US President Donald Trump did us, the Philippines, a favor by virtually killing what STRATFOR calls “the mega-regional Trans-Pacific Partnership (TPP)” that former President Barack Obama had used up most of his first years in office to build. Mr. Trump, on his first business day in office, signed an executive order withdrawing the United States from the TPP.
Without the US in that massive free trade bloc of 12 nations, we Filipinos can continue dealing with it on our own, making decisions clearly beneficial to us and backing away from arrangements that we can correctly or vaguely claim to be against provisions of our Constitution and our interests.
With a TPP in force and with the US as a formally signed up partner, we may have to be a formally signed up partner as well just to continue enjoying the huge trade we now have with the US.
Other TPP signed-up partners are now working to salvage the now 11-member trade bloc, either in a weaker form or on a smaller scale. But without the presence of the US—the world’s largest economy—as the TPP’s backbone, one can begin to doubt the bloc’s strength and even its viability.
Countries and blocs in the developed world have been hostile to multilateral or mega-regional trade agreements. Skeptics have questioned the benefits of multiparty free trade agreements—instead of bilateral ones. But skepticism about them does not mean all global free trade deals are about to disappear and be abrogated by strong-country leaders. Yes, President Trump has turned his back on the TPP (which his country’s former President Obama co-created, encouraged and nurtured since 2008). And he has called for the renegotiation of the North America Free Trade Agreement. He even wishes to weaken some US commitments to the World Trade Organization. Yet, Mr. Trump has spoken about negotiating a free trade agreement with the United Kingdom and possibly other countries about the TPP. This indicates that under President Trump the US trade policy will continue to be positive but it will be based on bilateral agreements.
Our country’s annual economic growth rate in the 6.8 to 7.2 percent range since 2013 makes ours one of the fastest growing economies in the world. In some quarters of these past two years, we posted the fastest growth in the world. Our neighbors and the developed world cannot imagine a Trans-Pacific Partnership agreement without our participation. (This has, sadly, not made our large population of poor families less destitute.)
Discussions about Philippine participation in the TPP have, logically, faced the problem posed by the Philippine Constitution. The Philippines cannot legally and properly comply with the truly liberal commercial regime required by the TPP of all partners unless the Constitution is amended.
Many of our industries that are beginning to enjoy success and profitability—even without the benefit of protectionist laws—are worried about how the TPP would affect them. Their opposition to TPP has many allies in Japan, companies that have become global successes with much help from large corporate groups, the government and protectionist rules.
The Department of Trade and Industry does not have any worries, however. DTI secretaries from the term of President Benigno Aquino 3rd (Secretary Gregory L. Domingo and Seretary. Adrian Cristobal) and now President Duterte’s DTI Secretary Ramon Lopez welcome the TPP.