TRADE
LIBERALIZATION
by
Antonio C. Antonio
July 31,
2014
QUESTION: What would be the impact of liberalized trade
patterns on the Philippine forestry and upland sector?
The
Philippines is a member of a 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: (a) 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, (b) 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.
The
Philippines ranks second to the last in terms of remaining forest cover with
barely 25% left at present. Where does
this leave us now that we are at the bottom of the list in forest cover left in
the ASEAN community. It should be noted
that even if Singapore is last on the list, this country’s core competence is
international trade and would not at all be bothered by its lack of natural
resources. But the case of the
Philippines is different. Like most
underdeveloped economies, our only bargaining chip is our natural resources. But what do we bargain with if we don’t have
it (forest resources) anymore. How do we
now compete from a position of strength?
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 positions.
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.
There is
very limited number of economic activities in the upland. The industries involved in the upland are mostly
limited to agriculture, forestry and mining.
Agriculture takes a back seat too compared to mining and forestry. Most disturbed by mining and forestry
activities are the indigenous communities.
The ancestral rights of indigenous people are often violated in the name
of national development. Although there
is always a promise of a better life through employment opportunities, this is
more mythical than real. Indigenous
peoples, holding on to their old customs and traditions are often uneducated
and unskilled to land better-paying jobs in these industries. All there is for them to have are roughneck
type of work which often do not pay much.
When
trade of forest products is liberalized, the upland communities are just
peripheral beneficiaries… or often not benefited at all. Only the big business interests in the wood
industry (together with downstream businesses) are the primary
beneficiaries. This is also the case in
upland communities where mining is the main business activity. Philippine upland communities will have no
significant positive economic advantage with trade liberalization.
Just my
little thoughts…
(Please
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