| Home Kapatiran
Links
Contact Us
Archive
Issue Number 23, November 2003
|
Kapatiran Issue
No. 23, November 2003
THE
WTO AND THE PHILIPPINES
- Teddy Casiņo
Delivered during the Conference on WTO, Globalisation
and War, Quezon City, Philippines February 28, 2003. The
author is secretary-general of Bagong Alyansang Makabayan
(BAYAN, New Patriotic Alliance). It was written before
the collapse of the WTO talks at Cancun, Mexico, in
September 2003. Ed.
Globalisation and war of aggression are two sides
of the same coin. Just as it is people power that is
keeping George Bush in check, so it is people power that
will effectively oppose globalisation.
Nine years ago, during the debates in the Philippine
Senate on the ratification of the country’s
commitment to the General Agreement on Tariffs and Trade
(GATT), the proponents of imperialist globalisation
boasted that membership in the World Trade Organisation
(WTO) would transform the Philippines into a newly
industrialised country.
The Promises
Among the promises of joining the WTO were the following:
• 500,000 new jobs a year in agriculture starting
1995;
• 587,000 new jobs a year in industry;
• an additional gross value added of 60 billion
pesos (US$US1.1 billion) a year;
• economic growth of at least 6% per year; and
• a significant improvement in poverty rates brought
about by the booming economy.
We have to ride the wave of globalisation, they said, or
else sink to the bottom of the ocean.
So what happened?
The Reality
Today, nearly ten years after ascending to the WTO, we
are faced with the following harsh realities:
• Over a million jobs have been lost in agriculture
alone, with 690,000 rural families thrown into poverty
since 1994.
• Unemployment is at an all-time high, with 4.9
million Filipinos jobless and 8.3 million having to go
overseas just to earn a living.
• From being a relatively self-reliant agricultural
producer, we have now become a net food importer. In the
four years immediately preceding the country’s entry
into the WTO (1990-1994), our trade in agriculture was
able to register a surplus of $USUS1.3 billion. But in
the four years that followed (1995-1999), this surplus
was wiped out and replaced by an accumulated trade
deficit worth $US3.5 billion. Rice imports, for one,
increased by 540% and corn by 520%.
• The country’s balance of payments deficit has
worsened, resulting in the 72% fall in the value of the
peso against the dollar from 1995-2000, and an increase
in foreign debt from 52% to 66% of the gross national
product.
• The promised growth was nowhere, as the annual
growth in the gross domestic product from 1996-2000
remains little changed compared with those of the
previous years prior to WTO membership.
• As expected, poverty worsened. The official
poverty rate is 40%, but independent estimates peg it as
high as 86%. As if that wasn’t bad enough, the
income of the top 10% of the population increased by over
23 times that of the poorest 10% in 2000 compared to 19
times in 1994.
Some of us may ask what exactly went wrong? Well, nothing
went wrong. Imperialist globalisation, after all, was
designed precisely to siphon resources from the
semi-colonies of the North and make them dumping grounds
for the excess products of the industrialised nations.
Globalisation was and continues to be imperialist plunder
wrapped in big bright ribbons.
In sum, our entry into the WTO has resulted in more
poverty and greater inequality brought about by the
destruction of local agriculture and industry, the
stagnation of the economy and its increased dependence on
foreign capital, debt and speculation.
Disastrous Effect On Agriculture…
The recent threats of the hog raisers to hold a food
blockade and the repeated pleas of our vegetable farmers
in the Cordillera and Ilocos regions to protect them from
the deluge of imported agricultural products are vivid
reminders of globalisation’s disastrous effects on
our local agricultural producers.
In the first year of our membership in the WTO, the
agricultural trade deficit of $US42.24 million almost
quadrupled to $US149.59 million in 1995. In 1996, it
quintupled to $US789.21 million, tapering off a bit to
$US764.23 million in 1997. This influx of cheap imported
agricultural goods - cheap because they are heavily
subsidised by their governments - has displaced local
farming.
In fact, industrialised countries like the United States
and the Euro area states continue to protect their
farmers not only through high tariffs but export
subsidies. While the rich nations demand the removal of
subsidies to agriculture, they themselves are increasing
their subsidies by up to 66% of the value of production.
In 1999, the agricultural subsidies of the rich nations
reached an average of $US1 billion per day. How can they
speak of free trade and a level playing field when they
themselves distort the market in their favor? This is
hypocrisy on a grand scale.
Added to this, agricultural products from the Philippines
have been subjected to unreasonable sanitary and
phytosanitary standards by our trading partners. The
United States, Australia, Japan and several European
countries have repeatedly used these non-tariff barriers
to block the entry of our tuna, bananas, mangoes, coconut
oil and other agricultural products into their markets (see
Walden Bello’s article elsewhere in this issue for a
very detailed critique of the WTO’s disastrous
impact on Philippine agriculture. Ed.).
… And Industry
In the industrial sector, local manufacturers are also
reeling from the influx of imported goods. Among the
industries affected are those involved in garments, bags
and footwear, tyres, cement, tiles, glass,
pharmaceuticals, steel, towels, lighting products,
batteries and even, would you believe, flour sacks.
In the footwear industry, the shoes imported from January
to October 1999 alone translated to lost job
opportunities for 26,000 workers.
In 1999, the country’s one and only integrated steel
plant, the National Steel Corporation plant in Iligan
City, closed down due to the massive influx of steel
imported from as far as Russia. This cost the jobs of
1,700 workers.
One major problem for our industries is the unfair and
one-sided tariff system that has resulted from years of
economic restructuring and obedience to multilateral
trade and finance agencies. On the average, tariffs on
our exports to developed countries are four times higher
than their exports to us. Take rubber shoes, which is
given a minimal 0%-5% tariff in the Philippines but
slapped a 20% tariff in the developed countries.
No question, globalisation has reared its imperialist
tentacles and gripped the Philippine economy by the neck.
Indeed, our entry into the WTO could be considered the
coup de grace, the killer shot to an economy already
ailing from two decades of neoliberal prescriptions and
the International Monetary Fund (IMF)-World Bank-imposed
structural adjustment programmes.
At that time, our country’s Harvard * and Wharton-
trained economic managers and technocrats, desperate for
a way out of the chronic crisis of our semi-colonial and
semi-feudal economy, clung to the rhetoric of the IMF,
the World Bank, the Asian Development Bank, Time,
Newsweek, CNN and the Group of Seven (G7).
Capitalism has triumphed over socialism, they said, and
globalisation signaled the end of history as we know it.
* Leading US universities. Ed.
A Neo-liberal Rampage
As usual, Philippine officials went overboard in lapping
it all up. In most cases, our liberalisation and
deregulation targets exceeded even our formal commitments
to the WTO. In 1996, for example, the Philippines hosted
the Asia Pacific Economic Cooperation (APEC) summit and
to show the world that Filipinos could ride the wave of
globalisation way ahead of the pack, the Ramos
Administration went on a rampage, unilaterally slashing
tariff lines and arbitrarily removing trade barriers and
measures meant to protect the local economy.
Today the Philippine economy is one of the most open in
the region and, I would surmise, the world. Our Import
Liberalization Program (ILP) and Tariff Reform Program
(TRP) was so drastic that 90% of our tariff lines have
already fallen under the 0-5% rate, way ahead of our
Southeast Asian neighbours. A year from now, this will
reach 97%. All these are way ahead of our commitments
under the WTO and the Association of South East Asian
Nations (ASEAN) Free Trade Agreement (AFTA).
In fact, while our neighbours have slowed down their
liberalisation programmes for some years now, we have
even accelerated ours. Congress is now deliberating a
proposal that would amend the Constitution to allow 100%
foreign ownership of land, 100% ownership of strategic
and vital industries, and the wholesale watering down of
the constitutional provisions on the national economy and
patrimony.
But while our Government officials took pride in ours as
being one of the most open and “globalised”
economies, they turned a blind eye to the reality that we
remained as Asia’s basket case. In a similar manner,
Argentina, Mexico and Brazil were heralded as the models
by the IMF and World Bank, right before their economies
collapsed.
Curiously, President Gloria Macapagal-Arroyo, the author
of the 1994 GATT-WTO bill, recently made a
well-publicised speech where she took a stand against
“unbridled globalisation”. Other official
pronouncements also seem to indicate a slight shift in
focus towards strengthening the local economy. Some say
she has seen the light. I say she simply can’t deny
reality.
AGILE Globalists Have Infiltrated The Government
This Government remains as committed to the WTO and to
globalisation as it was during the Ramos Administration.
The recent exposes about the USAID-funded lobby group,
the Development Alternatives Inc. (DAI) and its
Accelerating Growth, Investment and Liberalization with
Equity (AGILE) programme reveals the extent to which the
globalists have infiltrated the Philippine government.
The presence of AGILE offices and consultants in all
major trade and finance agency in the Government is
mind-boggling. That they were able to help formulate and
lobby for the approval of at least five crucial laws on
the economy is an indication of how influential this
US-backed lobby group is and how their interests jibe
with those of the local ruling elite.
From 1998 to the present, AGILE had a big hand in the
Intellectual Property Rights Code, the Omnibus Power Law,
the Anti-Money Laundering Law, the Electronic Commerce
Law, the Anti-Dumping Act, and the Plant Variety
Protection Bill - all instruments to further the
neo-liberal agenda of globalisation. That Mrs Arroyo has
come out defending AGILE and its pro-US agenda speaks so
much of her failed leadership.
In the final analysis, it is the people’s movement
that it is our only hope. The bureaucracy and the
economic and political elite that run it are hell-bent on
pursuing the globalist agenda, just as they are hell-bent
on pursuing the militarist agenda of the US and other
imperial powers. This is what we are up against. And this
is what we should unite on.
To conclude, let me say that globalisation and war of
aggression are two sides of the same coin. Just as it is
people power that is keeping George Bush in check, so it
is people power that will effectively opposed
globalisation.
Go to top
|
