GLOBALIZATION,
INTERNATIONAL TRADE AND UPLAND RESOURCE USE
by
Antonio C. Antonio
March 2,
2014
For over
thousands of years, humans have interacted over long distances.
Adventurism, expansionism and trade have brought man across land and ocean for
new socio-economic and cultural discoveries. Roads to foster easy access
to trade routes were built earlier by the Romans, Greeks and the more advanced
countries in Europe. In the “Old World” of the 15th and
16th Centuries, the Silk Road provided a route that connected
Asia, Africa and Europe in an exchange of products, goods and services.
Europeans, with the invention of maritime vessels particularly the iconic
galleon of the “Galleon Trade”, started crossing the Altantic Ocean with the
same trading enthusiasm. This eventually expanded to the “New World” or
the Americas in the 19th Century. The “Old” and “New
Worlds” fused in a worldwide trading commerce. The invention of the steam
engine, railroad and new forms of transport such as the airplane brought man
even closer in spite of their distance to one another.
The 20th Century
saw the dawning of the “Space Age” where man started conquering outer
space. Parallel advancement in telecommunications brought about
development of modern means of communications such as the mobile phone,
computers and the internet. From the inefficient telegraph, the telephone
provided easy and efficient communications throughout the world. This
access to modern technologies connected billions of people all over the world
in a frenzy of exchanges… cultural and socio-economic. e-Commerce was
born.
e-Commerce
provided man with the luxury of staying in his place and effectively trade with
a business associate on the other side of the world. Governments, in an
effort to cope with the changing trading and commerce landscape, started to
bond together in mutually beneficial agreements which gave birth to
“globalization.”
Globalization
refers to a process by which different countries fuse together in a synergistic
exchange of worldviews, ideas, culture and products (good and services).
This process generated interdependence among member-nations in the fields of
economic and cultural activities. The term “globalization” has been
increasingly used since the 1980s. By 2000, the International Monetary
Fund (IMF) identified four basic aspects of globalization:
1.
Trade and transactions;
2.
Capital and investments movements;
3.
Migration and cross-boundary movement of people; and,
4.
Technology, information and knowledge sharing.
The
General Agreement on Tariffs and Trade (GATT), which started in 1948, provided
the framework by which the World Trade Organization (WTO) proposed to regulate
trade among its member-nations. The WTO officially commenced in January
1, 1995 under the Marrakesh Agreement with the following mandate:
·
Regulate trade between member-countries;
·
Provide a framework for negotiating and formalizing trade
agreements between member-nations; and,
·
Provide a dispute resolution mechanism aimed at enforcing the
participating countries’ adherence to WTO agreements.
The
basic purpose and aim of the GATT is to reduce the tariffs and duties of
individual member nations to stimulate more international trade.
Several
rounds of discussions on concerns from WTO-member countries have already been
made. Starting with the Uruguay Round of 1986 to the Doha Development
Round of 2001. Prior to the Uruguay Round, several other conferences were
called to fine-tune existing WTO policies beginning with the Annecy (France)
Round in 1949 to the Tokyo (Japan) Round in 1979. The calling for regular
international conferences (Rounds) by the WTO became necessary to assess the
current economic landscape among member countries. With each Round, focus
is made on the protection under-developed and developing economies.
On the
Philippine neighbourhood front is another multi-lateral trade association
called ASEAN or Association of South East Asian Nations. The ASEAN Free
Trade Agreement (AFTA) is an agreement among ASEAN-member nations signed in
January 28, 1992 which supports the region’s manufacturing sector. The
following were original countries who signed up in the AFTA; Brunei, Indonesia,
Malaysia, Philippines, Singapore and Thailand. Vietnam joined in 1995,
Myanmar and Laos joined in 1997 while Cambodia joined in 1999. At present, all
ten ASEAN-member countries have signed the AFTA.
The
primary objectives of AFTA focus on:
·
Increasing ASEAN’s competitive advantage and edge as a production
area in the world market by eliminating or minimizing tariffs and non-tariff
barriers; and,
·
Attracting more foreign direct investments to ASEAN.
To
increase the competitive advantage of ASEAN, a Common Effective Preferential
Tariff scheme was adopted by its members. This scheme gives ASEAN nations
free and affordable access to products and services offered in the region.
The
ASEAN Economic Community (AEC) will be upon us soon (2015) and it seems
inevitable that ASEAN integration will come to pass. And there really is
reason for us to be apprehensive about this. It should be noted that
most, if not all, regional grouping of countries are more often dominated by
the stronger economies. The weaker states are normally benefitted only by
the crumbs from the table of the more economically advanced countries.
ASEAN is
made up of 10 countries. If we ranked them, the first five should be (1)
Singapore, (2) Brunei, (3) Thailand, (4) Malaysia and (5) Indonesia while the
bottom half should be (6) Vietnam, (7) Cambodia, (8) Philippines, (9) Laos and
(10) Myanmar. From this rough positioning, it is easy to determine that
Singapore, Brunei and Thailand will be the dominant members with Malaysia,
Indonesia, Vietnam and Cambodia still exercising some degree of influence while
the bottom three --- Philippines, Laos and Myanmar --- are the bit players… in
Tagalog: “Susunod-sunod lang sa agos.”
It’s
always nice and ideal to be part of a regional group… but it would be a lot
better if we come in from a position of strength and dominance? Of
course, the official line will always be that such grouping is necessary for
the stronger members to help the weaker members. But that is,
unfortunately, a myth. Take Singapore for example… it is the smallest
member state to ASEAN, lacking in natural resources compared to other member
states, just a trading post in Southeast Asia, but the most progressive and
financially stable in the region. It is hard to believe that Singapore,
together with the other “first five” members, will not exploit the organization
to their advantage.
Aside
from regional economic strength that is supposed to be the prime consideration
for membership to AEC, there is also the aspect of regional security.
Unfortunately, again, the Philippines is at a disadvantage because of its weak
and non-dominate position. The West Philippine Sea dispute with China is
a good example in this case. ASEAN member countries are not too keen on
taking our position in this controversy. Why? Simply because they
are also afraid to cross swords with China who is also their major trading
partner. So… what is ASEAN or the AEC for if it cannot share the concerns
of its members? Would ASEAN also take the luke-warm position against China
if it were Singapore, Brunei or Thailand that was in a territorial dispute with
China? Your answer is as good as mine.
So what
do we have? Is our membership to ASEAN and AEC a mistake?
Certainly not! But we should look at our strengths and weaknesses first
before we look into our opportunities and threats… a simple SWOT analysis
perhaps. It should be noted that Opportunities and Threats are part of
our external environment while Strengths and Weaknesses are our internal
environment… and between internal and external environment, our internal
environment is something we have most control of. With this in mind, I
therefore say that we should first look into and focus on our internal affairs
(the management of our economy, socio-cultural wellbeing, political and societal
reforms, basic freedoms, education, etc.) before we extend our concerns to our
neighbors. With 2015 just around the corner, time is not enough… but we
could always start now and (perhaps) be more active in ASEAN affairs in a
position of strength and influence.
Another
contemptuous issue is the balanced utilization of natural resources.
Environmental concerns in the international community of nations have risen to
higher levels in the past three decades. Global Warming and Climate
Change are now the priority concerns of everyone. And everyone would like
to hold on to the natural resources available in their respective countries in
reserve while importing natural resources from others. The more dominant
and economically advanced countries are feeding on the inability of weaker
economies to compete in the world market. On the other hand,
underdeveloped and developing countries have nothing to offer but their natural
resources in a bid to industrialize and improve their financial position.
The effects of this trading condition will only felt in the long term… when the
poor economies find themselves poorer with the depletion of their natural
resources. The most often abused natural resources are forest and mineral
resources. Although forest resources are renewable, mineral resources,
however, are not.
Globalization,
international trade and utilization of natural resources should be balanced and
treated with the same focus and concern. Whether we are talking of the
bigger (WTO) or the smaller (ASEAN) picture, policies, plans and programs
should be balanced in such a way that weaker economies are given a fair chance
of competing with the more advanced economies. Predatory conditions and
interests must be eradicated for globalization to succeed in the long term.
If not, individual economies would prefer to close their borders to
international trade at some point.
Just my
little thoughts…
REFERENCES:
·
Globalization (http://en.wikipedia.org/wiki/Globalization)
·
General Agreement on Tariffs and Trade (http://en.wikipedia.org/wiki/General_Agreement_on_Tariffs_and_Trade)
·
World Trade Organization (http://en.wikipedia.org/wiki/World_Trade_Organization)
·
Asean Economic Integration
(http://www.rappler.com/world/regions/asia-pacific/39481-apb-survey-asean-economic-integration)
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