SUN REONG OK BS FOREIGN AFFAIRS – II INTERNATIONAL TRADE

The need of a better mode of understanding and negotiations to deal with global international rules
of trade pushed countries to come together and put GATT-WTO into work. Although one of its
objectives were to help developing countries to benefit fully from the global trading system, time
shows that this objective was a failure. Philippines, once known as ‘the ‘rice czar of Asia’ is now
crumbling in its agricultural sector and is now a heavy importer of rice. For 7 years the sad state of
the country grows worse.
Although trade liberalization is said to be an improvement on the allocation of resources and the
sustainability of economic growth and development, income inequality and poverty still remains
unsolved. The unrestricted or unregulated importation of rice, for example, has proven to be not only
affecting farmers, but also slowed down agricultural production, affecting the country’s economic
growth, according to the House Committee on Economic Affairs. The trend of consumers preferring
to purchase cheap and quality imported products has led local products going out of businesses or
contributed to the slowing down of the development of our agriculture and economic advancement.
Thus, the Philippines need to break away from the southern form of system and determine its path
through measures that suits the country. It needs to build a strong domestic foundation while
adapting international policies by diplomacy and quality interaction.
First, it is critical for Philippines to build alliance and exert meaningful influence in negotiations. It is
important to build a group to counter the bigger power who control the flow of goods. In order to
gain international or rather neighboring support, the Philippines must do extensive research and
make investments on domestic agricultural sector to build a strong foundation of domestic economy.
The failure to invest in farms, to market roads, farmer training, advanced agricultural techniques and
strategic irrigation facilities caused the sector to progressively lag behind relative to its ASEAN
counterparts
Second, private sector consultations for future negotiations should be a protocol for the government.
The consultative mechanism must be formalized, institutionalized and fully synchronized with the
government’s national interest and internal structure for handling negotiations. This interactive
system allows different sectors to learn the issues and intricacies of various proposals and have a
grasp of the impact of these proposals on their respective sectors. Both the government and the
private sectors should be able to analyze and prepare proposals and reject any regressive agreements
during negotiations.
Lastly, the Philippines should strengthen their FDI inflows and manage spillover effects in order to
fully activate the effects from using the TNC-dependent strategy. Compared to other ASEAN countries,
Philippines lags way behind those states that follows a TNC-dependent strategy. Despite the
dominant position of the Philippines in terms of output, the Philippine economy is relatively under-
performed than other ASEAN economies. There are a number of conditions to enjoy spillovers for the
host economy and one of them is the creation of industrial linkages between TNCs and local firms. A
number of previous studies report that TNCs’ local affiliates operating in export processing zones
tend to be disconnected with the local economy.
But before the numbers and theories, we must keep in mind that while we are here analyzing in our
comfortable well-lit environment, there are millions of farmers and their family starving. As Alfred
Marshall always inserts, economics should be studied with a cool head but warm hearts.