UNITED States President Donald J. Trump’s protectionist economic policy is not actually new. It’s another name for mercantilism, the economic model that made the US the world’s unrivaled powerhouse beginning in the pre- and post-World War periods.
Protectionism is the antithesis of free enterprise, where products, prices and services are determined by the market and not by the government. It’s also the economic policy that most of Trump’s predecessors had pursued, resulting in unmitigated recessions and other economic- policy failures.
In the Philippines, protectionism was the late Salvador Araneta’s lifelong crusade. As secretary of economic coordination of former President Elpidio R. Quirino’s administration, he sponsored the import- control policy and the total ban of imported elementary textbooks and supplementary readers. Protectionism contributed significantly not only to the development, growth and economic advancement of the country but also to the modernization of the educational publishing in the Philippines.
Araneta also forced oil companies to refine crude oil, instead of just importing gasoline. If they did not, he declared that the government would put up the refineries. Caltex was the first company to comply. “He seemed to have an uncanny sense of foreboding. The abuse that he had so feared came to pass 36 years later,” said Athle Wijangco Estacio in his
article published by The Sunday Times Magazine on July 6, 1986.
Araneta was just as consistent when he became a delegate to the Constitutional Convention of 1971 to 1972. He was the only delegate who showed up equipped with his own draft of a constitution, naming it the Bayanikasan Constitution based on studies made by the Philippine Constitution Association (Philconsa). Araneta was one of Philconsa’s founders in 1961 and was elected its first president.
The Bayanikasan Constitution was a constitution for the future. Araneta was looking at a time frame of 10 to 20 years for its implementation. It was a constitution that stressed the democratization of wealth with savings and democratization of power.
“It stressed the importance of property ownership and capitalism for all, since Pope Pius XII himself had declared that a just social order could not exist without giving every individual the means to own property,” Araneta said, adding that “the need for a bold housing program could serve as a main pillar for our prosperity,” explaining that “a family owning a home is a great stabilizing factor. It provides the family a sense of security and respect.”
He saw the need for greater participation of private individuals in nation-building. Today, we have the participation of non-governmental organizations, the formation of grassroots leadership, as well as local autonomy. Araneta favored a federal form of government, with a well-balanced collective leadership, pointing out, as well, the need to limit the powers of those in authority. He saw the necessity of opening up public offices to citizens.
We owe our knowledge of the controversial Dodds Report to Araneta, who, during his self-exile in Canada in the martial-law years, uncovered the existence of the document and denounced it in his book America’s Double-Cross of the Philippines.
These were Araneta’s denunciatory words, as he explained the failure of the nation to industrialize: “The indifferent economic development of the country…was due to America’s policy toward Japan and the Philippines. This policy was the result of the Dodds Report that Truman accepted and which had as its objective to make Japan the industrial workshop of Asia and the Philippines a mere supplier of raw materials.”
As Araneta bitterly continued: “We do not argue against the wisdom of providing Japan with the means to rehabilitate herself and allowed to become an industrial country once again, although this was contrary to the prior recommendation of a post-war planning committee headed by Secretary Henry Morgenthau Jr., a recommendation that was in line with the prevailing sentiment at the end of the war.
“But certainly we can argue against a policy that would make Japan the exclusive industrialized country in the Far East, for such a policy was most detrimental to the Philippines. Indeed, the United States could not justify a policy that provided all kinds of stumbling blocks to the industrialization of her ally [the Philippines]. As a result of this policy, industrialization in the Philippines suffered severe setbacks…” It was a division of labor, or of functions, which the Dodds Report crafted for America’s allies in the Far East.
The Dodds Report explains the continuing obsession to this day of US foreign policy to keep the Philippines a free and open market for imports because a liberal import policy—another name for free trade —ensures that this country will never be able to industrialize and take the same protectionist, nationalistic developmental strategy that enabled once-poorer neighbors like Taiwan, Malaysia and Thailand, to transform into the newly industrialized countries that they are today.
The geopolitical plan embodied in the Dodds Report explains what the late Claro M. Recto described as “America’s anti-industrialization policy for the Philippines.”
Although Recto had no knowledge of the existence of the Dodds Report at the time—its existence would surface only in the early-1970s after Araneta exposed it—his enormous analytical power enabled him to deduce from policy statements of US officials that behind US policy in this country was a malevolent design to see to it that we never industrialize.
Conclusive proof of what Recto described as America’s “anti-industrialization policy for the Philippines” came when former President Ferdinand E. Marcos formally launched an industrialization program in the late-1970s based on 11 heavy industries led by the steel, petrochemical and engineering industries.
To reach the writer, e-mail cecilio.arillo@gmail.com.