
• Ours is a government of delegated and limited powers, thus all government officials must respect the limits of their authority.

The bottom line for conservatives is freedom with self-responsibility: the rational ability of each individual Filipino to decide and act for himself/herself towards fulfilling his/her utmost potential.

Conservatives believe that what’s best for the Filipino is not a self-entitlement culture, not dependency on governments (Philippine or foreign), not a nanny State. Rather, it is to respect our personal responsibility and individual human dignity.

The Philippines needs a conservative movement, if only to counteract the progressive mind-set that proven so utterly damaging to our country.

We must elect a pro-family president

my Trade Tripper column in the 29-30 April 2016 issue of BusinessWorld:

This election campaign season unfortunately neglected the family.

Distractions (some necessary, some not) prevented the nation from putting in the needed time to discuss two really important issues.

And while debates abounded on national security, crime, unemployment, and inequality, the most important issues, one that actually encompasses all others due to their fundamental nature, were never raised.

Am referring, of course, to human dignity and the traditional family.

Princeton professor Robert George famously said there are three pillars to a decent and dynamic society. The third was about having “fair and effective system of law and government.”

This is a matter commonly known to most Filipinos.

However, what we disastrously fail to realize is how important the first two pillars are to the rule of law. These are “respect for the human person” and “the family” (i.e., that based on the commitment of a husband and a wife).

Regarding the human person, George notes that a “society that does not nurture respect for the human person -- beginning with the child in the womb, and including the mentally and physically impaired and the frail elderly -- will sooner or later (probably sooner, rather than later) come to regard human beings as mere cogs in the larger social wheel whose dignity and well-being may legitimately be sacrificed for the sake of the collective.”

Measures such as euthanasia and abortion (as well as the extrajudicial killing of criminals) obviously do not help in advancing respect for the human person.

Regarding the family, without it “there is no transmission of the virtues which underpin society and which also ensure respect for human dignity. Political and legal institutions cannot function without people who respect the fundamental virtues that bind society.”

The importance of the family cannot be overestimated.

Research by Wilcox, Lerman, and Price for the Institute for Family Studies “shows that states with higher levels of married parenthood enjoy higher levels of growth, economic mobility for children growing up poor, and median family income, along with markedly lower levels of child poverty.”

The impact of the family on the economy is so strong, in fact, that it is a better predictor of economic health than the population’s “educational attainment.”

Harvard economist Raj Chetty backs this up, saying that “the strongest predictors of upward mobility are measures of family structure.”

Family Research Council’s Patrick Fagan was more direct: “No matter which way you look at it -- through the lens of income, savings, or poverty -- marriage is the great engine of the economy, with every household a building block that either contributes or takes away, millions of times over. Put all these families together, and we have the team that runs the American economy.”

Even more direct: “The foundation for a productive household begins with marriage”. “Cohabitation does not take the place of marriage, and there are very strong indications that cohabitation may rival single parenthood as the largest generator of child poverty, while divorce is the cause of most women and children entering poverty in any given year.”

Much was made this election season regarding crime. What was incredibly missed was how taking care of the traditional family structure could go a long way towards a solution.

The Atlantic’s Kay Hymowitz pointed out that 70% of youths in prison “did not grow up with both parents.” An even starker study found that only 13% of criminal juveniles “grew up with their married parents.”

Finally, referencing a study by Cynthia Harper and Sara McLanahan: “The bottom line is that there is a large body of literature showing that children of single mothers are more likely to commit crimes than children who grow up with their married parents. This is true not just in the United States, but wherever the issue has been researched.”

The desperation caused by the breakup of the traditional family structure was famously summed up -- ironically -- by Barack Obama:

“We know the statistics -- that children who grow up without a father are five times more likely to live in poverty and commit crime; nine times more likely to drop out of schools and 20 times more likely to end up in prison. They are more likely to have behavioral problems, or run away from home or become teenage parents themselves. And the foundations of our community are weaker because of it.

More than corruption and more than any other issue, to protect the family is a matter of national survival.

Unfortunately, we have candidates who, unknown to many, have filed bills or advocated measures that experience taught are extremely damaging to the traditional family structure.

These involve contraceptives, euthanasia, same sex marriage, divorce, and the not so well thought through Sexual Orientation and Gender Identity.

In the remaining days of this campaign, Filipinos are urged to grab the opportunity to make its vote one that protects human dignity and the traditional family.

Now, more than any other time in our history, we desperately need a pro-family president.

Make international trade an election issue

my Trade Tripper column in the 15-16 April 2016 issue of BusinessWorld:

International trade in what is practically wholly an election year for the United States (and the Philippines) remains an uncertainty. Trade growth is expected to shuffle along at 2.8% this 2016, thus representing no movement at all from last year while at the same time hardly giving confidence as to the direction for this year.

World Trade Organization Director-General Roberto Azevêdo admits to the “disappointing rate.” Such will “be the fifth consecutive year of trade growth below 3%. Moreover, while the volume of global trade is growing, its value has fallen because of shifting exchange rates and falls in commodity prices. This could undermine fragile economic growth in vulnerable developing countries. There remains as well the threat of creeping protectionism as many governments continue to apply trade restrictions and the stock of these barriers continues to grow.”

Nevertheless, the WTO is hopeful that “imports of developed countries should moderate this year while demand for imported goods in developing Asian economies should pick up.”

Such should be good news for the Philippines, which needs it. Exports went down 3.9% (year-on-year) to $4.19 billion as of January this year, representing the lowest value in three years and the 10th consecutive month of decline.

That amidst a record trade deficit, with January 2016 posting $2.64 billion shortfall vis-à-vis 2015’s $40.86 billion. Place that within the context that our imports are at highest levels for the past five years.

A substantive reason for the trade deficit is China.

Despite increased trade to the US, EU, and Japan, the Philippines suffered a decline of $405.65 million (8.6%), to a country that represents 9.7% of our export trade. ASEAN sales went down as well by $630.02 million (9.5%), which hurts as it represents 15% of our export destination.

Couple the foregoing with the fact that the Philippines placed only 7th among ASEAN countries in foreign direct investment (at least for the first half of 2015). The country was able to grab only a 6% share of the FDI’s for the region, with nearest competitor Vietnam achieving almost triple (17%) that. The top FDI getter for that same period was Indonesia (31%). In effect, the Philippines was able to edge out only Cambodia, Laos, and Brunei (with a total share of 3%).

Now, a trade deficit alone doesn’t necessarily mean a bad economy (with the concomitant unemployment). But the other factors that should compensate for it aren’t kicking in as well. The low FDI level is therefore significant (mirrored in our atrociously pathetic tourism rate). Another is this government’s inability to jack-up infrastructure spending.

But this being an election year, the villain inevitably becomes international trade. One sees this, for example, in Mar Roxas’ rejection of the Trans-Pacific Partnership (TPP), which he goes to the extent of calling “dead.” But that position, at least as reported in the newspapers, is a bit simplistic.

First of all, the TPP is not dead (all political rhetoric to the contrary).

While it may not take precedence this year in the US (all normal politicians predictably avoid honestly talking about trade during campaign seasons), the fact is that the member countries signed it and just duly biding for the opportunity for their domestic constitutional processes to confirm it.

And while the TPP may pose problems for the Philippines, it’s not with agriculture. If there is something in that area to worry about, it’s Vietnam (a TPP member) pulling past the Philippines on agri exports.

No. The big problem with the TPP is its Investor-State Dispute Settlement System. Add to that our long refusal to be competitive. Both of which I wrote about previously.

The fact that the TPP has been put on hold, specially for the US, should make us think that it gives us time to better prepare for it but not to dismiss it.

As for competitiveness, one big area that really needs reform is the rule of law. The 2016 Index of Economic Freedom rates us quite low in that regard (property protection is 30/100; corruption at 38/100).

The other is “ease of doing business,” which deteriorated in the past year. The World Bank Group report for 2016 sees the Philippines ranked 103 (from a previous 97) out of 189 countries. In terms of ease of starting a business, we ranked 165. Which isn’t surprising as our government requires at least 16 major steps and around 30 days to legally create a start-up.

To sum: voters would do well to demand from the candidates their honest views on international trade.

Rather than pandering to the old mercantilist/protectionist view, we should encourage and support politicians that take the mature position of leading the country towards a system proven to be the best at generating income for all, as well as being an important factor in removing domestic inequalities.

Provided, of course, that the necessary competitive measures within the country are not hindered by petty politics or leftist ideologies.

Bobo Hard: With a Vengeance!

my Trade Tripper column in the 8-9 April 2016 issue of BusinessWorld:

Perhaps it was ever thus.

But it’s also possible that while the world may have always had the walking braindead around, at least they never -- from what I can glean from history -- been placed (or themselves presumed to be deserving of being placed) in a position to publicly speak out, teach, or govern.

Until now.

I blame “my bad” for all this.

I hated that phrase the first time I heard it. Behind its seemingly harmless admission of fault is an assertion that the speaker should not be held accountable for his/her wrongdoings.

“My bad” would spawn in the Philippines idiocies like “nosebleed”, “pabebe”, “dami mo namang alam”, and the apparently presidential (who knew?) “eh di wow.” All designed to stop any further thought on anything.

For what purpose? To free up more time for people to stuff themselves with food? And post selfies on Instagram?

David Hopkins (in his March 22 Medium article) accuses the TV show Friends for people’s dumbification. I agree. Except on the fact that it was not only Ross but also Chandler that was the victim of his friends’ (specially Rachel’s) idiocies.

Remember: Chandler was a smart, quick-witted, well read, up and coming corporate executive. Then he burned out and in that state (to many a glee) married Monica (who -- quite typically -- at their own wedding, was only self-centeredly concerned that nobody steal her “thunder”).

But it was the Ross-Rachel thing that exemplified everything that’s wrong with Friends. And the world today.

In particular, that incredibly stupid and drawn out “we were on a break!” shtick.

As usual, Rachel would get her way (Ross, in the end, after all, marries her). But what was particularly galling about the “we were on a break!” thing was that it was Rachel who demanded the break, making Ross reasonably justified in taking her word.

But logic is so uncool.

Rachel dictated and the world followed, thus from now on: words mean nothing, reason is worthless, emotions and not facts matter.

What’s important (and what reality is) is what “I”, at a specific moment that “I” alone decide, would be feeling.

Oh, and by the way, you must psychically know in advance what it is “I” may feel.

Utterly. Insanely. Moronic.

If that’s the case, then why bother having schools? What is learning for? Why the need to self-improve? To look good in selfies?

And the world has been “Rachelfied”, particularly politics: in the US, Donald Trump would infinitely vulgarly confusedly reverse himself yet his supporters wouldn’t care. Why? Because they’re upset!

In the Philippines, Rodrigo Duterte can actually outdo Trump in flipflopping incoherence (i.e., won’t run/ran; extrajudicial measures against criminals/rule of law, etc.). That was blithely justified as merely a mark of his being “makatotoo.”

Grace Poe under oath rejected Philippine citizenship. No problem! Why? Because she’ll continue her father’s legacy. Which is what, exactly?

Yet, the whole thing is just the logical extension of the past six years.

If it’s true that “we vote who we are,” then who we are is a shuffling, chain-smoking, self-indulgent, intellectually incurious, academically mediocre, professional nobody, propped up by rich parents.

However, that again doesn’t matter. Because it’s Daang Matuwid!

In a world where a Justine Trudeau, Barack Obama, Shinzo Abe, Lee Hsien Loong, David Cameron, Xi Jinping leads, who do we have to show?

It’s as if in 2010 the people who can’t read serious books without going comatose or can only uncomprehendingly hear “bwa bwa bwa” from their math teacher suddenly decided it’s their time now, rose up, and collectively roared (Sparta-300 style): “Sampalan na lang ng payslip!”

It’s not only Friends and media to blame. Academics too.

Borrowing from Lee: there are some, against all common sense, who just “argue the contrary for the purpose of getting (or reminding people they have) a PhD.”

And the lunacy spouted nowadays by those who should know better is unbelievable.

Bruce Cole, for Public Discourse (February 2016), gives an example of progressive professorial gibberish: “See the new scholar subject as a performative of passionate singularity, hybrid materiality and networked relationality. This is one sense in which the humanities scholar that is becoming is possibly posthuman, and a posthumanist scholar.”

But, I still hope.

Thus encourage the young to read more.

More importantly, to actually understand what they read. And even more importantly, to act consistently with what they’ve thought of after reading.

Don’t bother wasting time reading to impress in cocktail parties. Anyone being impressed with you there is likely pretentious or shallow.

Learn for learning’s sake.

And while Hopkins and myself can’t prove the connection: people should really buy less.

Consumerism makes people more stupid. I encourage the youth to do more with less, be proud of less, to not have their identity equated with gadgets, clothes or cars. Learn self-control and value delayed gratification.

And remember: you’re special only if you achieved something special.

And above all: think!