PH free trade pact with EU means more damage to Manila economy says think tank
All Voices | May 27, 2011
PH free trade pact with EU means more damage to Manila economy says think tank
By John Lloyd Hoffman, Bb. Joyce Cabral, Himala dela Cuesta and Gerry Albert Corpuz
MANILA, Philippines — A Manila based think tank group on Friday warned the administration of President Benigno Simeon Aquino III on the serious implications the country might face if it enters into a one-sided bilateral trade pact with the European Union, which it said is currently rocked by economic crisis, financial woes and sky high public debts.
In an economic briefer sent to all voices.com, the renowned Filipino research and advocacy group IBON Philippines noticed that while trade officials will reportedly begin consultations among stakeholders for the proposed bilateral free-trade agreement (FTA) with the European Union (EU), the Philippine government should not abandon the country’s right to implement key development policy in favor of EU interests.
The group warned that as recovery from the global financial crisis remains fragile, the EU’s drive to liberalize global trade and investment and deregulate economic activities is intensifying, especially amid its increasingly problematic agricultural, industrial, services and financial sectors.
An FTA with the EU, the group said, will further open up the Philippine economy, restrict economic sovereignty and drastically reduce policy space and flexibility. The FTA will be particularly damaging for its World Trade Organization-plus measures such as greater trade liberalization in agriculture and industry, introduction of stronger intellectual property rights (IPR) protections, and expansion into the Philippines’ services and investments.
Only the EU will benefit from this and in effect, will be passing on the burden of adjusting to its crisis to the Philippines, IBON said.
In fact, a report commissioned by the European Commission in 2009 noted that the Philippines will see a “decline of the cereals and grains (mainly rice) sectors” and “reduced real income levels in rural areas” from an FTA deal. The same report also observed how “increased trade and growth benefited only parts of society, widening the gap between poor and rich”.
At the same time, it will be distressing for the country if the EU itself implements overt or concealed protectionist policies while the Philippines is forced to rapidly liberalize and strengthen investor protections. These will be all to the detriment of urgent Philippine development priorities and needs, said IBON.
Filipinos have witnessed their livelihood and social welfare deteriorate from decades of free trade, and it is time that government reconsider failed and reckless trade and investment liberalization so that it can begin working for genuine development, the research group said.
The Philippine government led by the Department of Trade and Industry is preparing to enter into formal talks for a bilateral trade deal with EU after concluding the Partnership Cooperation Agreement (PCA) in 2010. The PCA, which sets the framework and principles for an FTA, is said to be signed soon after EU countries approve the agreement.
Submit to Senate
The militant fisherfolk alliance Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya) urged President Benigno Simeon “Noynoy” Aquino III to submit the approved RP-European Union Partnership and Cooperation Agreement (PCA) to the Philippine Senate for deliberation either for rejection or ratification after officials of the Philippine government and European Union yesterday finalized the content the content of the bilateral trade agreement.
In a press statement, Pamalakaya vice chairperson Salvador France said the Aquino administration should follow the legal and constitutional processes required in sealing bilateral treaties with other nations such as the free trade agreement with EU.
“The treaty requires the full-blown deliberation and the concurrence of 16 senators of the incoming Philippine Senate. Mr. Aquino should not misrepresent the RP-EU bilateral pact as an executive agreement to escape Senate debate, approval or rejection,”
said France.
Last year an EU delegation led by Ambassador Alistair MacDonald said the new initialed the pact on June last year and the official signing was held on September or October of the same after the PCA text was translated into 22 other languages of EU.
The negotiations for the RP-EU trade pact which lasted about 18 months since the time of former President Gloria Macapagal-Arroyo, seeks to further advance the bilateral cooperation between the Philippines and EU in many of issues, including but not limited to political, security, counter-terrorism, trade and investment, development cooperation, education and culture, energy, transport, migration, and human rights.
The Philippines is only the second Southeast Asian country to complete negotiations on an updated PCA with the EU. The EU last year clinched a bilateral trade pact with Indonesia and was signed in November 2009. The EU is also in the process of clinching negotiations with Vietnam, Thailand, and Singapore
But Pamalakaya’s France said the 94 million Filipinos were all kept in the dark because the content of the RP-EU trade pact was concealed by the Arroyo administration from the public.
According to Pamalakaya, it was the EU which initially drafted the agreement and the Philippine government merely obtained a copy of the PCA on February 1, 2006 obtained a copy.
“If this is a joint partnership agreement, how come the content of the agreement is made and decided by only one party to the agreement which is the EU. Is this really a partnership agreement or an imposition from the powerful EU bloc,” the group said.
Copy of PCA denied
Pamalakaya said efforts to secure a copy of the partnership agreement but these efforts proved futile. “If our memory serves us right, former Rep. Satur Ocampo of Bayan Muna requested the office of Secretary Alberto Romulo for documents regarding the ongoing negotiations between the Arroyo government and the European Commission (EC) but his request was denied,” the group said.
“The Aquino administration and the 23 senators are constitutionally bound, legally mandated, politically and morally obliged to look into the impact and consequences of the PCA, which is currently being syndicated among top officials of Malacañang and the European Commission,” the fisherfolk group stressed.
Pamalakaya further asserted the Senate should not be caught flat- footed as in the case of the Japan-Philippines Economic Partnership Agreement, or Jpepa, where the Senate, the ratifying body, was kept in the dark in the early stages of the negotiations and was compelled to seal the agreement despite Jpepa’s all-out violation of national interest and the 1987 Constitution.
“If Jpepa is nightmare, the RP-EU partnership and cooperation pact is an across-the-nation tragedy that will soon hit this nation of impoverished and starving people,” Pamalakaya said.
“The real agenda of EU in orchestrating this biggest sell-out of the century is to pass the burden of their economic and global crisis to the downtrodden people of the Third World like RP,” the group added.
Foreign Affairs Undersecretary Edsel Custodio on February 19 released a foreign affairs statement dated February 9, 2009, on the draft RP-EU PCA, which was submitted by the European Commission on November 21, 2006.
Custodio said the Philippines had received from the EC the initial draft of the PCA on February 1, 2006. At that time, the PCA, consisted of two separate framework agreements: the main PCA document and the political elements on weapons of mass destruction, terrorism and the ICC.
In May 2006 then President Arroyo had met with then-EU Trade Commissioner Peter Mandelson and expressed the Philippines’ keenness on pursuing negotiations after thorough evaluation by the agencies of the Philippine government. In accordance with this directive, the DFA established the interagency process on the PCA.
Since then, according to Custodio, the draft underwent further revisions by the EC. The second revised PCA draft dated November 21, 2006, merged the two separate agreements of February 1, 2006, into one omnibus PCA. This version underwent a lengthy but thorough interagency process of over two years and involved around 30 agencies and offices of the Philippine government.
Interagency deliberations continued throughout much of 2007. Some issues-particularly the nature and rationale behind the PCA and its relation to the regional free-trade agreement-emerged that required further discussion. For this reason, the DFA and the EC held the first informal consultations on the draft PCA on September 24, 2007.
Interagency discussions intensified in frequency and deepened in analysis in 2008. The number of agencies involved in the PCA increased, while some sub-clusters were consolidated due to the interrelatedness and cross-cutting nature of certain provisions.
GerryAlbert is based in Manila, National Capital Region, Philippines, and is Anchor for Allvoices
