Friday, January 03, 2014

Free Trade 30: BIPOR and APTIR

Many national and multilateral agencies are known for being Bureaucracies Instigating Protectionism, Outings and Revelries (BIPOR). For instance, to have real free trade as in freedom to trade by the people, there is little or no need for endless negotiations if economies will declare unilateral trade liberalization, like what Hong Kong has done. Just open the borders to various goods and services from many countries at zero tariff, zero regulations except the trading of guns, bombs, fake and substandard medicines and food products, poisonous substances and a few others that can harm public health and safety.

With protectionism, trade negotiations can take 20, 50, 100 years or more. There are dozens or hundreds of reasons and alibis why some government agencies want explicit protectionism via high or multiple tariff, or an implicit one through non-tariff barriers (NTBs) like health and sanitary restrictions, labor and gender regulations, environmental and ecological regulations. So for various national governments and multilateral trade negotiators, prolonged negotiation means prolonged outings, international revelries and galas. BIPOR is ugly.

This coming Tuesday afternoon, 7 January 2014, there will be a forum, the Philippine launch of the Asia-Pacific Trade and Investment Report 2013 (APTIR), at the UP School of Economics (UPSE) Auditorium, Diliman campus, Quezon City. The event will be jointly sponsored by the Center for the Advancement of Trade Integration and Facilitation (CATIF) and the Philippine Center for Economic Development (PCED).

APTIR is an annual publication of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). This year’s report is entitled  “Turning the Tide: Towards Inclusive Trade and Investment.”

Here is the tentative program, the speakers and panelists.

As I am no fan of the UN and its various attached agencies, the report’s title, “inclusive trade” – addition to inclusive growth, inclusive development, inclusive democracy, inclusive business, inclusive environment,… -- reminds me of what governments and the UN never ever mention explicitly but is very clear and implicit in their minds, inclusive pockets. All those “inclusive ______” require more taxes and borrowings to finance.

The UN and many governments never fail to highlight income inequality rising, at the national, regional and global levels. Thus, the repeated use of "inclusive _______."

The main purpose of more international trade is to give the people more choices. Consumers and users of finished or intermediate products or capital goods like machines and trucks, are better off if they can compare prices and quality across many producers and manufacturers worldwide. And producers worldwide are forced to keep innovating and improving their products and services at more affordable prices to keep pace with innovation by their competitors.

As productivity and innovation keep rising, the income and asset share of the hardworking and efficient people rise fast relative to the income and asset share of the less industrious, less ambitious people in society, and that is how inequality rises as an inevitable phenomenon. 

I browsed through the web about APTIR and I saw this report,

I think it is wrong to say that (trade-led) "growth is not benefiting the very poorest". Would non-growth or very slow growth benefit the very poor? Definitely not. Growth, no matter how perceived to be "very inequal" has the potential and actual effect of uplifting the condition of the poor. A rich household that has become richer because of more international trade will soon have two or more big houses. Each additional big house will require new construction workers, electricians, plumbers,carpenters, architects and other skilled laborers and professionals. When the big house is finished, it will require new house helpers, gardeners or other maintenance workers. The kids will have a driver each, possibly a nanny each and so on. Which creates new jobs for the poor, even for the unskilled ones.

More questionable statement by the UN ESCAP paper, that international trade has "little impact on employment opportunities."

At least the paper has recognized the role of information and communications technology (ICT) to reduce poverty. Until about three decades ago, only very rich people could afford to have a mobile phone. These days, even ordinary farmers, jeepney and taxi drivers, have mobile phones. The gadget helps improve their productivity in terms of getting information re their products/services' pricing and customers availability.

BIPOR and APTIR, we need free trade, as in our freedom to trade, to buy and sell with the minimum restrictions, regulations and taxation that contribute to higher prices of internationally-traded goods and services.

See also:
Free Trade 27: Proposed EU-PH FTA and TRIPS Plus, September 24, 2012
Free Trade 28: Exports and Prosperity, March 11, 2013 

Free Trade 29: ASEAN and Education Competitiveness, November 16, 2013
Business 360 8: TPP, RCEP, SAARC and Free Trade, June 17, 2013

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