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APEC, TPP, and the containment of China in the Philippine experience

Updated on January 5, 2016

The Asia-Pacific Economic Cooperation (APEC) was established in 1989 as a response to the increasing economic interdependency of Pacific countries amidst the growth of Japan and the popularity of regional trade blocs. Despite its nature as a regional organization which aims to promote free trade throughout the Asia-Pacific, there is no doubt of its international significance. The APEC has 21 member economies which collectively make up about half of the world in terms of population, land area, gross domestic product (GDP), and trade. In the face of heightened globalization, trade liberalization becomes the standard or the norm in the international scene. The importance of a thorough and critical assessment of APEC is thus recognized and should be fulfilled.

With the Asia-Pacific Economic Cooperation Leaders’ Summit set to be held at Manila in November 2015, the Philippines finds itself in a boxed position. According to Renato Reyes Jr. of BAYAN, the United States is expected to use the meeting to peddle the onerous Trans-Pacific Partnership Agreement (TPP) to the members of APEC, the main aims of which include the lowering of tariffs among member countries and establishing an investor-state dispute settlement mechanism. The proliferation of the ideas of globalization paints TPP in a good light, however, this is far from reality. The TPP requires aspiring members to allow 100% foreign ownership of corporations in all sectors to be eligible. In a developing country like the Philippines, this becomes problematic as such condition would highly likely put basic services in the hands of foreign corporations. If the government of the Philippines is to successfully fulfill its mandate to serve its citizens, this cannot be.

Another side-effect of the TPP is that the immunity of states against private corporations would disappear. This would mean that in the dispute settlement mechanism proposed by the TPP, the state and the corporation would appear on the same plane and would be judged as two of the same type. To do this would be to ignore the superiority of the state over private corporations. It would also compromise the welfare of the people of a certain state with that of the condition of a corporation managed by only a few.

Although the Philippines itself cannot take part in the TPP due to restrictive provisions in our constitution, the issue is still relevant to us. There is a way for the country to join the TPP: to revise its constitution. It should be noted that PNoy has pushed for charter change sometime during the last years of his regime, and we can expect that the winner of the upcoming presidential election would do the same, regardless of whether he is with the same party as PNoy or not.

The United States, in as much as it is the sole unitary power of the present, has always been the dominant player in APEC. It has always used the organization as a venue to push for trade and investment liberalization especially in East Asia and the Pacific countries. The Philippines as a country should not allow itself to be used by powerful states. In the context of China’s growth, the US might be using the TPP and the Philippines as a mechanism for the containment of China. We cannot allow this to happen. At the same time, we should also keep track of China as it can (and will) impinge on our sovereignty in the same way as the US given the chance.

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