In 1994, when the Philippine Senate was debating whether to ratify the Uruguay Round agreement establishing the WTO, then-Senator Gloria Macapagal-Arroyo served as the Ramos administration's point person leading the charge to ratify the treaty. Being a US-trained neoliberal economist, she argued the orthodox view that the agreement and the WTO made up a multilateral set of rules or institutions that would eliminate unequal power relations from global trade and provide smaller countries equal standing with the big trading powers.
But in October 2002 at the summit of the Asia Pacific Cooperation grouping (APEC), GMA proclaimed the "need to re-engineer the WTO to ensure there is a level playing field" in global trade. The challenge in world trade policy, she said, was to ensure that "the rules of trading are not stopped in favor of developed countries, on the one hand, but practice protectionism against developing countries, on the other."
When even the neoliberals complain about the process, something has clearly gone awry.
Philippines membership in the WTO is a very complicated issue.The country has been exposed to the ravages of both free trade and monopolistic competition, two contradictory principles which coexist in the WTO.
One way to look at the issues is to acknowledge that in every battle there are winners and losers; what's the scorecard for the Philippines in the WTO?
- Philippine food consumers, in the short term, because of lower food costs due to massive import of cheap foods from big agricultural exporters, such as meat from the United States, rice from Thailand and Vietnam, and vegetables from China.
- Philippine importers, who reap large profits from importing food and manufactured goods.
- Transnational grain corporations (such as Cargill and Archer/Daniels/Midland in the United States) who profit from dumping corn and rice (often grown with large government subsidies) in the Philippines at prices below the cost of Philippines production.
- Transnational seed corporations, who benefit from the WTO TRIPS rules protecting patented plant varieties. Transnationals such as Monsanto patent native plant varieties, or else create and patent genetically modified plants (GMO), lure farmers into using them and keep them locked into returning each year to buy the seeds.
- Large chicken, beef and pork feedlot operators (primarily in the United States) who profit from dumping cheap meat (fed with heavily-subsidized corn and soybeans) in the Philippines at prices below the cost of Philippines production.
- Chinese manufacturers, paying labor costs even lower than their Filipino counterparts and benefitting from WTO-pushed industrial tariff reductions, sell increasing quantities of low-cost goods.
- Large first-world financial services corporations (especially banks in the United States), who stand to reap huge profits as, under unrelenting pressure from WTO, IMF and World Bank, the Philippines gradually opens up its finance sector to foreign competition.
- Foreign and domestic investors also stand to profit handsomely as, again under unrelenting pressure from WTO, IMF and World Bank, the Philippines gradually privatizes and then opens to foreign investors its water delivery and electrical generation utilities, and public-service institutions like hospitals, state colleges, housing and postal services.
- Philippine food consumers, in the long term, because of the collapse of the domestic agricultural economy and consequent loss of millions of jobs. Prices of some imported foods may be lower, but if people don't have jobs, how can they buy food?
- Philippine farmers. If they can't compete with big international agribusiness, they lose their farms. In 1994 Philippine agricultural employment was 11.29 million, dropping by 2001 to 10.85 million. (This is against a backdrop of population growth during this same period of at least sixteen million people.) In 1993, Philippines was a net food exporter (292 million Peso surplus) but by 2002 had become a net food importer (794 million Peso deficit.)
- Philippine water and electricity consumers. The WTO, in conjunction with its sister agencies the IMF and World Bank, is pushing the well-worn mantra of "Liberalize, deregulate and privatize." Manila consumers have already experienced this process with the disastrous privitization of the Metropolitan Waterworks and Sewerage System (MWSS), and National Power Corporation (Napocor.)
- Philippine sovereignty: WTO regulations have precedence over national legislation in signatory nations; thus the Philippines Constitution and foreign investment laws can and will be overridden by WTO rules. All WTO member states experience a loss of national sovereignty and autonomy.
- OFW (Overseas Foreign Workers): the corrollary of WTO-related job loss in the Philippines is increasing pressure for Filipinos to go abroad in search of work. Ten percent of the Philippines population is currently working abroad, will this number continue to rise?
- Philippines environment. Pressure to participate and compete in the global economy will bring further destruction to the already-decimated natural environment in the Philippines.
* Much of the information on this page is lifted from the excellent book:
The Anti-Development State: The Political Economy of Permananet Crisis in the Philippines
by Walden Bello, Professor at the University of the Philippines in Quezon City and board member of Focus on the Global South in Thailand.
In Hong Kong, I heard Mr. Bello give articulate WTO critiques at public forums, and then later exhort the crowd with a bullhorn during the anti-WTO marches. He's one of my heroes.*