[asia-apec 45] An Appeal to the Senior Officials of the Asian Governments in APEC

[daga]

From: Philippine Peasant Institute <omi.apec at gaia.psdn.iphil.net>
Subject: MPFA paid ad [Philippine Daily Inquirer, August 22, 1996]

AN APPEAL TO THE SENIOR OFFICIALS OF THE ASIAN GOVERNMENTS IN APEC

"Stop Washington and Manila from Undermining the Osaka Action Agenda!"

We would like to call your attention to two disturbing developments:

	•  the continuing push by US to turn APEC from a consultative group into
                 a free trade area;  and,
	•  the host government's active collaboration with the US and APEC's
                 free trade lobby in moving towards this goal.  

Washington's Continuing Goal: APEC as a Free Trade Area
   
At the meetings of senior officials and trade ministers in Cebu and
Christchurch earlier this year, and now in Davao, the US has insisted on the
submission of “solid,” comprehensive, and detailed liberalization plans that
will be harmonized using the criteria of “comparability” and “transparency.”
Washington’s strategy is to get a firm base of comparable country
commitments against which future performance will be judged and which will
later serve as the basis of a free trade agreement.

This behavior is driven primarily by Washington’s  twin goals of  turning
its current $120 billion deficit with the major economies of East and
Southeast Asia into a surplus and reestablishing a significant trade and
investment presence in a part of the world that has steadily slipped from
the US economic orbit. Despite Malaysian Trade Minister Rafidah Aziz’s
assessment that an APEC free trade area is a “dream,” APEC’s largest economy
continues to actively pursue the latter.  

Manila Departs from the Asian Agenda

As the experience of Blake Island, Bogor, and Osaka underlined, the  role of
the host government is vital in determining the direction of APEC.  It is
disconcerting to note that the Philippine government is departing from the
principles of Osaka. While the Osaka Action Agenda approved in November 1995
has many flaws, it nevertheless enshrines several principles that run
counter to the Washington-Canberra campaign to turn APEC into a free trade
area.  The Osaka Declaration asserts that trade liberalization must be
flexible, voluntary, and non-binding.  It  expressed the Asian governments’
view that APEC move away from its focus on trade liberalization by affirming
that economic cooperation, or aid, is just as central a pillar of APEC as
liberalization.

We are alarmed in particular by the following developments:

        •  First, contrary to the Asian government’s consensus that APEC
           should remain a consultative group, the Philippine government’s
APEC team 
           has said that it is working for the “establishment of a free
trade area by the              year 2020.”
        •  Second, the Philippines’ APEC team revealed that the host will “lead 
           by example,” by adopting a program of unilateral, blanket  
           liberalization that will reduce all Philippine tariffs to no more 
           than five per cent in the year 2004, and urging its Asian neighbors 
           to adopt a similar strategy. As President Fidel Ramos himself has 
           said, “We must blaze the trail that others must follow.”
        •  Third, the government’s APEC team has stated that it will actively
           urge the Philippines’ neighbors to submit “detailed and 
           comprehensive  plans to open their markets,” which it will then take 
           the lead in  harmonizing, or making “comparable and transparent.”  
           This subverts the Osaka principle of voluntary and non-binding 
           liberalization.
        •  Fourth, in its blueprint for Philippine participation in APEC 
           entitled “APEC and the Philippines: Catching the Next Wave,” the
           government has stated that one of the priority measures it will push
           for is “strict enforcement of intellectual property rights.”
This is 
           not an  agenda that serves the Philippine interest nor the Asian 
           interest.  This  is the agenda of Microsoft Corporation and the US 
           Trade Representative’s Office.

In dealing with the Ramos administration, APEC’s Asian member countries must
be warned that under the leadership of doctrinaire free traders, Philippine
economic policy is in the process of radical transformation.  Our foreign
investment code is being overhauled drastically to open up the retail trade
sector to Walmart, Sears, and other foreign distributors on terms far more
liberal than those existing in Korea, Thailand, Malaysia, and other
economies.  It has already been changed to allow the entry and operation of
foreign banks, also on terms far more liberal than in other Asian countries.
Land ownership has been revised to allow foreigners to lease land for 50
years, renewable for 25 years, and is being further revised to give
foreigners virtual ownership via the so-called “Condominium Act.”

Non-tariff barriers are being dismantled wholesale, and Executive Order 264
will reduce all tariffs to a uniform five per cent by 2004.  This tariff
reduction scheme is not—repeat, not—guided by AFTA’s plan for regional
import substitution—that is, reducing tariffs among members but keeping them
up against non-members as part of a concerted effort to upgrade ASEAN’s
industry. An official Philippine document says that this “goes one step
further by minimizing the potential trade diverting effects of regional
trading agreements by making available all tariff changes on an MFN basis.”

We are not against liberalization.  Like most Asian economic planners, we
are for a pragmatic trade policy, where the national government retains the
ability to liberalize or to protect the economy, depending on the
circumstances.  We are for a trade policy that recognizes other national
priorities, like industrial deepening, equitable income distribution, and
sustainable development.

The Philippines’ doctrinal, unilateral, blanket liberalization policy under
APEC leads to three unacceptable consequences:

        •  It entails the surrender of a flexible trade and investment policy as
           a mechanism of industrial and economic development. 
        •  It will lead to the sacrifice of important environmental, people's
           and human rights and social priorities for marginal gains in 
           production and allocative efficiency.  Blanket liberalization will, 
           in fact, bring about a greater exploitation of labor and the 
           environment—precisely, what Washington now cynically accuses the
           Asian countries of doing! 
        •  It makes liberalization irreversible.  By locking in unilateral 
           liberalization program to multilateral agreements like APEC, the 
           current administration will in fact make it irreversible.  Any future
           administration will be able to undo it only on the pain of incurring 
           sanctions and retaliation from trade partners like the United States.
           It is this model of  radical liberalization made irreversible by the 
           iron rules of multilateral agreements that the Philippines is 
           proposing that its neighbors adopt.  

Manila’s program coincides in all essentials with the vision of APEC as a
free trade area.  It will do away with one of the key instruments of the
so-called “Asian miracle”: the flexible employment of trade policy to
achieve industrial deepening and other broader national development objectives.

Stop the Philippines from being a Trojan Horse 
for APEC’s Northern Lobby

In light of the foregoing concerns, we ask the Asian senior and trade
ministers to:

        •  forcefully remind the Philippine government that the Asian consensus 
           is that APEC will remain a consultative group, not turned into a free
           trade area;
        •  demand that the Philippine government cease making its program of 
           blanket, unilateral, and irreversible liberalization the model for 
           other Asian countries in APEC;
        •  insist that the Philippine government synchronize its stands with 
           other Asian countries around a cautious, non-doctrinal approach to 
           liberalization that does not give up flexibility to use trade to 
           achieve goals essential to national security and sustainable 
           development;
        •  follow the spirit of Osaka by moving away from a focus on free trade 
           toward more relevant and more important principles—such as 
           sustainable development, fair trade, and economic cooperation—as the 
           basis of regional cooperation.

It is unfortunate that in APEC, the Philippine government is, objectively
speaking, regressing to its old role of serving as spokesman  for US
interests in the region.  We in the NGO, PO and trade union community demand
that the  current administration align itself with the Asian interest,
rather than the Northern free trade lobby, in APEC.  And we ask the
governments and peoples of the other Asian member countries in APEC to warn
and help us prevent the Philippine government from turning into the Trojan
Horse of Northern interests in the Asia-Pacific region.

Manila People's Forum on APEC 1996*
22 August 1996

*  The Manila People's Forum on APEC 1996 is the continuation of the
initiative started in Kyoto in 1995 to provide a parallel process of
peoples, communities and sectors affected by the free trade and economic
integration agenda represented by the APEC. In November, five hundred
participants representing peoples, non-government  organizations, civil
society organizations, the academe and cause-oriented groups from across the
Asia Pacific Region and other South Nations of the world will converge in
Manila for a conference on "Fair Trade and Sustainable Development: Agenda
for Regional Cooperation." This gathering is an effort to focus the
attention of the international community on the need to reflect such
concerns as human rights, gender, social equity and environmental
sustainability in the APEC Agenda.