How 2 economic issues affect the small folk
The recent electoral campaigns covered the usual topics: jobs, livelihood, food, education, shelter, etc.—with nary a word on the actual action steps on bringing these to the people.
The campaign promises lacked not only the minute, practical details but also the big picture. In between the dancing and the singing on stage, two pertinent economic issues would have been worthier to discuss: competition law and international trade policy.
These issues are widely believed to be important only to big business. But on the contrary, these issues are just as important to the more vulnerable and marginalized among the electorate. Competition law and international trade policy directly affect the ability of our farmers to produce and earn enough for their families. They affect the competitiveness of micro, small and medium-scale enterprises (MSMEs), as well as the ability of workers to find jobs here and in other countries.
Protecting small businesses. A comprehensive competition (or antitrust) law evens out the playing field for all. It seeks to prevent monopolies (with certain exceptions), abuse of dominant position, anticompetitive mergers and acquisitions, and cartels. Consequently, it will enhance fair competition among businesses, and at the same time safeguard the welfare of consumers by ensuring the availability of a wider range of goods and services at fair prices.
Another extremely crucial aspect of this law is its attempt to deal with the issue of monopsony in agriculture. In a monopsony, there is only a single buyer who is able to dictate prices, to the prejudice of the marginalized farmers. Worse, the monopsonist is often also the only source of credit.
The Senate and the House of Representatives each have their consolidated versions of a comprehensive competition bill. Congress’ sessions in June lasted only for three days (June 5-7). But it should give priority to the passage of this law, which is in fact one of the priorities of President Aquino.
Protecting our farmers. International trade policy relates to the restriction and/or liberalization of imports from other countries.
There should be caution when signing free trade agreements. In their worst forms, free trade agreements would even allow foreign investors to sue our country in an international tribunal. Our country should sign a trade and investment agreement only if the people, especially the marginalized sectors, would benefit.
How do these affect small farmers and the local economy? International trade policies affect the ability of our local agriculture and industries to access foreign markets and their ability to compete against imports, as well as those that would limit or encourage foreign direct investments.
These include formulation of rules on raising tariffs on imported goods and restricting the entry of imported goods in order to protect local industries, and the accession to or rejection of trade and investment agreements.
Another important aspect of our international trade policy is the ability of our government to enforce laws affecting international commerce, especially against smuggling, which brings about untold hardships to local producers and honest workers who play by the rules.
Unfortunately, it also includes rules that can unilaterally reduce tariffs on imports, thus reducing the protection given to local industries and foregoing much-needed tax revenues—something our local farmers, fishers and MSMEs direly need.
The incentives and services that the government must provide to local producers and services providers are also included in international trade policy: infrastructure, job training, protection from unfair trading practices of other countries, and measures to ensure that imports do not pose harm to the health of our people and the environment.
That the economy grew by 7.8 percent in the first quarter of this year, surpassing China and Indonesia, is a good enough motivation for elected officials to discuss thoroughly both competition and international trade issues with the various stakeholders: the small farmers and fisherfolk, the MSMEs, the workers, big business, consumers, and the local government units.
Let’s hope the conversation continues in the 16th Congress.
Tony Salvador is a senior lawyer of the Initiatives for Dialogue and Empowerment through Alternative Legal Services (Ideals). He has had over 20 years of experience in international trade and labor law. This piece is part of Oxfam in the Philippines’ State of Our Nation Op-Ed Series written in time for the July 22 opening of the 16th Congress and President Aquino’s fourth State of the Nation Address. The series highlights the key issues that Oxfam works for: disaster risk reduction, climate change, renewable energy, agriculture, fair trade, women’s rights, and the peace process. Visit www.oxfamblogs.org/philippines.
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