WTO, FTAs: Instruments of imperialist domination

Launching Forum of NO DEAL! MOVEMENT AGAINST UNEQUAL AGREEMENTSQuezon CityNovember 9, 2007IBONIBON

FoundationFoundation

Philippine poverty and backwardness

• Widespread poverty

• Worsening inequality

• Agricultural and industrial backwardness

• Overly reliant on cheap labor export, foreign capital- and debt

Filipinos aspire and struggle for development

• For:– true agrarian reform – genuine national industrialization

• Against: – imperialist domination of the economyimperialist domination of the economy

• exploiting cheap labor, plundering natural resources and dominating our markets

– exploitative international exploitative international economic dealseconomic deals

• multilateral WTO agreements• bilateral free trade agreements (FTAs),

regional trade agreements (RTAs), economic partnership agreements (EPAs)

• Go far beyond just “trade”Go far beyond just “trade” also investment, services, competition policy, intellectual property rights, labor, govt procurement, dispute settlement…

(1) FTAs deny us essential policies for development

To build domestic economy we need:

• Trade protection against imports to give local producers the opportunity to develop– Tariff/non-tariff barriers…

• Foreign investment controls to ensure benefits from FDI– Equity requirements,

domestic content, local hiring, technology transfer…

(1) FTAs deny us essential policies for development

Policies affirmed by historical experience:

• Used by all First World countries when they were developing– Britain, France, Germany, US,

Japan… (19th century-1950s)

• Used by handful of Third World countries which made any sort of economic progress– South Korea, Taiwan,

Malaysia… (1960s-1980/90s)

• Used by Socialist countries – Russia (1917+), China (1949+)

(2) FTAs impose policies that have already severely damaged the economy

• Philippines has been actively liberalizing trade and investment since the 1980s/90s– IMF-WB impositions,

WTO agreements…

• Arguably the most liberalized country in Southeast Asia… and also one of its poorest performing

(2) FTAs impose policies that have already severely damaged the economy

• Trade doubled as percentage of GDP :– 52% (1980) 105% (2005)

• Foreign investment quadrupled as percentage of GDP:

– 4% (1980) 14% (2005)

YET:

• Record sustained joblessness: – Unemplt 8% (1980) ~11% (2001-05)

– 12 million Filipinos looking for work/additional work (2006) OFW export

• De-industrialization and shrinking manufacturing

– Share in GDP: 26% (1980)23%(2005)

– Share in employment (11% 9%)

• Falling food production per capita, rising agricultural trade deficits

External Trade-Orientedness, 1949-2005

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500

1,000

1,500

2,000

2,500

3,000

1949 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004

Year

P b

illi

on

0

20

40

60

80

100

120

% o

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DPExports (P billion)

Imports (P billion)

Exports plus Imports (% of GDP)

JPEPA is unequal, defeatist and destructive

1. Grossly unequal– Backward Philippines gives up much more than advanced Japan

– Philippines’ deal worse than negotiated by Malaysia and Indonesia

Protected trade products

Protected investment sectors

Japan 239 items 16 sectors

Philippines 2 items 5 sectors

Malaysia (2005) 38 items 17+ sectors(plus Bumiputera policy)

Indonesia (2007) 835 items 40+ sectors

JPEPA is unequal, defeatist and destructive

2. Defeatist– Surrenders Philippine policy sovereignty,

prevents support for Filipino producers

• National Treatment, Most-Favored-Nation (MFN) Treatment, prohibition of “performance requirements” on investments

– Unprecedented protection for Japanese investors. “Investment” = FDI, portfolio investment + intellectual property, contractual rights, tax breaks (“taxation as expropriation”)

– Note: JPEPA includes “Singapore Issues” already rejected at WTO for being anti-developmental

JPEPA is unequal, defeatist and destructive

3. Destructive– JPEPA drastically restricts the Philippines’ policy

options: precedent-setting vis-à-vis Japan and sets a dangerous benchmark for other FTAs

• Note: Handful of FTAs makes WTO virtually redundant, where Japan + EU + US + Greater China + ASEAN = ~90% of country’s intl trade and investment

– Job losses in auto/auto parts assembly and iron/steel sectors, fisheries… toxic waste imports… commodification of nurses/careworkers…

– + Millions of jobs that will never be created because of stifled domestic development

• NO Deal! stands for democratic governance, economic sovereignty and building the national economy

• NO Deal! supports economic relations based on equality and mutual benefit

• NO Deal! rejects all unequal trade agreements which further undermine our already devastated economy– JPEPA, EU-ASEAN, RP-US, RP-

China…

Maraming salamat!Maraming salamat!