Archive for the ‘ASEAN’ Category

By Max de Leon
Published in the November 23, 2007 issue of the Business Mirror

DISCLOSE to the public the contents of the Asean-Japan Comprehensive Economic Partnership Agreement first before signing it.

This was the appeal aired by the multisectoral Fair Trade Alliance (FairTrade) to the Philippine government after news broke out that negotiations between Asean member-countries and Japan have been concluded during the Asean Summit in Singapore and the agreement is now up for signing.

In a letter addressed to Trade Secretary Peter B. Favila, former senator and FairTrade lead convenor Wigberto Tañada said they were surprised to learn that the Asean-Japan economic partnership agreement has been concluded without its provisions passing through consultations with the different stakeholders.

Tañada said this is serious considering the debate for the ratification of the Japan-Philippines Economic Partnership Agreement (Jpepa) is still raging in the Senate.

“We, at FairTrade, are asking: Where are the consultations regarding these agreements?  Who will be the winners and losers in this Asean-Japan deal? And why is it at this point in time that we’ll be signing the agreement when we have a Jpepa to think and worry about,” Tañada said.

He said they are afraid that the Asean-Japan trade deal will overwrite the country’s amendments and conditionalities in the Jpepa.

Included here, Tañada said, is the contentious issues on transboundary movement of toxic waste, which was initially included in Jpepa, and might be carried out in the Asean-Japan trade deal

“In the spirit of transparency, we urge the DTI [Department of Trade and Industry] to shed some light to the Asean-Japan economic agreement by disclosing it before signing any agreement in Singapore,” Tañada added.

The Asean-Japan agreement covers trade in goods, services, investments, rules of origin, dispute settlement mechanism, sanitary and phytosanitary standards, technical barriers to trade, and economic cooperation. Japan also wishes to incorporate intellectual property rights in the agreement.

The FairTrade is one of the leading groups opposing the ratification of the Jpepa.


By Felipe Salvosa, II
Published in the November 21, 2007 issue of Business World

SINGAPORE — A detailed timetable seeking to establish an ASEAN Economic Community in eight years has hit the ground running, with leaders of 10 Southeast Asian countries affixing their signatures yesterday to a declaration adopting a so-called blueprint for economic integration and an attached “strategic schedule.”

But the approval of the heavily negotiated ASEAN document has also started a serious rethinking of the ambitious integration project, with individual members of the $1-trillion trading bloc continuing to seek bilateral free trade deals that could run counter to agreements that ASEAN has entered into as a group.

The ASEAN Economic Community Blueprint wants all members to bring the focus back “towards maintaining ’ASEAN Centrality’,” and states that when it comes to seeking market access elsewhere, there should be a “coherent approach.”

The blueprint ordered a review of all free trade and comprehensive economic partnership deals vis-a-vis ASEAN’s internal integration commitments, and the establishment of a system for enhanced coordination, “possibly arriving at common approaches and/or positions in ASEAN’s external economic relations and in regional and multilateral fora.”

ASEAN countries are on the record as supporting a goal of becoming a single market of 570 million people and a unified production base by 2015, with regional tariffs on around 70% of goods already scrapped. On the side, however, they are racing against each other to ink deals to penetrate more lucrative markets such as the United States, Japan, and Europe.

For example, Malaysia, Indonesia, Thailand, and the Philippines have secured individual free trade agreements or FTAs with Japan. Singapore has a free trade deal with the United States while Thailand is expected to snag one soon, leaving Filipino tuna and garments exporters worried.

As a group, ASEAN is also talking trade with China, Japan, South Korea, India, and the European Union, resulting in a “noodle bowl” of overlapping free trade deals. Throughout Asia, 36 FTAs have been concluded, 41 are being negotiated, and 25 new ones have been proposed, according to the Manila-based Asian Development Bank (ADB).

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The multisectoral Fair Trade Alliance (FairTrade) urges the Department of Trade and Industry Secretary Peter Favila to disclose the contents of the ASEAN-Japan Comprehensive Economic Partnership Agreement and other possible agreements before any signing takes place during the 11th ASEAN-Japan, 11th ASEAN-Republic of Korea and 6th ASEAN-India Summits.

In a letter addressed to Sec. Favila, former Senator and FairTrade lead convenor Wigberto Tañada cited the ASEAN summit taking place on November 18 to 22 in Singapore wherein the ASEAN-Japan Comprehensive Economic Partnership Agreement is slated to be inked.

“We, at FairTrade, are asking: where are the consultations regarding these agreements?  Who will be the winners and losers in this ASEAN-Japan deal? And why is it at this point in time that we’ll be signing the agreement when we have a JPEPA to think and worry about,” Tañada said.

“We just learned that the ASEAN-Japan agreements will be implemented ahead of JPEPA and that the contentious issues on transboundary movement of toxic waste which was initially included in JPEPA might be carried out in the ASEAN-Japan trade deal.

We’re afraid that the ASEAN-Japan will overwrite the country’s amendments and conditionalities in JPEPA.”
“In the spirit of transparency, we urge DTI to shed some light to the ASEAN-Japan economic agreement by disclosing it before signing any agreement in Singapore,” Tañada added.

The ASEAN-Japan agreement covers trade in goods, services, investments, rules of origin, dispute settlement mechanism, sanitary and phyto-sanitary standards, technical barriers to trade, and economic cooperation. Japan also wishes to incorporate intellectual property rights in the agreement.

By Bernadette S. Sto.Domingo
Published on the September 4, 2007 issue of the BusinessWorld

COUNTRIES IN SOUTHEAST Asia and the Pacific, the Philippines included, were the least labor productive in Asia, with not enough employment opportunities being created in the region, the International Labor Office (ILO) said in its latest “Key Indicators of the Labor Market.”

The executive summary of that report described labor productivity in Southeast Asia and the Pacific as “stagnant,” compared to the rest of Asia.

It said productivity, measured in US dollars as output per person employed, in the region was much slower than other regions, posting an average annual increase of just 1.6% between 1996 and 2006.

And in Southeast Asia, the Philippines posted the lowest productivity in 2005 among the five original members of the Association of Southeast Asian Nations.

The study showed workers in the Philippines added $7,271 in value to the economy in 2005, compared to a $9,067 average for “Southeast Asia and the Pacific.”

The average for the eight Southeast Asian markets surveyed was $14,062.25 for 2005.

Value added per worker in the Philippines’ Southeast Asian neighbors varied widely. Philippine workers’ output was better than: $2,853 in Cambodia; $4,541 in Myanmar; and $4,809 in Vietnam. But workers in the Philippines fared poorly compared to counterparts in the four other original ASEAN members, namely: $9,022 in Indonesia; $13,915 in Thailand; $22,112 in Malaysia; and $47,975 in Singapore.
Labor productivity in South Asia averaged $7,531 in 2005. Productivity in the four markets in that region measured as follows: $3,315 in Bangladesh; $6,587 in India; $8,247 in Pakistan; and $11,323 in Sri Lanka.

Rene E. Ofreneo, executive director of Fair Trade Alliance and former dean of the University of the Philippines School of Labor and Industrial Relations, said the Philippines needs a strategic road map for productivity upgrading.

“We have embraced globalization in a rather aimless way, unlike other neighboring countries in East Asia. We need a clear industrial vision. We need to invest in the industry particularly in technology, new machinery, factories, etc.,” he said in an interview.

He said the government and the private sector should be more decisive on the issue of smuggling, dumping of excess goods in the country, recalibrating trade liberalization commitment, as well as acquiring new technology.

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Two reflection papers from Dr. Rene E. Ofreneo on ASEAN and investments now available for download:

Closing the Development Gap: An ASEAN Puzzle

In 2006, the Economic Ministers of the Association of the Southeast Asian Nations (ASEAN) made a bold pronouncement: they are advancing to 2015 the formation of the ASEAN Economic Community (AEC), a seamless and tariff-free regional economy. Under the Bali Concord of 2003, the AEC is one of the three pillars underpinning the ASEAN Community (AC); the other two pillars are the ASEAN Socio-Cultural Community (ASCC) and the ASEAN Security Community (ASC) . In January 2007, in their Summit in Cebu, the ASEAN Leaders reaffirmed the regional resolve towards a full AEC when they declared that the vision of one ASEAN Community is being advanced to 2015, from the original 2020.

But can the ASEAN really develop a seamless and integrated regional economy in a span of seven or eight years? To find out, click here.

Hedge Funds and Equities: Defining the Social and Labor Rules of Investment

Its bubble time in Asia once again. Stocks are at all-time high everywhere. Asian currencies are clobbering the once almighty US dollar everywhere. The real estate business is booming everywhere, with the glut of office spaces disappearing and new office buildings dotting Asia’s commercial skylines. This boom is further fueled by the global business process outsourcing (BPO), which is spreading from India and the Philippines to China, Thailand, Vietnam and other Asian countries. Investments, foreign and domestic, backed up by the big banks and financial houses, seem to be flowing and criss-crossing everywhere. As Goldman Sachs and other international credit rating agencies put it, Asia is one giant ‘emerging market’ for hungry investors. Click here, to continue.

By Rosalinda Pineda Ofreneo and D. L. Doane
Published on the Talk of the Town column of the Philippine Daily Inquirer, A16, December 10, 2006

Can Asean be true to its vision of “one caring and sharing community” if it is just governments talking to each other across negotiating tables? Obviously, the Asean people must be involved, especially those who comprise the working majority.

Most of the employed in Asean are workers in the informal economy (at least 20 million or 65 percent of total employed in the Philippines in 2004). Among them are home-based workers, vendors, stall sellers, waste recyclers, small transport drivers, construction workers, and others. Many are women who, aside from having to work to earn a pittance to ensure survival, also shoulder the burden of housework, child care and community service.

The informal economy has been growing due to the combined effects of liberalization, deregulation and privatization, which have driven out millions of workers from the formal economy (24 million, according to the International Labor Organization (ILO), in the aftermath of the Asian financial crisis). At the same time, the informal economy serves as the bottom rung of the production ladder, which enables firms to maintain a small core of regular workers and have access to a large pool of cheap casual labor.

In the Asean, therefore, many are seriously affected by various forms of insecurity. Economic insecurity is a constant threat to workers who have in many cases no labor and social protection. Formal workers under flexibilization and contractualization are vulnerable to job loss and abuse. Migrant workers can be easily terminated and deported. Home-based and other informal producers know that job orders can suddenly disappear with no other alternative in sight, or that their savings can easily be wiped out by a sudden death or illness.

To be truly a caring and sharing community, the Asean must address the insecurities that working people experience on a daily basis. It must strive toward the broader vision of human security which is based on freedom from fear and want, whereby basic needs become basic rights, and citizens are empowered to develop their potential and participate in decision-making.

The Asean’s stated concern for social protection is a positive step but efforts must be concrete and comprehensive such as Thailand’s initiative to have a universal health care system. Likewise, an integrated approach to social protection is a must in order to meet the economic and other human security requirements of the working peoples—e.g., sustainable jobs, farms and livelihood; access to affordable health care, education and housing; safe community and liveable environment; guarantees on civil and political rights, including personal protection related to domestic violence. Without an integrated approach, social protection policies, narrowly defined, simply cannot work for informal workers who generally are not even able to contribute to their own social security.

In this context, we support the campaign for decent work based on the ILO Conventions on freedom of association, social protection, nondiscrimination at work, and the elimination of forced and child labor. We also urge the immediate ratification by the Asean-member countries of the ILO Convention on Home Work (ILC 177). In the Asean, there are millions of homeworkers (at least six million in the Philippines), most of whom are women who are multi-burdened and subjected to gender-based discrimination.

The human security deficits in the Asean have also emboldened informal workers to be more active in the campaign for fair trade policies. Fair trade means changes in macroeconomic policies to give an even chance for local producers to have a rightful share of the domestic market, e.g., campaign for a recalibration of tariffs and a stop to smuggling and dumping of cheap foreign products.

Fair trade means enhancing domestic economic sustainability through the use of locally available resources, production catering to basic community needs, and respect for the environment. Fair trade also means ensuring workers’ rights to just remuneration, job security, social protection and safe working conditions. Finally, fair trade means promoting gender equity through recognition of women’s work, greater equality in the division of labor, and stronger participation of women in decision-making.

In the face of the exclusionary outcomes of economic liberalization, we call for openness and transparency in the Asean processes. The interests of women and working people, especially those in the informal economy, need to be articulated, recognized and carried forward. A genuine Asean community striving for human security is anchored on fair and balanced participation in the development processes as well as on the equitable distribution of opportunities, resources and benefits.

(Ofreneo is the regional coordinator of Homenet Southeast Asia [HSA] while Doane is a research consultant of HSA and of Fair Trade Alliance.)

Wigberto E. Tanada, Lead Convenor

These days the media are filled with stories on the forthcoming ASEAN Leaders’ Summit and the dream of Asean officials to build ASEAN into a community of caring and sharing societies. This is a grand and noble vision which no peace-loving ASEAN citizen can quarrel with.

The vision of one ASEAN community is further bolstered by the economic discourse produced by the ASEAN secretariat. A large population of around 550 million people producing an annual regional GDP amounting to $1 trillion. A fast-growing region surrounded by dragon economies – Japan, Korea, China and India, not to mention the two countries down under, Australia and New Zealand. In fact, there is the proposal of Japan for ASEAN to be transformed as the core of a bigger East Asia Free Trade Area (EAFTA) composed of the ten ASEAN countries and these dragon economies. The East Asia Free Trade Area will have a collective GDP that will easily dwarf that of North America and the European Union. The ASEAN project, the neo-liberalist economists claim, is or will be a success story on economic liberalization, globalization and regional integration.

Is it? Will it be so? Before we are dazzled, mesmerized and confused by all the economic discourse on a strong and a rising ASEAN community, let us consider some realities on the ground.

The ASEAN was founded in l967, and is turning 40 next year. And yet, they are discussing their TOR or terms of engagement only now, or four decades after. ASEAN, through a group of eminent persons and a team of foreign policy experts, is rushing an ASEAN Charter for approval by the ASEAN Leaders next year.

It will also be recalled that in the 70s and 80s, Asean’s preoccupation was to prevent the spread of communism in Southeast Asia in light of the Viet Nam war. And yet, today, Viet Nam, Cambodia, Laos and even Myanmar are all part of ASEAN, joining the founding five countries – Indonesia, Malaysia, Philippines, Singapore and Thailand – plus Brunei in building a community of caring and sharing societies.


The main point that is be made here however is that economic liberalization per se does not necessarily lead to regional integration. In the l980s, the ASEAN initiated a number of regional integration projects such as preferential tariffs for certain ASEAN products and complementation projects in support of ASEAN industries. In the l990s, ASEAN became even more ambitious with the establishment of an ASEAN Free Trade Area project implemented through a Common Effective Preferential Tariff regime, which has reduced tariffs for ASEAN goods at 0-5 per cent.

And yet, despite the AFTA-CEPT and the various integration projects, the growth of intra-ASEAN trade or trading among ASEAN members is much less than the growth of extra-ASEAN trade or trade by the individual ASEAN countries with those outside the ASEAN. Also, the AFTA-CEPT projects account for less than five per cent of the intra-ASEAN trade, meaning member countries did not and still do not avail of the so-called preferential tariffs under the AFTA-CEPT.

Why? There are several reasons.

One reason is that most countries in the ASEAN have unilaterally liberalized their economic regimes, meaning they have adopted liberalization on their own. In the case of Indonesia and the Philippines, liberalization was part of the IMF-World Bank conditionality package. In the case of Vietnam, this is part of their commitments to the bilateral trade agreement with the United States and as price of membership in the WTO. In the case of Singapore, liberalization has always been considered an integral component of their open trading economy. In short, AFTA-CEPT and other ASEAN-led liberalization programs have played a marginal role in the liberalization of the individual ASEAN economies.

Another reason for the poor growth of intra-ASEAN trade is the reality that most ASEAN countries are competing with one another. A number are producing similar agricultural products such as rice and oilseeds, exporting similar industrial products such as sewn garments and textiles, and sending migrant workers overseas to ease the unemployment situation at home. Interestingly, over 40 per cent of intra-ASEAN trade is accounted for by one country with the lowest population base next to Brunei, Singapore.

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Wigberto E. Tanada, Lead Convenor


The topic given me – ‘Impact of WTO on Southeast Asia’ — is fairly broad and exciting.

In fact, proponents of economic globalization and trade liberalization love to cite Southeast Asia as one of its models.  Accordingly, it is one of the fastest-growing regions in the world.  It is also surrounded by economic dynamos.  In the north is China, the new economic dragon of Asia, which seems to be overtaking everyone in the world.  In the east are Japan, the original Asian dragon, and the tigerish economies of South Korea and Taiwan.  In the west is the emerging dragon economy of India, whose IT industry is changing the complexion of the global economy.

Within Southeast Asia itself, you have the tiger economy of Singapore and the rapidly growing economies of Malaysia, Thailand and, yes, Vietnam.

So who can not be gung-ho about Southeast Asia?

As you all know, Southeast Asia is home to over 500 million people belonging to ten countries.  These countries have formed what is known as the Association of Southeast Asian Nations (ASEAN) that was originally composed of the non-communist six countries – Brunei, Indonesia, Malaysia, Philippines, Thailand and Singapore.   Later, the four other Southeast Asian countries – Kampuchea, Laos, Myanmar and Vietnam – joined the ASEAN when they became market oriented, following the collapse of the old Soviet bloc and the rise of Reaganite/Thatcherite economic thinking everywhere.

Today, Southeast Asia is better known in some circles as the ASEAN region.  Its economic integration project – the ASEAN Free Trade Agreement (AFTA) – is also hailed as a major liberalization project similar to that of the European Customs Union and the North American Free Trade Agreement (NAFTA) of Canada, Mexico and the United States.   This AFTA was launched in 1992, while WTO was formed two years after.
Through the AFTA’s CEPT or the Common Effective Preferential Tariff system, the ASEAN is trying to deepen the economic integration of the ten ASEAN economies.  In fact, in Bali 2003, the ASEAN Leaders declared that like the European Community, the ASEAN will be an ASEAN Community by 2020.   This borderless ASEAN Community shall consist of three communities – the ASEAN Security Community, the ASEAN Socio-Cultural Community and the ASEAN Economic Community or AEC.   In other words, the formation of AFTA is a precondition for the eventual development of an ASEAN Economic Community, which, in turn, is a precondition for the evolution of an ASEAN Community.

So what has been the impact of the 13-year old AFTA, a regional integration project, on the ASEAN region?  And yes, what has been the impact on the ASEAN of the 11-year old WTO, which is a global economic integration project?

These are fairly difficult for me to answer exhaustively given the time limitations and the complexity of the topics themselves.

Instead, let me focus on what I think are the key development challenges facing the ASEAN region in the light of the operations of AFTA and WTO.

But first, let me clarify where I am coming from.  Unlike many neo-liberal economists, I do not worship on the altar of free trade.   Thus, I do not look at the liberalization and globalization goals of AFTA and WTO with misty eyes.   However, I also do not subscribe to an out-and-out protectionist policy which leads to an autarkic economy closed to the outside world.   I believe in calibrating liberalization and protection measures based on the actual needs of the economy and its people.

To me, the AFTA and WTO projects matter only if they are able to serve the basic needs of the Filipino and other ASEAN peoples, meaning they are able to create conditions for the realization of full employment and higher prosperity for every country in the region.

So what are the development issues facing the region under AFTA and WTO?

Liberalization and uneven development

First, let me point out that the region is developing in a very uneven manner under economic liberalization and globalization.

Development has also been very uneven in the individual ASEAN countries, with some benefiting from economic integration and many others, not.  In some countries, the number of the excluded constitutes the large majority.  Our NGO friends and progressive social scientists in Indonesia, Philippines and Thailand have extensive documentations on how liberalization and globalization tend to benefit a few, mainly the economic partners of transnational corporations and some skilled professionals like IT programmers.

At the same time, these processes  of globalization and liberalization do marginalize many others — the excluded such as the small farmers, communal fisherfolk, small and micro enterprises with no global linkages, domestic industries producing for the home market, indigenous peoples who do not comprehend the meaning of tradeables and exportables, workers displaced by privatization and corporate restructuring,  and many others who have no sustainable jobs or business niches under globalization and economic liberalization.   Even in tiny Singapore, you have a growing segment of old redundant workers who can not find meaningful and secure jobs in a liberalized and globalized economy.

Such a situation is not sustainable, politically and economically.  Terrorist threat, insurgency and social unrest breed in the fertile ground of social inequality and the exclusion of large sectors of the population from the benefits of growth.

Intermeshing liberalization programs
And AFTA’s limited impact

Of course, it is also difficult to isolate the specific impact of WTO and AFTA on the different ASEAN countries.

First, there are many liberalization processes taking place at the same time.  In the case of the Philippines, we have been implementing a unilateral liberalization program – reducing our tariffs, opening up one economic sector after another and privatizing virtually everything, from government assets like military camps to government services like support services to farmers – since l980.  This unilateral liberalization program is not a product of a development program debated upon by the Filipino people or even by their legislators.  It was an imposition of the IMF-World Bank and the neo-liberal economic technocrats in government.  It was imposed without any consultation with the basic sectors, including the business community; nor was it preceded with any information sharing.

As a result of the unilateral liberalization, our actual tariffs are way below those of our binding rates under the WTO and way below those of our neighbors, except those of Singapore.  Because of unilateral liberalization, our tariffs are virtually the same as our AFTA tariffs.  In short, both the WTO and AFTA have only limited impact on our actual tariff rates.

As to the region in general, you will note that intra-ASEAN trade has not grown as fast as extra-ASEAN trade.  In fact, growth of intra-ASEAN imports and exports have been flat since l993.   For example, intra-ASEAN trade constituted 21.1 per cent of total trade of the ASEAN countries with the world in l993; in 2003, this shared has increased by one per cent, to 22.8 per cent.  In the EC, I understand intra-EC trade constitutes nearly 70 per cent of total trade.  This is what economic regional integration is all about, to hasten growth through increased trade among member countries.

So what has been happening is that the ASEAN member countries are integrating globally, but not necessarily regionally with one another.   If you need further proof of this, look at how fast trade of the ASEAN countries with China has been growing despite the absence of any formal agreement with this country in the l990s.  It was only in 2002 that the ASEAN concluded an early harvest program with China.  Another proof of the limited impact of AFTA is the limited use by importers and exporters of the ASEAN’s Form D, the document needed to avail of lower intra-ASEAN tariff treatment.   A Form D certificate indicates that the product being imported is an ASEAN product, with 40 per cent ASEAN content.  Hardly anybody in the region is using Form D.

Still another proof of the limited impact of AFTA is the fact that between 40-50 per cent of the intra-ASEAN trade is trade with Singapore, which has concluded numerous bilateral free trade agreements with other countries such as the United States, Australia, Chile and so on.   How can a tiny country such as Singapore account for half of the region’s trade, if it is not used as a mere transshipment center?  And how come the ASEAN has allowed Singapore — and now Thailand, Malaysia and the Philippines — to conclude bilateral free trade agreements with other countries, if the idea is to have regional economic integration?   In the EC, it is unthinkable for a member country to conclude a bilateral agreement.  It is EC in the name of EC doing the negotiation.  Here, it is free for all.

WTO’s overall impact

As to the WTO, some ASEAN countries such as Vietnam and Laos have not yet acquired full membership in this body, although Vietnam’s application for membership was filed as early as l995.  Kampuchea was admitted only recently.

On the other hand, the original six ASEAN countries have pursued their liberalization programs unilaterally, some selectively like Malaysia and Thailand and others in a wholesale manner like Indonesia and the Philippines.   In addition, the individual ASEAN countries have their own liberalization commitments under AFTA, to the IMF-World Bank if they are heavily indebted (like Indonesia and the Philippines), and to bilateral free trade agreements they have concluded with selective countries.

Thus, it is really difficult to isolate the specific impact of WTO — and even AFTA – on the ASEAN.

However, it can not be denied that WTO has contributed to the general elevation of economic liberalization policy as the principal thrust in economic governance in practically all the ASEAN countries.   The WTO in a way helps ‘lock in’ the different ASEAN countries in the global regime of liberalization, in all areas – industry, agriculture and services.

Even the ASEAN is trying to mimic the agreements under WTO by having the regional equivalents of these agreements.   The only difference — the liberalization targets are much deeper.

Every country going export-oriented
But based on its national interests

And yet, it appears that all the ASEAN countries are trying to be outward-looking and export-oriented, like almost every country in Asia today.

Of course, countries try to be export-oriented in different ways.

At this point, let me clarify one beef I have against the neo-liberal economists.  They have been saying that for countries to become export-oriented, they have to liberalize their economies and bring down their tariffs and commit to various types of liberalization programs. This is not what Japan did.  This is not what the Asian NICs did. And this is not what China and even Malaysia and Thailand are doing.  These countries have succeeded in the export market or  in the global market  by targeting certain industries, by giving protection to these targeted industries, and by calibrating liberalization and protection at the same time.  They did not commit and have not committed to any program of wholesale liberalization, which, unfortunately is what the Philippines did and what Indonesia has done, after it submitted itself to the IMF discipline in l998, at the height of the Asian financial crisis.

Obviously, the difficulty of committing to wholesale liberalization is what is delaying the grant of full membership to Vietnam under the WTO.

One major challenge facing each ASEAN country, therefore, is how to attain success in exports while being able to maintain a balanced and broad-based development pattern amid all these liberalization initiatives and these grand projects called AFTA and WTO.

In this regard, the Philippines is a bad model, for reasons I have already mentioned.  Malaysia and Thailand are emerging to be good models, only because these countries have been very careful in defining their development priorities and have been very militant in asserting their national interests under globalization.

In the end, it is clear that every country should take care of its national interests in a strategic and balanced way, if it has to succeed under globalization.

The need to focus on capacity building

Thus, the present preoccupation of WTO and the ASEAN on more and more liberalization – in agriculture, industry, services and other areas – does not address the development needs of countries which are lagging in the growth and development process.

Countries are not created equally. Equal liberalization rules for all is akin to pitting heavyweight against lightweight boxers under the equal rules of boxing.

What the WTO and the ASEAN must focus on, therefore, is on the issue of how developing countries can catch up in the growth process, on the challenge of raising the capacity of these countries.   This, ironically, is what the Preamble of the WTO says.  The Preamble says that the goal of global trade is the promotion of full employment through trade and development based on the needs and capacities of member countries, developing countries in particular.  This is what the special and differential treatment or SDT clause of the WTO means.  This SDT is what the Doha declaration in 2001 proclaimed is the main task of the new trade negotiation round dubbed as the Doha Development Round (DDR).

And yet, this is not what the WTO is doing, when it is overly focusing on market access issues in agriculture, industry and services.  This is not what the ASEAN is doing when it tries to clone or ape what the WTO is doing.

May I conclude, therefore, by challenging you, the emerging leaders of the region and the world, to use your talents in designing and pushing for new rules of globalization and regional integration aimed at bringing about a just, equal and humane economic order where everyone is included.

Speech delivered at the 3rd Regional Seminar for Young Progressives Southeast Asia (YPSEA) – Young People Shaping Globalization held on 25 October 2005 at Discovery Suites, 25 ADB Ave., Ortigas Center, Pasig City

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