Free trade pacts more dangerous than WTO - IBON
IBON | Manila | 17 August 2006
FREE TRADE PACTS MORE DANGEROUS THAN WTO - IBON
In the wake of the collapse of the Doha talks in the World Trade Organization (WTO), negotiations for the country to enter into an Asia-Pacific free trade agreement (FTA) have become more urgent for industrialized countries. But independent think-tank IBON Foundation warns that entering into an FTA could be even more dangerous than liberalization under the WTO.
According to IBON research head Sonny Africa, FTAs often involve a higher degree of obligation to liberalize their economies than multilateral trade agreements such as the General Agreement on Tariffs and Trade or GATT, which gave birth to the WTO. Recent FTAs have in fact already been called ‘WTO-plus’, Africa said.
He cites as example negotiations for the Japan-Philippines Economic Partnership Agreement (JPEPA), wherein Japan wanted the Philippines to commit to liberalize more service sectors than the country had committed to under the General Agreement on Trade in Services of the WTO. The Philippines is also holding talks with the US for a bilateral FTA.
Africa pointed out that FTAs are essentially about ensuring market expansion for the manufacturers, traders and service providers of developed countries. Further, First World corporations also want to remove restrictions on their operations by deleting protectionist measures in the constitution and limiting the role of government in regulating investments.
For example, he said, during talks for the JPEPA, Japan had demanded the removal of the constitutional restriction on non-citizens owning land and the deregulation of the local construction industry.
“Furthermore, when negotiations in the WTO resume, members will demand the same multilateral commitments that a country made through a bilateral FTA,” said Africa.
He clarified that IBON’s opposition to FTAs does not mean support for liberalization through the WTO. “Recklessly opening up economies is undesirable whether done globally under the WTO or regionally under any kind of Asia-Pacific free trade area,” he said.
He pointed out that a decade since the Philippines became a member of the WTO in 1995, the country has consistently recorded trade deficits, meaning that the country’s imports have outpaced its exports. (See Table)
Table: Balance of Trade
(FOB Value in billion US dollars)
| Year | Exports | Imports | Balance of Trade Favorable (Unfavorable) |
| 1995 | 17.45 | 26.54 | (9.09) |
| 1996 | 20.54 | 32.43 | (11.89) |
| 1997 | 25.23 | 35.93 | (10.70) |
| 1998 | 29.49 | 29.65 | (0.16) |
| 1999 | 35.04 | 30.74 | 4.30 |
| 2000 | 38.08 | 34.49 | 3.59 |
| 2001 | 32.15 | 33.06 | (0.91) |
| 2002 | 35.21 | 39.24 | (4.03) |
| 2003 | 36.23 | 40.47 | (4.24) |
| 2004 | 39.68 | 44.04 | (4.36) |
| 2005 | 41.26 | 47.42 | (6.16) |
Source: National Statistics Office
Said Africa, “The collapse of the WTO is an opportunity for countries to review the adverse effects of globalization and to begin implementing polices that protect the national patrimony and assert national sovereignty.” (end)
IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.
