From the pens of dead men

There is a book and incidentally a thought going around now reminding people that Western ideas and values were not spread due to their superiority or truth but due to the fact that Westerners were simply more adept at organized violence. A BBC documentary and a biography on Lord Nelson essentially admits to this, at least as far as the British are concerned. People here should realize that, far from the corporate governance, ethics, and democracy spouting people they see in CNN, the British (and most of Europe, including France and Germany), America, Japan, and China arose from a culture of killing. Of course, they perhaps prefer the term warrior culture. Essentially, it's still about killing.

Among the people they killed, humiliated, or conquered were of the Philippines.

The arrogance of these people, the bullying by which they thrived, can be read in Nick Joaquin's book Manila, My Manila. The day "the Manila of Soliman became the Manila of Legazpi", 19 May 1571. That day Miguel Lopez de Legazpi took formal possession of Manila by holding his sword in his hand and yelling "in a voice of fury,

'I have founded the City of Manila in the name of the King. If there be any there who would challenge this, let him come forward and I will measure my sword with his.'"

Of course, none of our forefathers came forward. Rajah Soliman and his men all having been soundly beaten. Repeatedly. This is the culture that we have to contend with, engage with.

So we keep trying. We keep fighting, in one way or another, for our right to be recognized as a people. Gregorio Del Pilar, on the day he died at Tirad Pass, wrote in his diary:

"I realize what a terrible task has been given me. And yet I feel that this is the most glorious moment of my life. What I do is done for my beloved country. No sacrifice can be too great."

He was a young 24 year old. Hopefully, the youth reading his words today would be inspired to be what they are and be Filipinos.

Fresh and stunning too are the words of Fr. Horacio de la Costa SJ, writing in 1971, of the place nationalism has - in the proper and correct sense of the word - in what could be made to apply in today's globalized world:

"We are told, of course, that this ideal is hopelessly out of date. Why cultivate nationalism in a world rapidly moving toward internationalism. If we must dedicate ourselves to an ideal, let it be to the brotherhood of man. As to that, we can readily agree that an international organization within which all men can live as brothers is a consummation devoutly to be wished. But we might point out that the very word 'internationalism' presupposes nationalism. If nations are to be united, there must be nations to unite. Those who have already achieved full nationhood can afford to take their nationalism for granted, can even be highmindedly apologetic about it. But we who, having been colonial subjects for four hundred years, are still seeking national identity and purpose, may perhaps be forgiven if nationalism is uppermost in our minds and boringly recurrent in our conversation.

Would it be thought discourteous on our part if we were to recall that it was once said of England that patriotism was the religion of the English? And that it was not so long ago that American school texts prescribed for use in the Philippines quoted with reverence the dictum of an American naval officer, 'My country, may she always be right, but right or wrong, my country'?

That is not a principle we are prepared to defend. What we are prepared to defend is this: that if we are nationalists it is not because we wish to separate ourselves from the rest of men, but, on the contrary, because we wish to build up a nation that can make its own distinctive contribution to the general advancement of the human race."

On the last, I would have to disagree with Fr. De La Costa, for it always has to be my country, hoping that she is in the right, but right or wrong I side with my country. For what we are is that which we contribute to the world and the human race, and what we are is something that we must believe in. Thus, as screwed up, insane, ridiculous the circumstance that it may be in right now, still my country, always my country.

In any event, we do not have a dearth of history and men to look up to for guidance and inspiration. And we most certainly do not lack it in ourselves that which could make this Philippines of ours a nation.

Vox populi

Last Sunday, a columnist from the Philippine Star wrote:

"I disown the belief that vox populi, vox dei (the voice of the people is the voice of God.) If some of my Sigaw friends used the slogan, I am averse to such presumptions. This debate takes off from the widespread but false idea that this is how democracy works. It claims that democracy is morally right because the majority defines what is right and the government must follow the will of the people. "

Everyone, of course, has the right to his or her own opinion on this. The statement was made in a different context but I'd like to focus on such and tie it up with the main theme of this blog. The reason why the majority is given the right to decide is not because they are actually right but that they are given that presumption that they may be right because no other methodology has been devised to replace the majority rule. As Churchill would say, democracy may be flawed but it's the best we could come with so far. [In the context of the "People's Initiative" issue, one fundamental question before the Supreme Court is not whether the will of the people is to be questioned but whether the will of the people is actually properly being heard. Justice Guttierez's comment on the matter sums it best]

It speaks of the presumptiousness of the elite that they believe they know what's best for the people. That the masses would not have the intelligence to form their own opinion knowingly. If the majority of the people truly (emphasize "truly") believe that this country should go in a particular direction then - right or wrong - that is where we go. It may not be right, it may be based on faulty information or lack thereof but then the people should be allowed to determine their own destiny. Besides, who of us can say conclusively, who of us can argue with perfect knowlege and information, that such decision by the people is indeed wrong? Only time (and history) can tell. Or we can even go Biblical on this: "the race is not to the swift, nor the battle to the strong, nor bread to the wise, nor riches to the intelligent, nor favor to those with knowledge, but time and chance happen to them all". In any event, what can kind of leaders do we have if they don't have faith in their own people?

The rich has this belief that the people, the masses, should be saved from themselves and their ignorance, and thus a disregard of the vox populi dictum should be made because of that belief that the rich (the governing elite) are indeed the ones well read enough, informed enough, educated enough, to make the decisions for us. However, that is rubbish because if that were correct, considering that the Philippine elite has been in power continuously for almost the entire life of this Republic, we'd be a country right now economically at par with Singapore or Japan. It's this country's elite that got us in this mess and they still expect all of us to believe that they should be leading this country by sheer entitlement?

If the masses toy with the idea of electing actors and entertainers to political office it is because they are no longer left with a viable choice. Who are they going to elect, after all? Return the same old political names, albeit their younger versions, to power? If one reads our history from the 1920's, 30's, 40's, 50's, 60's, early 70's, late 80's, and the late 90's upward you'd be surprised at how the same names keep cropping up as office holders in Congress, the Judiciary, and the Executive Branch (and even media). And how the same problems keep plaguing us: corruption and inefficiency. And they expect us to believe that it is the ordinary Juan de la Cruz at fault? I strongly believe that the majority of Filipinos would know, consciously or instinctively, and vote for a good and effective leader when they see one. It's just that they haven't seen one yet.

I still refer readers to my entry below on Trade and the Elite regarding this matter. In addition, I am getting more and more convinced that the Marcos/Ninoy, Erap/GMA thing was simply a case of relatively "newer old money" versus really "old money". It's a perverse political rigodon. If it were really about democracy how come after all the People Powers that came and went we're still in this muck of corruption and ineptness? You can't blame the masses for this. Blame the people in power. And the people in power are all essentially cut from the same clothe.

Also, just thinking, I still can't understand what is meant by the term "good family" or "de buena familia". It may mean something long ago, in less civilized times, but in this day and age what possible meaning could it have? After all, if you don't have any druggie, pervert, or thief (private or in government) in your family, and if your family members study in school or actually work for a living and care for the family, wouldn't that make your family automatically qualify as a "good family"?

Rock against the WTO

Just this weekend I read in the Manila Times that a group of Filipino musicians (Radioactive Sago, Village Idiots, etc.) are to release an album in protest of the ongoing Doha Round and the WTO. The musicians say that they are against free trade and that, although acknowledging the inevitableness of globalization and the benefits that can be had through freer trade, nevertheless feel that on the whole the multilateral trading system has been damaging to developing countries.

Lourd De Veyra, the lead vocalist for Radioactive Sago, called for an end to "excessive globalization", citing the inability of poorer countries to break through the trade barriers imposed by richer countries, the damage done by the increased influx of imported garlic and poultry to our farmers, and the fact that subsidies of the richer countries are hurting the economies of the poorer countries.

Such comments are interesting.

First of, is that what is excessive globalization? How can globalization be excessive? If globalization leads to choice, then more globalization leads to greater choice, where can the excess lie? If the choice of people becomes greater, whether it be in consumer goods, essentials, information, lifestyle, where is the downside?

However, perhaps what is really being lamented is the fact that only the developed countries are reaping the benefits of globalization, with the poorer countries unable to get market access for their own products into the developed countries. If that is the case, logically, the response is to call for greater, better, and more globalization and freer trade. If the problem is lack of market access, it is hard to understand why the solution is to lessen the drive for more market access. The present Doha Round is precisely an opportunity for developing countries to increase its market access while at the same time calling for special and differential treatment. If the Doha Round fails, the developing countries would have itself to blame (the developed countries too for having failed to practice what they preach) but note that more is riding on the Doha Round for the developing countries than that for the developed. That is why Peter Mandleson and the EC are all for “lowering expectations”. The loss of a failed Round is not that as painful for them. Nevertheless, for all the stubborness of the developed countries and the inability of the developing countries to make a united stand for fairer trade, the point here is that it's still the WTO and the ongoing Doha Round that is the poor countries best chance for improving their economies. If there is any other rational, workable avenue that could make the developed, richer, and more powerful countries to concede to the poorer ones then those with such ideas should speak up.

De Veyra also mentions the influx of imported garlic and poultry. The fact here is that imported garlic that hurt the local farmers were not imported but smuggled. There is a whole lot of difference between importing and smuggling. The latter obviously is a crime, for which the country receives no tax benefits. However, it would also mean that the blame here is not free trade or the WTO, which did not make any demands from us to increase importation of garlic, but of our own police system and customs monitoring system. The WTO should not be blamed for our inability to police our borders.

With regard to poultry, the reason why there was an increase in importation of poultry was because the local demand exceeded local production. If there is not enough chicken to go around with, what's wrong with importing them? The point here is that if the demand greatly exceeds the supply, the prices rise and who gets hurt? The consumers and when we say consumers we're not only talking of the Ayalas and the Madrigals, we're also talking here of our poor who have to make do with so little. If they can get cheaper and better goods for their money, what's wrong with that?

The foregoing, it has to be said, goes for rice. Rice is a protected industry, despite what people think. And we import rice because the supply is greatly exceeded by local demand. One reason for the lack of supply is because our land (a little also because of lack of technology) is inadequate to produce rice on a scale necessary. The Philippines, for the past 100 years, has never been a rice exporter and has never attained self-sufficiency on rice. Except that is for a brief period, during the much hated Marcos regime and under the program headed by Rafael Salas. Note that the WTO again never demands that we import rice. We import rice because we have to. Even then, with the rice being imported, it must be considered that the Filipino pays among the highest prices for this basic staple. To emphasize: our poor pays higher prices for its rice compared to the poor in Indonesia, Vietnam, and most other Asian country poor. This is the effect of not considering "comparative advantage". Yet we protect rice, rightly or wrongly, for a host of political or social or cultural reasons. If we have to protect rice (and the same argument goes for sugar), then let’s protect the same, along with the thousands of farmers depending on such for their livelihoods. But let us also remember that in protecting these thousands we are also making millions of our poor pay more for their daily food.

De Veyra goes on to comment against free trade and subsidies. The fact is, subsidies have always been there, even before the WTO and even before the GATT days. One of the goals of the WTO and the present Doha Round is to precisely negotiate to get rid of these subsidies. To actually "rock" against Doha and then lament the presence of subsidies is something that needs to be ... re-examined.

Which goes on to a further point: trade barriers, non-tariff barriers, subsidies, and the like have all been there and existed even before the WTO came into being. The reason for the WTO's existence is precisely to have a forum and an avenue to get rid of these things and ensure a better playing field for poorer countries. Get rid of the WTO and what do you have? We go back to the days of power plays, covert but muscular negotiating tactics, of which I'm sure nobody in his right mind will think we can outmuscle the US (or the EC) on a one-on-one negotiation without the benefit of the WTO.

Is the WTO a tool of the US? Then how come in most of the significant cases that the US went up to in the WTO's dispute settlement process against poorer countries the US consistently lost? The US lost to Brazil on a pharmaceuticals case, thus allowing Brazil the right to reproduce medicines against AIDS. Just recently, tiny Antigua beat the US on a case relating to online gambling. If the WTO had not been around, would these poor countries have won over the US?

Finally, globalization and free trade has been blamed for the dreaded “homogeny” of culture. Of everything being Americanized. That is simply not the case and for a group that has benefited greatly from globalization to argue such is simply eccentric. Nobody has ever, at the point of a gun, forced you to drink Coke, eat curry, watch the Pink Panther, listen to Beyonce, or wear Nike. It is your choice and the great thing about this is that this choice has been extended to the poor of our society. One big example here is the liberalization of our telecommunications industry in the 1990s. Because of that simple fact, our maids, jeepney drivers, janitors, all have cellphones. Cellphones with which to call their loved ones in the province, call up their kids in school, exchange news and information, educate themselves informally, and perhaps even change governments they don’t like.

A student once told me that she was concerned that globalization is destroying the culture of our mountain tribesmen. That is, they are now leaving their farming work in the mountains, stopped living in huts, and are now living in apartments, watching tv, and drinking Coke. My answer to her was, if you think living in mountains and breaking your back under the sun is so great why don’t you do it? The point here is that these people had a choice. They weren’t forced to change their lifestyle. If that is their choice, then no matter how unwise or unintelligent their choice is, we should respect it and be happy for them. It’s all well and good for people to be tourists while in Baguio and see these mountain people for a few minutes to be entertained but these are people too, with their own lives. We have no right to dictate to anyone how they should live their lives in the same way we don’t want us being dictated to.

Definitely the WTO is not perfect. But so is democracy. They’re both messy and they certainly need improvement. But there is simply no rational alternative. Besides, as I mentioned in a previous entry, the WTO never forced us to do anything, it never even compelled us to lower our tariffs. Whatever we did in terms of trade policy, we did it unilaterally and voluntarily as a people. If it turned out now, in retrospect, that we made commitments more onerous than we had to then we only have ourselves (and our government) to blame. However, before we start going on the blame game, ask yourself also how come you didn’t engage in the debate, how come you weren’t aware, how come you didn’t read up on this stuff on something clearly important for the country? These things and discussions have been around, in papers in our schools, in the newspapers, in the internet. Perhaps the government may have been less than ideally transparent in the past but, in any event, what was then was then and now we simply have to act.

This blog has never advocated for protectionism as a general policy or as a guiding principle. Neither, however, will it advocate for a blind “one-size fits all" type of free trade. Actually, free trade advocates in this country have probably done an equal amount of damage as the advocates of protectionism. Both should stop with their dogmatism. As for this blog, what it believes is that freer trade is indeed the way for this country to move forward. But the shape or form of that free trade, like discussions on democracy and form of government, is something that should be geared to match our unique culture, personality, geography, history, etc. as a people, and with an eye to the realities around us.

What this country needs right now is a more open, intelligent discussion of what to do with regard to our economy and of our trade policy. It is important that discussions on these be less exclusive, open to all our countrymen and not merely confined to a select number of bureaucrats and academics. This thing is so important that if Radioactive Sago and their fellow musicians want to join in on the discussions then that is great and more should follow their lead and contribute. But we should all do this smartly, with discipline, precision and clarity of thought, detachment, and with tolerance for each other’s views. Perhaps releasing a rock album on trade is a good start for everyone to get involved. But it shouldn’t definitely end there.

Fog of trade

(remarks given on the occasion of the Feliciano book launch)

State of play

When the Uruguay Round of negotiations were contemplating the need for an international trade organization to oversee the various trade agreements being considered, a negotiation was specifically set aside to discuss the "functioning of the GATT system" and was given the acronym "FOGS". Out of this the WTO was created. Unfortunately, more than ten years later, what was deliberated under FOGS is still under a fog.

Two noticeable things that one can notice is the lack of certainty as to the future of the multilateral trading system. The other is a subtle creeping shift from an absolutist belief among supporters of trade liberalization to a more cautious and conditional stance. Thus:

“The countries that have succeeded in raising living standards rapidly, over long periods, have followed many varieties of economic policy and have lived under many different forms of government … Not fully, or even nearly so … They adopted liberal trade partially, selectively and mostly gradually. But the important thing was that they adopted it.” (Liberty’s Great Advance, 28 June 2003; underscoring supplied)

“It is true that the poorest countries often face the biggest obstacles to reaping the gains from trade and that economists' models often assume these obstacles away. Many rely on tariffs as a source of government revenue. Weak infrastructure and underdeveloped credit markets can make economic restructuring difficult. These problems underline why trade liberalisation is no substitute for either more domestic reform or foreign aid. They also suggest that some of the poorest countries need more time to open their markets than others.” (Weighed in the Balance, 08 December 2005; underscoring supplied)

Interestingly, while there has indeed been comment that poor infrastructure can result in the non-effectivity or mitigation of the benefits of trade, this recent statement from an article in the Wall Street Journal was intriguing:

"Many believe globalization will create a firebreak against inflation, but trade barriers have been in a steady descent for more than 70 years with no consistent bearing on U.S. inflation rates." (A Hard Landing, AWSJ, 3 Feb. 2006, p.13)

So there it is, a country as sophisticated and as developed as the US and still with an infrastructure not good enough for trade liberalization to substantively affect its inflation rate. If the US has been found wanting, then what country wouldn’t? Is trade liberalization indeed that powerful a force that could benefit countries and their peoples? There now seems to be a creeping doubt that it is.

Finally, there is also the refusal of the developed countries to practice what they preach. For but the most recent examples, witness the national furor that erupted when a foreign company signaled its intention to purchase a European manufacturing company, a similar national outrage when a foreigner bought a local European football club, when the lifestyle of a country’s farmers are given greater consideration than the lives of starving farmers in least developed countries.

All of these do not bring much confidence in the world trading system. Thus, if we could not find that confidence elsewhere, we should ensure that we instead develop that confidence in ourselves.

Moving forward

Here, then, are some suggestions:

First is the review of our trade related legislation, particularly seeking to remove any ambiguities in them and ensure that they serve national interest. Among such laws suggested to be reviewed are: RA 8752 (the anti-dumping law), RA 8800 (the safeguards law), Section 304 of the TCCP, Sections 401/402 of the TCCP, and RA 9135 (the customs valuation law).

Second is the institutionalization of private sector participation in the formulation of positions and the conduct of negotiations. The appointment of a Special Envoy for Trade Negotiations, the expanded inclusion of private sector parties into the trade delegation to the Hong Kong Ministerial, and the establishment of UACT (with its appreciably defined objectives) are good first steps in this direction.

Third is the institutionalization of hearings and proceedings that would lead to greater transparency and accountability in the conduct of trade negotiations. Among such would be the conduct of periodic and regular hearings in Congress to determine the state of our trade activities.

Included with this suggestion is the refinement of our rules to remove any ambiguity as to the need for our elected representatives to have a say in our entry into any trade agreement. This is specially with regard to the ongoing confusion regarding the classification of trade agreements into “treaties” (which need Senate concurrence) and “executive agreements” (which do not). Thus, new rules could be issued clarifying this matter so that any substantive agreement (and most trade agreements are substantive) will have to be submitted to the Senate for its concurrence. This is but right as our elected representatives need to have a say as to whatever trade commitment the Philippines is entering into.

Another is for the government to lay down publicly, in writing, a detailed draft of what our trade policy actually is. Not only would it result in informing the public as to where the government intends to bring us in terms of trade, it would also give the most affected stakeholders (which is us, the private citizens) the opportunity to speak out on the wisdom of such policy.

Fourth is the creation of the office of the RPTR. This should not necessarily be a huge bureaucratic creation, at least at the outset. When the USTR was created in 1962, its legal counsel’s office was composed only of two men (one of whom happened to be Robert Hudec, one of the acknowledged fathers of international economic law). Incidentally, when the USTR was created, the reasoning of the US Congress that created it in 1962 was that trade policy should not be entrusted to the State Department (which it is said looked out for the interests of foreigners or broad foreign policy goals) or the Commerce Department (which always looked out for narrow domestic political interests) but rather to have an office that would take the middle and have trade as its only mission. For the RPTR, it is ideal that the same be peopled with professionals of diverse backgrounds: diplomacy, law, economics, finance, etc. Such an office would have the function of taking the lead in dealing in matters involving Philippine engagement in the WTO, AFTA, APEC, and UNCTAD, as well as dealing with issues brought about by prospective or probable bilateral or regional trading arrangements. It has to be the primary source of information on matters dealing with international trade and, at least with regard to issues arising principally from trade negotiations, be responsible directly to the President.

Finally, there is the need for the enactment of an effective competition policy law. Competition policy, in its simplest form, primarily deals with the state of competition internally, that is, with regard to the state of competition within a country’s borders and seeks to rid of harmful monopolies, cartels, and other anti-competitive practices. Furthermore, in a country where it is commonly acknowledged that the nation’s wealth is concentrated only in the hands of a very few, a robust competition policy would be one way of ensuring a more equitable distribution of wealth and, perhaps, a more meritocratic society. Competition policy can help in ensuring greater competition, efficient market conditions, more adaptable industries, promote the easier and more effective entry of new players in the market, greater quality goods entering that market, and price stability.

In fine, considering, the present state of the multilateral trading system, it is suggested that we prioritize in employing our public and oft-times called for united energies and efforts towards reorganizing and making our house in order. This is not a call for us to be isolationists or protectionists. Rather, it is so that we can develop a strong and deliberate base within which to move out and confidently engage our trading partners.

Thank you and I think I shall stop here.