Who’s ‘afraid’ of Beijing imposing trade sanctions?

This is in reaction to the news item titled “‘Business as usual’ after sea row ruling” (Business, 07/16/16).

Trade Secretary  Ramon Lopez’s remarks that trade between  the Philippines and China, during the pendency of the West Philippine Sea case at the Permanent Court of Arbitration (PCA), remained steady should be clarified based on trade records.

For perspective: Scarborough Shoal, a “submersible” reef, subject to  the movement of  tides, was seized by China in early 2012. In January 2013, the Philippines filed a case in the PCA at The Hague, questioning Beijing’s “nine-dash” claims to practically the whole of South China Sea, including the West Philippine Sea. A “10th” was added for Taiwan.

It is noteworthy that six (or 67 percent) of the 10 “dashes” face our western shores from Palawan to Batanes. The PCA recently ruled that Beijing violated the Philippines’ sovereign rights to its exclusive economic zone, which stretches 200 kilometers out from our shores.

Some business groups said that “trade relations with China suffered slightly since the country filed an arbitration case.” Let’s look into the numbers. Stats don’t lie:

1. Between 2010 and 2015, China’s commodity exports to the Philippines totaled $124 billion against the Philippines’ $39 billion; needless to say, the balance of merchandise trading lopsidedly favored China by $85 billion or twice as much as the Philippines’ exports for the period.

After the Philippines lodged the case in 2013, the record on China-to-Philippines trade export values should tell it all: $11.5 billion (2010); $14.2 billion (2011); $16.7 billion (2012); $19.9 billion (2013); $23.5 billion (2014); $26.7 billion (2015)—for an average of $18 billion yearly in 2010-2012  to $23.3 billion annually in 2013-2015.

On the other hand, the Philippines’ yearly commodity exports to China averaged $6 billion between 2010 and 2012 and $7 billion in 2013-2015. This shows that China’s exports to the Philippines were five times more than its imports from our country, or every $1 of Philippine export to China was matched with $5-import from China.

China should buy more bananas, pineapples, coconuts, and sugar byproducts to narrow the gap.

Government should look into why China exports of pork meat and offal to Manila reached $24.2 million in 2015, while Philippine imports from China for the same category reached only $2.5 million.

Could it be the propensity to “undervalue” commodity exports? On bananas alone, for 2013-2015, records show that exports to China reached $520 million or a third of China’s $1.3 billion-banana imports from the Philippines. Banana output expanded from 6.3 million tons in 2005 to 9.1 million tons in 2015.

Based on UN Comtrade, China’s transactions with Manila relative to “vehicles, other than railways, tramway” reached  $2.7 billion in 2013-2015, or double the trade values for the same items for 2010-2012, which was $1.3 billion, while $17.3 million worth of “railway, stock, equipment” were exported in 2013-2015, 62 percent up from $10.7 million in the preceding three years.

So who’s afraid of Beijing imposing trade barriers? Business as usual with or without the Scarborough.

—MANUEL Q. BONDAD, Makati City