Amid an escalating US-China trade war, world leaders are alarmed that the Geneva-based World Trade Organization, the only global international organization dealing with the rules of trade between nations, could become irrelevant. To protect the WTO, the European Union decided to host trade ministers from the United States and Japan next month in Brussels in an effort to address China’s trade practices in a way that does not marginalize the WTO. The EU is working on a proposal to amend the composition of the WTO, as well as address about a half dozen US complaints.
The decision by the Trump administration to side-step the WTO when it unilaterally increased tariffs on $50 billion worth of Chinese goods has raised concern that the trade body could slide into obsolescence if steps aren’t taken to shore it up. The situation worsened when Beijing retaliated in kind with duties on $50 billion worth of US goods and pledged to respond if Trump follows through with his threat of levies on an additional $200 billion of Chinese products.
After the collapse of a recent trade talks between US and China representatives, there’s a general consent that China’s leader won’t allow himself to be trumped by an obstinate American president, which is why this trade war will take longer to resolve than expected.
Not a few economists have said an escalating trade war between the top two economic giants will stir up headwinds that will adversely affect their economic growth and those of their trading partners. The Philippines, however, could be one of the countries to benefit from a prolonged US-China trade war. Due to the country’s strategic location in the region, it could regain its status as an ideal production center among China locators.
Now is a good time for us to remind investors that Filipinos are among the most educated and highly trainable labor force in Asia, not to mention that the Philippines is a largely English-speaking country. We have to move fast to attract investors to stop the bleeding in our industrial estates. The Philippine Economic Zone Authority recently reported that investment pledges fell 56 percent in the first half of the year to P53 billion, from P120.2 billion in the same period last year.
The government can show investors our growth indicators and the policies laid out to boost the country’s economic gains. But more than figures and words, officials need to walk the talk. They can’t say investors are welcome when the Chief Executive does otherwise. If presidential advisers know that allowing others to save face is an Asian trait, they could have prevented the public humiliation of foreign investors involved in the planned construction of a $1.5-billion theme park by the Nayong Pilipino Foundation (NPF) and Landing Resorts Philippines Development Corp., a local subsidiary of Hong Kong-based Landing International.
President Duterte earlier this month sacked the entire board of Nayong Pilipino over a lease deal that he found disadvantageous to the government. The firing was announced simultaneously with the groundbreaking of the NayonLanding casino resort, planned to feature a water park, resort, casino and office space for NPF.
NayonLanding Chairman and Executive Director Yang Zhihui said the resort will generate more than 10,000 jobs. He said NayonLanding is estimated to add 2 million to 3 million tourist arrivals to the country. However, pending the review by the Department of Justice of NayonLanding’s contract, the project remains in limbo.
This should teach us a lesson. The government must fix the system of giving out contracts if we don’t want a repeat of an incident that could send wrong signals to investors.