ASEAN Deal with U.S. Disastrous to
Economy, IBON Warns
"Governments that
forsake control over the domestic economy betray their poor farmers,
workers and small and medium businesses."
Posted by Bulatlat
The recently-signed trade and
investment framework agreement (TIFA) between the U.S. and the
Association of Southeast Asian Nations (ASEAN) will sooner or later
lead to a free trade agreement (FTA), and this will prove disastrous to
the vulnerable sectors of the region, according to independent
think-tank IBON Foundation.
IBON research head Sonny Africa over
the weekend said underdeveloped countries entering into an FTA with
industrial powers such as the U.S. and Japan virtually surrender
national development policy-making to the interests of transnational
capital. "Governments that forsake control over the domestic economy
betray their poor farmers, workers and small and medium businesses,"
Africa said.
Africa pointed out that FTAs benefit
only exporters who are competitive to begin with, and only the biggest
investors who can overwhelm small domestic capital in other countries.
Backward countries like the Philippines must first achieve a minimum of
economic development and strength to be able to gain net benefits from
surrendering controls on foreign trade and investment.
He cited the experience of other Third
World countries that suffered after entering into FTAs with Washington.
Some 1.3 million Mexican corn farmers were displaced by the North
American Free Trade Agreement (NAFTA) because of U.S. dumping of
heavily subsidized corn. Over a million Colombian consumers will be
excluded from access to essential medicines and the country will face
an additional US$5 billion in health costs over the next ten years
because of intellectual property rights provisions in the Central
American Free Trade Agreement (CAFTA).
Highlights of the TIFA
-
SEAN and the U.S. will establish a formal dialogue to
coordinate on regional and multilateral trade issues;
-
ASEAN and the U.S. will undertake a Work Plan that will
support regional integration and help expand the already strong
trade and investment ties between ASEAN and the U.S.;
-
The Work Plan will include initiatives to support the
development of the ASEAN Single Window, which will facilitate the
flow of goods within ASEAN and between ASEAN and the U.S.;
-
It will include cooperation on sanitary and phytosanitary
(SPS) issues to foster additional trade in specific agricultural
goods as well as cooperation on pharmaceutical regulatory issues.
-
A Joint Council on Trade and Investment will be formed
under the TIFA to provide directions on the implementation of the
TIFA and the Work Plan. |
Africa also said
that the Philippines itself will lose more than it gains from
liberalization of the economy through FTAs. The economy has very narrow
export interests restricted largely to electronics and cash-crop
agriculture which are dominated by big foreign transnational
corporations, so the real gains for the domestic economy from these
will even be minimal, he said.
The domestic
economy remains underdeveloped from being open to cheap foreign goods
for decades, especially since the 1980s. These have brought
unemployment and underemployment to their record-high levels today.
Under an FTA, the pressure to deploy even more overseas workers and to
allow foreign corporations to exploit the country's natural resources
would intensify, Africa said.
Africa pointed out
that rich countries such as the U.S., Japan, and South Korea developed
their economies not through free trade but through a period of
sustained, substantial and far-reaching state intervention and
protection. The Philippines will only benefit from foreign investment
if it has the power to direct it to areas of national benefit, to
control capital repatriation and to require real technology transfer,
he said. Posted by Bulatlat
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