THANK YOU VERY MUCH AMBASSADOR SEVERINO, SECRETARY GENERAL OF ASEAN.

ATTY. ROMULO, CHAIRMAN OF THE MAKATI BUSINESS CLUB; MON DEL ROSARIO, CHAIRMAN OF THE PHILIPPINE-U.S. BUSINESS COUNCIL; BILL LUZ, EXECUTIVE DIRECTOR OF THE MAKATI BUSINESS CLUB; MEMBERS OF THE DIPLOMATIC CORPS; PARTICIPANTS TO THIS SYMPOSIUM, SECRETARY CITO LORENZO; DISTINGUISHED GUESTS; LADIES AND GENTLEMEN, GOOD MORNING.

I THINK THIS IS A VERY IMPORTANT FORUM – AT LEAST IT IS FOR ME – BECAUSE IT IS MY OPPORTUNITY TO ARTICULATE ON MY ADMINISTRATION’S TRADE POLICIES.  IN FACT, I ASKED UNDERSECRETARY CRISTOBAL TO SEND MY SPEECH TO SECRETARY ROXAS IN MEXICO BECAUSE I’VE PUT TOGETHER OUR TRADE POLICY.  AND I’M ASKING THE PRESIDENTIAL MANAGEMENT STAFF TO PUBLISH MY SPEECH IN FULL, EXCEPT MY ADLIBS.  (LAUGHTER)

WELL, AS I SAID, I’M TAKING THIS OPPORTUNITY TO ARTICULATE MY ADMINISTRATION’S TRADE POLICIES NOT JUST FOR ASEAN BUT FOR BEYOND.

THE RAPID PACE OF GLOBAL INTEGRATION AND ITS DEPTH AND BREADTH CALL FOR A MORE HOLISTIC APPROACH THAT GOES BEYOND JUST TRADE POLICIES.  SUCH INTEGRATION INVOLVES NOT JUST THE FLOW OF GOODS BUT ALSO THE FLOW OF SERVICES, PEOPLE, IDEAS AND BEST PRACTICES OF GOVERNANCE AND OF DOING BUSINESS.

THE HOLISTIC APPROACH STARTS BY OUR OWN VISION FOR OUR COUNTRY, WHICH IS TO WIN THE BATTLE AGAINST POVERTY WITHIN THE DECADE.  AND AS I HAVE SAID OVER AND OVER AGAIN, OUR NATIONAL AGENDA TO WIN THIS BATTLE HAS THE FOLLOWING COMPONENTS:

FIRST, A PHILOSOPHY OF FREE ENTERPRISE APPROPRIATE TO THE 21st CENTURY, WHICH IS THE CENTURY OF THE GLOBAL MARKETPLACE.  THUS, OUR BATTLE AGAINST POVERTY IS INTERCONNECTED TO THE WORLD’S MARKET PLACE;

SECOND COMPONENT OF THE NATIONAL AGENDA IS A SECTORAL AND SOCIAL BIAS IN OUR ECONOMIC DEVELOPMENT PLAN.  AND UNDER THIS, WHILE WE HAVE NO CHOICE IN THE WORLD TODAY BUT TO BE GUIDED BY THE SIGNALS OF THE MARKET, TO FACE THE PERILS OF THE TRANSITION TOWARDS CLOSER GLOBAL ECONOMIC INTEGRATION, WE MUST PROVIDE THE SAFETY NETS FOR SECTORS ADVERSELY AFFECTED BY GLOBALIZATION.  THIS IS PART OF OUR SECTORAL AND SOCIAL BIAS IN OUR ECONOMIC DEVELOPMENT PLAN;

THE THIRD COMPONENT OF OUR AGENDA AGAINST POVERTY IS A MODERNIZED AGRICULTURAL SECTOR FOUNDED ON SOCIAL EQUITY;

AND FOURTH, IMPROVING MORAL STANDARDS IN GOVERNMENT AND SOCIETY.

TO MAKE OUR ECONOMY COMPETITIVE, WE HAVE ADDRESSED SEVERAL FACTORS CRUCIAL TO THE COST OF PRODUCTIN AND OF DOING BUSINESS IN THE COUNTRY.  WE HAVE PUT IN PLACE POLICIES TO LOWER THE COST OF CAPITAL BY DEVELOPING AND STRENGTHENING OUR FINANCIAL MARKETS.  WE HAVE TAKEN MEASURES TO REDUCE THE COST OF POWER, TRANSPORTATION, COMMUNICATIONS WHICH ARE THE LIFEBLOOD OF COMMERCE THROUGH THE STRONG INVOLVEMENT OF THE PRIVATE SECTOR.

TO INCREASE PRODUCTIVITY, WE HAVE STRENGTHENED LABOR-MANAGEMENT RELATIONS, SOUGHT TO ELIMINATE CORRUPTION AND RED TAPE, AND WE HAVE BEEN EXPANDING RETRAINING PROGRAMS TO PREPARE OUR WORKFORCE FOR THE DEMANDS OF THE NEW GLOBAL ECONOMY.

CENTRAL TO OUR GLOBAL ENGAGEMENT – AND HENCE OUR DEVELOPMENT AGENDA – IS TRADE.  TRADE IS NOT AN END IN ITSELF BUT A MEANS TO SOCIAL AND HUMAN DEVELOPMENT.  PROPERLY EMPLOYED, TRADE POLICIES ENHANCE OUR ACCESS TO A WIDER RANGE OF GOODS, SERVICES, TECHNOLOGIES AND KNOWLEDGE.  MORE TRADE STIMULATES ENTREPRENEURSHIP, CREATES JOBS, ATTRACTS CAPITAL, INCREASES FOREIGN EARNINGS AND FOSTERS VITAL LEARNING PROCESSES.  THESE ARE THE TOOLS FOR SUSTAINABLE DEVELOPMENT AND THE REDUCTION OF POVERTY.

THUS, WE SUPPORT A RULE-BASED MULTILATERAL TRADING SYSTEM WHICH IS WHAT THE WTO IS SUPPOSED TO BE.  OUR SUPPORT IS BASED NOT ON ANY ATTACHMENT TO AN IDEOLOGY, BUT IN A PRACTICAL SENSE, IN THE LIGHT OF WHAT WE HAVE SEEN WORKS FOR OUR PEOPLE.

IT IS IMPERATIVE THAT THE RULES THAT UNDERPIN THIS SYSTEM ARE THOSE THAT ENSURE THAT TRADE PLAYS ITS FULL PART IN PROMOTING ECONOMIC GROWTH, EMPLOYMENT AND DEVELOPMENT FOR ALL.  AN INABILITY TO REAP THE BENEFITS FROM TRADE CAN TRANSLATE INTO A REDUCED CAPACITY TO SUSTAIN IMPORTS OF CAPITAL EQUIPMENT AND INPUTS AND INTO LESS FAITH IN THE BENEFITS OF LIBERALIZED TRADE, THUS, UNDERMINING OUR ABILITY TO MOBILIZE SUPPORT FOR OUR TRADE POLICY REFORMS.

IT DOES NOT HELP ANY, THEREFORE, WHEN DEVELOPED COUNTRIES PERSIST IN MAINTAINING PROTECTIONIST BARRIERS AGAINST PRODUCTS OF INTEREST TO DEVELOPING COUNTRIES LIKE THE PHILIPPINES.  THESE INCLUDE TEXTILES AND GARMENTS AND TROPICAL AGRICULTURAL AND FISHERIES PRODUCTS.  AND WHILE THESE COUNTRIES TAKE EVERY OPPORTUNITY TO LECTURE US ABOUT THE VIRTUES OF A MARKET-DRIVEN ECONOMY YET HUNDREDS OF BILLIONS OF DOLLARS TO SUBSIDIZE THEIR FARM PRODUCTION KEEPS THEIR MARKETS CLOSE TO PRODUCTS OF INTEREST TO OUR COUNTRY.

JAMES WOLFENSON, THE WORLD BANK PRESIDENT, WAS RECENTLY QUOTED AS SAYING THAT THERE IS SOMETHING FUNDAMENTALLY WRONG IN SPENDING 300 BILLION DOLLARS ANNUALLY FOR A SMALL SEGMENT OF SOCIETY OF THESE SUBSIDIZING COUNTRIES COMPARED TO THE 50 BILLION PESOS ANNUALLY IN ODA TO THE MOST IMPOVERISHED COUNTRIES.  I WOULD USE STRONGER TERMS THAN WOLFENSON.  I WOULD DESCRIBE THESE ACTIONS AS NOT JUST FUNDAMENTALLY WRONG BUT SIMPLY IMMORAL.

THESE KINDS OF ACTIONS, DISPROPORTIONS, DAMAGED IN A FUNDAMENTAL WAY THE CLIMATE FOR, AND WEAKEN THE GLOBAL COMMITMENT TO, THE FLOW OF TRADE THAT IT RISKS EMBOLDENING THE FORCES OF PROTECTIONISM AND COMPLICATING THE JOB OF DEVELOPING COUNTRY TRADE OFFICIALS LIKE SECRETARY ROXAS.

THE DOHA ROUND OF WTO HAS BEEN BILLED AS THE DEVELOPMENT ROUND, TO ENSURE THAT IT BECOMES SO I HAVE INSTRUCTED OUR NEGOTIATORS TO FOCUS ON THE FOLLOWING GOALS:

*TO ELIMINATE TARIFF ESCALATION AND TARIFF PEAKS FOR PRODUCTS OF INTEREST TO DEVELOPING COUNTRIES AND MAKE THESE PART OF THE EARLY HARVEST OF RESULTS.

*FOR THE WTO TO MAKE COROLLARY EFFORTS TO LESSEN THE BURDENSOME REQUIREMENTS FOR DEVELOPING COUNTRIES TO MEET THE STRINGENT STANDARDS IN DEVELOPED COUNTRY MARKETS.  COMPLIANCE IN MANY CASES HAS PROVEN TO BE ONEROUS AND EXPENSIVE.  FOR EXAMPLE, OUR MANGOES AND BANANAS HAVE TO UNDERGO EXHAUSTIVE DATA COLLECTION AND CERTIFICATION REQUIREMENTS, LASTING FOR YEARS IN SOME MARKETS.  SAD TO SAY, SANITARY REQUIREMENTS AND TECHNICAL STANDARDS SEEM TO BE THE NEW WEAPON OF CHOICE OF PROTECTIONISTS.

*ANOTHER INSTRUCTION IS TO SEEK GREATER LIBERALIZATION OF THE TEMPORARY ENTRY OF SERVICE PROVIDERS IN THE GENERAL AGREEMENT ON TRADE AND SERVICES, A LARGE POTENTIAL COMMERCIALLY MEANINGFUL AREA FOR DEVELOPING COUNTRIES AND WHERE SUPPORT FOR SUCH LIBERALIZATION IS STRONG, FOR INSTANCE IN THE ICT SECTOR.

*ANOTHER INSTRUCTION IS TO SEEK A TRADE REGIME WHEREBY ANTI-DUMPING ACTIONS WILL BE MADE LESS A TOOL FOR HARASSMENT BY RAISING THE REQUIREMENTS FOR THE INITIATION OF SUCH ACTIONS AND RATIONALIZING THE STANDARDS FOR DETERMINING INJURY.  THESE ACTIONS ARE RESOURCE-INTENSIVE.  AND THEY WEIGHT DOWN SMALL BUSINESS AND DEVELOPING COUNTRIES.

*STILL ANOTHER INSTRUCTION IS TO SEEK TO MAKE SPECIAL AND DIFFERENTIAL TREATMENT TRULY OPERATIONAL BY PROVIDING MORE FUNDS AND RESOURCES FOR CAPACITY BUILDING TO ENHANCE SUPPLY-SIDE CAPABILITIES, IMPROVE PRIVATE SECTOR COMPETITIVENESS, NEGOTIATE EFFECTIVELY, IMPLEMENT TRADE AGREEMENTS, AND MEET CONTINUING OBLIGATIONS UNDER THOSE AGREEMENTS.  FURTHER, I HAVE ASKED OUR NEGOTIATORS TO PROVIDE FOR FURTHER DIFFERENTIATION OF TREATMENT AMONG DEVELOPING COUNTRIES GIVEN THE WIDE RANGE OF LEVELS OF DEVELOPMENT FROM THE CURRENT TWO CATEGORIES OF LEAST-DEVELOPED COUNTRIES ON THE ONE HAND AND DEVELPING COUNTRIES ON THE OTHER.  THERE ARE WIDE VARIATIONS IN CIRCUMSTANCES WITHIN ONE CATEGORY, FOR INSTANCE, BETWEEN A PHILIPPINES AND A SOUTH KOREA.

WE WILL CONTINUE TO SUPPORT THE CAIRNS GROUP CONSENSUS THATEXPORT SUBSIDIES IN THE AGRICULTURAL SECTOR SHOULD BE ELIMINATED.  BUT WE WILL MAKE A STRONG CASE FOR SPECIAL AND DIFFERENTIAL TREATMENT ON OTHER AGRICULTURAL ISSUES TO ENABLE US TO HAVE SUFFICIENT FLEXIBILITY TO PURSUE VITAL DEVELOPMENT GOALS SUCH AS POVERTY ALLEVIATION.

I ALSO PLACE GREAT IMPORTANCE, OF COURSE, TO REGIONAL TRADING ARRANGEMENTS.

I HAVE FAITH IN THE VIABILITY OF THE ASEAN FREE TRADE AREA.  WE CANNOT GENERATE INVESTMENTS IN ADEQUATE MAGNITUDES UNLESS WE BECOME PART OF A LARGER, INTEGRATED REGIONAL MARKET.  THIS IS THE ONLY WAY WE CAN COMPETE FOR MARKETS AND INVESTMENTS WITH THE GIANTS ELSEWHERE IN THE WORLD.

AS MENTIONED BY OUR TWO SPEAKERS BEFORE ME, AT THE BEGINNING OF THIS YEAR, THE AFTA PROCESS REACHED A SIGNIFICANT MILESTONE WHEN THE FIRST SIX SIGNATORIES OF THE AFTA AGREEMENT – BRUNEI, INDONESIA, MALAYSIA, THE PHILIPPINES, SINGAPORE AND THAILAND – ALL ACHIEVED TARIFF LEVELS OF 0 TO 5 PERCENT ON ALMOST ALL GOODS TRADED AMONG THEM.

INDEED, AS I SAID WHEN I SPOKE BEFORE THE PBEC IN MALAYSIA.  THIS EVENT IS SO MOMENTOUS FOR THE HISTORY OF WORLD TRADE.  BUT NOBODY NOTICED IT BECAUSE EVERYBODY IS STILL TALIING ABOUT SEPTEMBER 11.  NONETHELESS, MOMENTOUS AS IT IS, AFTA HAS SOME WAYS TO GO BEFORE BECOMING A TRULY EFFECTIVE MEANS FOR STRENGTHENING THE REGION’S COMPETITIVE ECONOMIC POSITION IN THE GLOBAL MARKET.

AND THIS IS WHY I SUPPORT ASEAN’s RESOLVE TO GO BEYOND TARIFF-CUTTING.  AS POINTED OUT BY ROD SEVERINO, THE LEADERS OF ASEAN ARE WORKING ON THE ELIMINATION OF NON-TARIFF BARRIERS TO TRADE.  WE ARE HARMONIZING OUR PRODUCT STANDARDS AND DEVELOPING MUTUAL RECOGNITION ARRANGEMENTS.  WE ARE NEGOTIATING THE LIBERALIZATION OF TRADE IN SUCH IMPORTANT AREAS AS FINANCIAL SERVICES, TELECOMMUNICATIONS, CONSTRUCTION, AIR AND MARITIME TRANSPORT AND TOURISM.  WE ARE BINDING THE REGION TOGETHER BY EXPANDING OUR TRANSPORTATION AND ENERGY NETWORKS AND EASING THE FLOW OF GOODS, PEOPLE AND POWER THROUGHOUT THE REGION.  WE ARE DRAFTING AN AGREEMENT TO MAKE IT EASIER AND LESS EXPENSIVE FOR TOURISTS TO COME TO ASEAN AND TO TRAVEL WITHIN ASEAN.

CLOSER INTEGRATION IS NECESSARY FOR THE LONG-TERM SURVIVAL AND PROSPERITY OF EACH OF THE ASEAN COUNTRIES.

BUT WE ARE ALSO LOOKING BEYOND OUR IMMEDIATE BORDERS – BEYOND – TO EXTEND THE BENEFITS OF REGIONAL, INTEGRATION TO OUR MAJOR TRADING PARTNERS IN THE REGION.  THE SO-CALLED ASEANS OF CHINA, JAPAN AND SOUTH KOREA.

WITH CHINA’S ENTRY INTO THE WTO, THE NATIONS OF ASEAN MUST EMBARK ON A PROCESS OF REFLECTION REGARDING THEIR OWN ECONOMIES AND FOR THE ASEAN REGION AS A WHOLE TO DETERMINE WHO BEST THEY CAN POSITION THEMSELVES TO ENSURE THE CONTINUED COMPETITIVENESS OF THEIR EXPORTS AND TO CAPITALIZE ON THE OPPORTUNITIES PRESENTED BY A MORE OPEN CHINA.

THE CHINA-ASEAN FREE TRADE AGREEMENT WILL – AGAIN, AS MENTIONED BY ROD – CREATE A MARKET OF 1.8 BILLION PEOPLE AND A COMBINED GDP OF 2 TRILLION DOLLARS.  IT IS PROJECTED THAT THIS WOULD BOOST ASEAN’S EXPORTS TO CHINA BY 48% AND INCREASE ASEAN’S GDP BY ALMOST 1 PERCENT.  THE BENEFIT FOR THE PHILIPPINES IS EXPANDING OUR EXPORTS TO THE RAPIDLY GROWING CHINESE MARKET AS WELL AS COOPERATING WITH CHINESE AND MULTINATIONAL COMPANIES IN THE DEVELOPING OF MANUFACTURING AND SERVICE FACILITIES IN ASEAN THAT CAN FEED THEIR EXPANDING MAINLAND OPERATIONS.  THIS IS AN EXCELLENT OPPORTUNITY TO POSITION OUR LOGISTICS, SERVICE, MANUFACTURING AND COMMODITY FIRMS FOR STRONG BUSINESS LINKS WITH POST-WTO CHINA.

FOR JAPAN, JAPAN’S TRADE WITH ASEAN TOTALLED MORE THAN 120 BILLION DOLLARS LAST YEAR.  THE OUTLINES OF AN ASEAN-JAPAN ECONOMIC PARTNERSHIP IS BEING FLESHED OUT.  MEANTIME, A “NEW-AGE PARTNERSHIP” AGREEMENT WITH THE PHILIPPINES IS UNDER STUDY.

THIS DEMONSTRATES THAT THE PHILIPPINES WILL LOOK FOR OPPORTUNITIES TO FURTHER OUR ECONOMIC INTERESTS THROUGH BILATERAL TRADING AGREEMENTS.  ALTHOUGH IT IS NOT SO EASY FOR US TO ENTER INTO SUCH ARRANGEMENTS SINCE WE ARE A MORE DIVERSIFIED ECONOMY COMPARED, SAY, TO SINGAPORE, AND THEREFORE MORE AREAS FOR POTENTIAL ASSYMETRY IN INTEREST.

IN SUM, THE PHILIPPINES IS FASHIONING A DEVELOPMENT AGENDA BASED ON AN ECONOMY COMPETITIVE IN THE 21ST CENTURY.  OUR REFORMS AIM TO CREATE A DOMESTIC ENVIRONMENT THAT WILL ENABLE US TO REAP THE BENEFITS OF GLOBAL ECONOMIC INTEGRATION WHILE MINIMIZING THE RISKS TO THE ADVERSELY AFFECTED SECTORS.  WE ARE WORKING WITHIN ASEAN TO INTEGRATE AND EXPAND THE REGIONAL MARKET, SO THAT OUR PRODUCTS AND THE PRODUCTS OF THOSE WHO INVEST IN OUR COUNTRY WILL HAVE THE REGION’S HALF-A-BILLION PEOPLE AS A MARKET.

WE ARE ALSO SEEKING, BY OURSELVES AND WITH OUR ASEAN PARTNERS, TO STRENGTHEN AND DEEPEN OUR ECONOMIC TIES WITH COUNTRIES AND GROUPS OF COUNTRIES BEYOND ASEAN – CHINA, JAPAN, AUSTRALIA, NEW ZEALAND, INDIA, THE UNITED STATES, THE EUROPEAN UNION.

TO SUMMARIZE THE SUMMARY, THE PHILIPPINES WILL MAINTAIN OUR ECONOMIC TIES WITH THE REST OF THE WORLD TO THE EXTENT THAT IT IS CONSISTENT WITH OUR COMMITMENTS AND THE WELFARE OF OUR PEOPLE.

THANK YOU.