Industrial Policy and the Need for Institutional Reforms in International Trade Policy Making & Negotiations

Industrial Policy and the need for Institutional Reforms in International Trade Policy Making & Negotiations

Jessica Reyes-CantosChief of Staff

Deputy Speaker Lorenzo R. Tañada IIIA presentation for FNF

10 February 2012

Overview of presentation

I. Industrial Policy – Some Thoughts

II. Current Institutional Framework on Trade Negotiations

III. Current Issues

IV. Proposal to Create the Philippine Trade Representative Office

INDUSTRIAL POLICYINDUSTRIAL POLICY

Nations have risen out of poverty through the process of industrialization

It involves the following elements: - qualitative increase in the use of capital

and machinery, increase in labor productivity

- large scale production of goods of high technological content

Industrial PolicyIndustrial Policy

Strategic integration into the global market The State plays an indispensible role in

undertaking strategic integration Montes Thesis: “Industrial policy, defined as

State intervention to support new production activities and build domestic capabilities in specific areas, is more INDISPENSIBLE for countries seeking to pursue their development by integrating internationally”

Industrial PolicyIndustrial Policy

Selective and sectoral – tax and import privileges, engineering education, cascading tariff structure, selective credit allocation

“Industrial” in industrial policy does not mean that this type of policy can apply only to the manufacturing sector. What is important is the choice of specific industries that is subject to selective intervention.

Industrial Policy

Industrial policy involves targeting justified from development objectives

Industrial policy imposes stresses and strains on international trade regime

Presentation OutlinePresentation Outline

I. Industrial Policy – Some ThoughtsII. Current Institutional Framework on

Trade Negotiations III. Current IssuesIV. Proposal to Create the Philippine Trade

Representative Office

There are several government agencies currently involved in trade policy-setting and trade negotiations:

Institutional Framework

• Committee on Trade and Related Matters (CTRM) • Department of Trade and Industry (DTI)• Department of Agriculture (DA)

• Department of Foreign Affairs (DFA)• National Economic and Development Authority (NEDA)

Inter-agency involvements (by agreement)


• Technical Committee on WTO Matters (TCWM)• Philippine Permanent Mission to the WTO

ASEAN/APEC

• Philippine Council on ASEAN and APEC Cooperation

Bilaterals

WTO Matters

• Philippine Coordinating Committee

• Joint Coordinating Committee for NAMA (JCC-NAMA)

Committee on Trade and Related Matters

• Advises the President and the NEDA Board on tariff and related matters, and on the effects on the country of various international developments; coordinates agency positions and recommends national positions for international economic negotiations.

• Has 3 levels: Committee proper (cabinet-level), Technical Committee (undersecretaries and directors), and Sub-Committees.

Department of Trade and Industry

• Takes the primary role in negotiating and reviewing international trade agreements;

• Develops, promotes, regulates trade, industry, and investments;

• Develops foreign trade;• Promotes exports;• Implements measures to protect Filipino

enterprises against unfair foreign competition and trade practices;

• Regulates importation

DTI – Bureau of International Trade Relations

• Primary agent responsible for all matters pertaining to foreign trade relations, especially market access and related matters;

• Formulates positions and strategies for trade negotiations;

• Coordinates with other government agencies to ensure consistency in the government’s positions in trade negotiations and related activities;

• Consults with industry groups and provides technical advice and information;

• Identifies tariff and non-tariff barriers affecting products of export interest to the Philippines

Department of Foreign Affairs

• Conducts the country’s foreign relations;• Serves as the channel for matters involving foreign relations;• Negotiates treaties and other agreements;• Promotes trade, investments, tourism, and other economic relations with other countries

DFA Offices involved in international trade

• Office of the Undersecretary for International Economic Relations (OUIER)• Office of the Undersecretary for United Nations and International Organizations (UNIO)• Office of the Undersecretary for Policy (OUP)

National Economic and Development Authority

Central economic and planning agency that is constitutionally mandated and primarily responsible for formulating social and economic policies, plans and programs

Department of Agriculture

• Provides domestic support• Exploits market access advantages

Inter-agency involvements (by agreement)


• Technical Committee on WTO Matters (TCWM)• Philippine Permanent Mission to the WTO

ASEAN/APEC

• Philippine Council on ASEAN and APEC Cooperation

Bilaterals

WTO Matters

• Philippine Coordinating Committee

• Joint Coordinating Committee for NAMA (JCC-NAMA)

Overview of presentation

I. Industrial Policy – Some ThoughtsII. Current Institutional Framework on

Trade Negotiations III. Current IssuesIV. Proposal to Create the Philippine Trade


Current Issues

(1)Proliferation of bilateral trade agreements

(2) Lack of transparency and coordination among government agencies

(3) Lack of consultation with industry and the private sector

(4) Need for re-examination of current policies(5) Need for unified, coordinated approach to trade

and tariff policy

Current Issues

(1) Proliferation of bilateral trade agreements(2)Lack of transparency and

coordination among government agencies

(3) Lack of consultation with industry and the private sector

(4) Need for re-examination of current policies(5) Need for unified, coordinated approach to trade

and tariff policy

Current Issues

(1) Proliferation of bilateral trade agreements(2) Lack of transparency and coordination among

government agencies(3)Lack of consultation with industry

and the private sector(4) Need for re-examination of current policies(5) Need for unified, coordinated approach to trade

and tariff policy

Current Issues


government agencies(3) Lack of consultation with industry and the

private sector(4)Need for re-examination of current

policies(5) Need for unified, coordinated approach to trade

and tariff policy

Current Issues


government agencies(3) Lack of consultation with industry and the

private sector(4) Need for re-examination of current policies(5)Need for unified, coordinated

approach to trade and tariff policy

Overview of PresentationOverview of Presentation

I. Industrial Policy – Some ThoughtsII. Current Institutional Framework on Trade Negotiations III. Current IssuesIV. Proposal to Create the Philippine Trade


ESTABLISHING A FRAMEWORK FOR RESPONSIBLE AND

ACCOUNTABLE TRADE NEGOTIATIONS BY

CREATING THE PTROHB 56

Deputy Speaker Lorenzo Tañada III

Declaration of Policy

The State shall pursue a trade policy that serves the general welfare, creates jobs, ensures food security, rural and industrial development and utilizes all forms and arrangements of exchange on the basis of fair trade

Market access in itself is not the end goal of trade negotiations.

Objectives of the BillObjectives of the Bill

Coherent and cohesive trade policyConsultative mechanismPenalties for non-consultationTransparencyAccountabilityAssert Congress’ power over commerce

MechanismMechanism Establishment of the Trade Rep Office attached to the

Office of the President Trade Rep and 3 Deputies are tenured but with

limitations in appointments as well as post tour of duty Strong research and databanking arm Strong legal support Inter-agency Coordinating Committee Multi-Sectoral Advisory Committee Congressional Oversight Committee

Functions of PTRO Conduct research & legal studies to enhance trade

policy formulation Obtain, collate & maintain a database Consult stakeholders Formulate the Philippine trade position Negotiate trade & investment agreements Advise the Pres & Congress Assert & protect the country’s interests under all

trade & investment agreements

Maraming salamat po!

Business

Industrial Policy and the Need for Institutional Reforms in International Trade Policy Making & Negotiations