FairTradeWeb

Claims further lib is economic suicide

Published in the June 6, 2008 issue of Malaya

Saying that any further liberalization is economic suicide, multisector group Fair Trade Alliance (FairTrade) yesterday said the government should reject the new text drafts issued by trade negotiating committees of the World Trade Organization (WTO) because it remains biased to developed countries.

FairTrade convenor Dave Diwa said while other developing countries have voiced out their criticisms, the Philippines has not made any public statement about new trade developments arising from the new draft texts issued by trade negotiating committees of the WTO in agriculture, industry, fisheries, and services.

The new drafts hope to address the issues and close the gaps between and among the trade interests of the developing and the developed countries.

FairTrade said government should break its silence and put the country’s interest ahead in responding to the drafts, adding that it should first address the food and fuel crises before accepting any economic liberalization that will only exacerbate poverty and economic weakening.

He said at this time of rising food and fuel prices “accepting new and further economic liberalization without the necessary preparedness and trade flexibilities for the vulnerable sectors is tantamount to economic and political suicide.”

“Upon closer examination of the drafts, it still remains highly skewed and imbalanced in favor of the developed countries,” Diwa said.

He said that while pressuring developing countries to open up their agriculture by imposing tariff-slashing formulas, the United States, European Union, Japan and Australia still maintain huge agricultural subsidies The US for example maintains a farm subsidy cap $13 billion,.

Diwa also noted that talks on special and differential treatment such as the special products (SP) and special safeguard mechanism (SSM) that developing countries are hoping to get out of the negotiations to sustain the livelihood of millions of small-scale farmers and fisherfolk in the rural communities are not moving forward.

Diwa said developing countries such as Brazil , India , Indonesia and some African countries are highly critical of the new texts.

He said that these countries lament the fact that there remains no progress in agriculture such as on the core development issues especially on special and differential treatment for developing countries, trade-distorting domestic subsidies and the African issue of cotton export subsidies.

In a fresh bid of WTO Director General Pascal Lamy to conclude the Doha Round, the Fair Trade Alliance (FairTrade) urges the Philippine trade negotiators to first address fully the twin-problem of food and energy insecurities in the country before accepting any new economic liberalization that will further exacerbate poverty and economic weakening.

The WTO negotiating committees had recently come up with new “breakthrough” drafts in AoA, NAMA, GATS, etc. hoping to address the issues and close the gaps between and among the trade interests of the developing and the developed countries.

“However, upon closer examination of the drafts, they remain highly skewed and unbalanced in favor of the developed countries. Developed countries like the US, EU, Japan, and Australia are pressuring developing countries to open up their agriculture by imposing tariff-slashing formulas,  but they themselves do not want to slash their huge agricultural subsidies. For example, the US is maintaining a farm subsidy cap of US$ 13 billion. On the other hand, the talks on special and differential treatment such as the special products (SP) and special safeguard mechanism (SSM) that developing countries are hoping to get out of the negotiations to sustain the livelihood of millions of small-scale farmers and fisherfolk in the rural communities are not moving forward.” Fair Trade said.

Developing countries such as Brazil, India, Indonesia and some African countries are highly critical of the new texts. They said that in agriculture there was still no progress achieved on the core development issues especially on special and differential treatment for developing countries, trade-distorting domestic subsidies and the African issue of cotton export subsidies. In industrial and fishery goods, the formula for tariff reduction is highly disproportional and inequitable because it will slash tariffs more on developing countries than on developed ones. The Philippines, on the other hand, has not made any public statement about these new trade developments.

Continue reading ‘New WTO talks must consider impact of rising food and energy insecurities-FairTrade’

SocialASEAN.org is now online and can be accessed here. From the SocialASEAN.org blog:

… project proponents: Fair Trade Alliance, Union Network International and ASEAN Service Employees Trade Union Council (ASETUC) came up with SocialASEAN–-a blog to consolidate and network the civil societies, trade unions and NGOs in the region in the ASEAN debate and discussions. The objective is to build an online community through comments and discussions and to serve as ASEAN’s voice in the cyberspace.

SocialASEAN.org is calling civil societies and trade unions to contribute articles regarding trade and labor developments in the ASEAN. For more information, kindly email adamendoza[at]gmail.com *.

* replace [at] with @

Wigberto Tañada, Lead Convenor

We, at the Fair Trade Alliance (FairTrade), are pleased to be a co-sponsor of this Inter-University Conference, which seeks a deeper discussion of the social and human dimension of regional integration, a process inextricably linked with globalization. We join our brothers and sisters from the UNI Global Union and other civil societies in their call for a people-centered regional integration. We commend the socially-committed academics and scholars for bringing about a Conference focused on People Solidarity and involving representatives of the working people as direct participants. Together, we can help shape the social and labor rules of regional integration to make the process inclusive, broad-based and pro-people.

Yes, ASEAN or the Association of Southeast Asian Nations is fast integrating, in fact, it is hailed as the core of an emerging East Asian economy, which includes China, the new economic dragon of Asia, and Japan, the original Asian dragon, and the tiger economy of South Korea.

And yet, recent reports of the UNDP and the ILO tell us that East Asia, Southeast Asia in particular, has been experiencing deeper inequality and rising unemployment under economic liberalization and globalization. Some countries are even experiencing jobless growth. Thus, the 2006 Asia-Pacific Human Development Report: Trade on Human Terms of the UNDP posed the following:

…the region has embraced free trade, but has free trade embraced the poor?

This development is vividly illustrated by the present food crisis being experienced by the Filipino poor, urban and rural, due to ill-advised World Bank policy of deregulating and liberalizing agriculture, which has been enthroned in the last 25 years or so. Today, the Philippines, from a net rice exporter in the late l970s, has become the number one global importer of rice.

Likewise, the Philippines has been experiencing a pattern of jobless growth, as it has become dependent on a few growth industries such as IT/ICT and electronics while losing all other industries, from shoe and textile production to tire and steel manufacturing.

To a certain extent, this phenomenon of hollowing out of the economy – the shrinking of industry and agriculture — has led to similar patterns of jobless growth and rising unemployment in other ASEAN and Asian countries, with the exception of a few robust economies. As the UNDP and ILO put it, this is the reason reason why some countries in the region have become vendors of global services, meaning providers of migrant labor, those who do the SALEF jobs – shunned by all except by a very few.

Continue reading ‘Fair Trade-Fair Labor: The missing development framework in a globalizing ASEAN economy*’

The multisectoral Fair Trade Alliance supports the national government’s inquiry into Meralco’s alleged cost padding and overcharging, said Raul Segovia, a convenor for consumers of the Alliance. However, Segovia also adds the need for the government to look into the other areas of the power sector such as the atrocious sweetheart contracts between NAPOCOR and the independent power producers (IPPs).

Meralco is under government pressure to cut down electricity rates and measures were set to make the country’s largest power distributor explain its alleged ’system losses’ and ‘high-priced electricity purchases’ from Meralco’s own IPPs, both of which are eventually passed on to the helpless consumers.

However, Segovia said that the government should not limit its investigation to Meralco alone. “As it is, more than half of the cost of electricity is due to Napocor’s purchase agreement with the IPPs, a non-transparent agreement requiring Napocor to purchase all the produce of the IPPs, whether needed or not, at guaranteed prices”, said Segovia.

President Gloria Macapagal-Arroyo has called on Meralco to lower power rates to appease foreign business groups, which have complained of high power costs, and to ease the burden on the poor who are saddled with rising food and oil prices.

“The government should also look into the Shell-Malampaya production sharing arrangement and into the privatization program for the power sector,” Segovia added. “Is privatization the solution to the corruption in the power sector, or is it not the evil cause of a dysfunctional power sector in the country?”

FairTrade is a broad coalition of formal and informal labor, industry, agricultural, non-governmental organizations, and youth pushing for trade and economic reforms.

FTA joins call for probe on Meralco ‘overcharging’ [GMANews.TV]
ERC chief orders review of systems loss charges [ABS-CBN News Online]
FTA seeks probe of Napocor’s IPP contracts [Philstar.com]
Consumer advocate supports probe on alleged Meralco’s overpricing [Individual.com]
Group backs gov’t move to probe Meralco [Sun.Star Manila]
Consumer advocate supports probe on alleged Meralco’s overpricing [Interactive Data Managed Solutions]

Published in the May 9, 2008 issue of Business World
By Jeffrey Valisno

FILM INDUSTRY stakeholders, members of multi-sectoral groups, and legislators yesterday called for the immediate approval of a bill seeking to lower the amusement taxes levied by cities and municipalities on local movies.

In a meeting yesterday, members of the Film Academy of the Philippines (FAP), Fair Trade Alliance (FTA), and senators and congressmen vowed to work on enacting a law that will cut amusement taxes to 10% from the current 30%.

Leo G. Martinez, FAP director-general, said cutting amusement taxes will revive the ailing P4-billion movie industry.

Mr. Martinez noted local movie producers currently pay 30% in amusement taxes to the local government, and 12% value-added tax to the central government.

“So almost 42% of what the movie will earn just go to taxes,” he told BusinessWorld in an interview.

He claimed the 42% tax on local movies is the highest in the world, forcing producers to make less movies.

“The local film industry is heavily taxed. Our industry is taxed more than the gambling industry, which is currently just paying between 10% and 18% taxes,” Mr. Martinez said in Filipino.

Freddie de Leon, FTA representative, said there is a need to cut taxes so that the local film industry can survive stiff competition from Hollywood blockbusters, and even movies from China and India.

Job generator

“We must not forget the role of the Philippine film industry as a potential job generator, potential culture enhancer, potential nation builder and potential platform for industrial development. The nation is neglecting an almost sure winner,” Mr. de Leon told reporters.

He said since taxes on local movies increased in 1996, the number of local films has decreased through the years — from 240 to less than 50 per year.

FTA noted that in 2006, 58 local movies had to compete against 2,087 foreign films, mostly from Hollywood.

Quezon Rep. Lorenzo R. Tañada III (4th district) vowed to ask his colleagues to support the proposed law’s immediate passage.

He said the committee on local government has formed a technical working group on the bill’s final version.

Meanwhile, Myra Roa, chief legislative officer of Senator Ramon M. Revilla, Jr., told reporters that the Senate committee on local government is also working double time to ensure the committee approval before Congress adjourns on June 13.

Ms. Roa said the committee has called a hearing last week to ask for the position papers of concerned groups.

She said that based on that hearing, the Department of Finance said the movie industry can save about P700 million once the amusement taxes are cut to 10%.

In the same event, Quezon City Councilor Antonio E. Inton, Jr. asked local governments to support the bill.

Mr. Inton, who represented Mayor Feliciano R. Belmonte, Jr., said the city has shown that reducing amusement taxes will help revive the film industry.

Quezon City has scrapped amusement taxes on local movies since 2006. Only foreign movies are levied the 30% amusement taxes.

Looking at the experiences of India and Korea, it becomes clear that the survival of an industry, in this case the film industry, largely depends on the degree of support it gets from its government. When Bollywood was still in its formative years, the government used to subsidize art films. Federal and state grants were also made available for non-commercial films on Indian themes. These grants were accompanied by government sponsored film festivals, which showcased locally produced films. To further develop their local film industry, India created one-stop shops that allowed movie production with less hassles. These actions proved to be beneficial since Bollywood is now considered as a global phenomenon that produces 800 to 1000 movies per year.

Some forty years ago, the Philippine film industry is said to have reached its golden era. Filipinos are more than willing to go to the cinemas and religiously watch locally produced films. They scream their lungs out whenever their idols’ faces are flashed on the silver screen. These idols are not Hollywood stars. They are homegrown talents as much as their movies are. Fans seemed to have an unquenchable thirst for movies, Filipino movies that is. Indeed, the Philippine film industry took to the skies during these years and for a few more years that followed.

Surprisingly, the numbers of theater houses during those days are relatively few. There are a number of reasons why the film industry continues to plunge. Two years ago, 58 Filipino competed with 2087 foreign films mostly from Hollywood. This only means that there aren’t enough Filipino movies to choose from. Despite this, UD$7 million out of the US$76 million come from a two-week run of exclusive Filipino films during the Metro Manila Film Festival. If a mere two-weeks can sell 47 million tickets, about 129,000 people per day, imagine what a longer run would do for the recuperation of the Philippine movie industry.

“We must not forget the role of the Philippine film industry as a potential job generator, potential culture enhancer, potential nation builder and potential platform for industrial development. The nation is neglecting an almost sure winner,” Dr. Rene Ofreneo, executive director of Fair Trade Alliance said.

It has been more than a year since the Fair Trade Alliance started holding dialogues with various Film Industry organizations and individuals. These dialogues were designed to determine the current situation of the Philippine film Industry based on the perspective of those who are directly involved in movie production i.e. actors, directors, production managers, scriptwriters, etc. In turn, the dialogues resulted to the Philippine Film industry Road Mapping Project.

Since the inception of the project, parties involve have been actively seeking the help of various institutions to ensure the continuity and completion of the project. Fortunately, there are still those who think that the Philippine Film Industry is worth saving.  Last month, a partnership was forged by the Fair Trade Alliance, Office of Senator Ramon “Bong” Revilla, Jr., Office of Quezon City Mayor Feliciano Belmonte, Jr., and the stakeholders of the film industry through the Film Academy of the Philippines. With this partnership in place, it is being expected that the Film Industry Road Mapping Project will be completed in a year’s time.

“It is high time that we all put are hands into something that has the potential of benefiting the Filipino people economically and culturally among others,” says FairTrade.

A press conference will be held on May 8, 10am-noon, at Max’s Restaurant, Elliptical Road, Quezon City to launch the abovementioned partnership.

The struggle to afford basic food staples such as rice was the focus of many of Labor Day demonstrations in Asia, where rallies were patrolled by huge numbers of police.

Thousands of workers in the Philippines marched in various cities to demand higher wages in the face of inflation that has sent food prices soaring.

President Arroyo made surprise visits to regional wage boards Thursday to show her support for an increase in minimum wages.

In an interview with abs-cbnNEWS.com/Newsbreak, Prof. Rene Ofreneo, executive director of the multi-sectoral coalition, Fair Trade Alliance (FTA), said Arroyo’s endorsement of a wage hike is part of the government’s effort to prevent food riots.

He noted that this was the first time that a chief executive had paid such close attention to regional wage boards.

“There is an assessment by Malacanang that the food crisis, which is both global and local, has created a very sensitive situation which can ignite so much social tension,” he said.

Since poor Filipinos spend around 60% of their family income on food, he said a doubling of rice prices will surely lead to widespread hunger.

Labor leader Rene Magtubo of the workers’ party, Partido Manggagawa, warned that once cheap rice is no longer available during the lean months, food riots may also occur in the Philippines.

“Filipinos are patient, but they have a tipping point. What if there’s no rice available?” he said.

Economic relief

Labor federations have demanded wage increases of between P80 to P125 per day across-the-board to help wage earners cope with the food crisis.

“It is government’s obligation to give immediate economic relief. Given the situation of 11 million Filipinos living below $1 a day, and the wide gap between wages and cost of living, which is P858 per day for a family of six, you can call this a national calamity,” Magtubo said.

In its Multi-Sectoral Declaration for Labor Day, the Fair Trade Alliance urged the Arroyo government to “provide immediate economic relief to the poorest of the poor, both in the urban and rural areas, by way of food subsidy and the creation of emergency emmployment programs.”

The FTA also proposed that the government suspend the expanded Value-Added Tax on food, medicine, water, electricity, transportation “for the duration of the food crisis.”

“The economic crisis is sharper and more intense this year,” said Renato Reyes, secretary general of the left-leaning group Bayan. “Workers in the Philippines have every right to be angry and frustrated.”

The militant May One Movement demanded that Arroyo step down, accusing her of failing to put in place relief measures amid soaring prices of the staple rice or prioritizing a legislated wage increase.

“Workers are hungry and angry over the Arroyo government’s callousness in addressing demands for wage hikes, price controls and significant economic reforms,” said Elmer Labog, the group’s chairman.

“Calls for a legislated wage hike are justified now more than ever with the rising cost of all products, utilities and services,” he said.

Aside from wage increases, demonstrators also called for the prohibition of contractualization and the provision of more jobs to address the country’s unemployment problem.

Continue reading ‘Workers demand economic relief from food crisis’

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Published online in ABS CBN News Online
By Isagani de Castro, Jr.

The Philippine labor movement has weakened considerably and its militancy has softened. This trend isn’t likely to change in the coming years unless there’s a major economic policy shift, labor analysts said.

“The labor movement, like it or not, its future is linked to a strong, solid agro-industrial base. If you do not address that, it will continue to be weak,” Dr. Rene Ofreneo, former dean of the School of Labor and Industrial Relations of UP and executive director of the Fair Trade Alliance, told abs-cbnNEWS.com/Newsbreak.

“Decent wages require decent jobs. Decent jobs require decent industry. Decent industry will prosper only in a well-managed economy. So it’s intertwined,” he said.

Membership in labor organizations, including unions, is one barometer of a strong labor movement.

Unionized workers, especially those with collective bargaining agreements, often have better pay and working conditions than non-unionized labor.

On these scores, the Philippine situation is worrisome.

Official labor statistics and surveys show that despite increasing population (88 million) and labor force (36 million), membership in labor organizations has declined from over 3 million in the mid-1990s to 1.8 million in 2006. (See table)

The number of collective bargaining agreements (CBAs) in the private sector has also fallen from a peak of 4,500 in 1992 to 1,742 in 2006. (See table)

In addition, there are now less workers covered by CBAs. In recent years, only half a million workers, out of around 16 million wage and salary earners, were covered by CBAs. In 2006, those covered by CBAs declined even further to 250,000 workers.

No longer as militant

The weakness in numbers is also accompanied by a softening of labor militancy.

Rene Magtubo, former representative of the workers party, Partido Manggagawa, told abs-cbnNEWS.com/Newsbreak many workers and unions “have become conservative in their actions.”

“They have this sentiment that nothing happens if you struggle. Things don’t change because of the weak labor movement,” he said.

One problem is the negative attitude of many owners of enterprises toward unionism.

“There’s this stigma: if they unionize, they risk losing their jobs–even if they win their labor cases at the labor department,” Magtubo said. “Workers are afraid to unionize.”

From over 1,000 strike notices filed in the late 1980s and early 1990s, the number of strike notices filed fell to 353 in 2006. This is about the same level during the middle years of martial law.

The drop in number of strikes is even more dramatic.

From a peak of 581 in 1986, the year democracy was restored, the number of strikes/lockouts dropped to below 100 starting in 1994. And in 2006, there were only 12 strikes/lockouts, the lowest number ever recorded. (See table)

Magtubo said many problems faced by workers can only addressed by the government. Going on strike in factories will not help them attain these demands.

“The problems are socio-economic policies. Before it was per factory. Now, it’s the economic policies which affect everyone, especially our homegrown industries,” he said.

Flexibility

One of the biggest problems of the labor movement is the expanding use of non-regular workers such as casuals and contractual workers.

“The most common is hiring through agencies. Another is outsourcing, where you don’t bother whether the workers of the agency are regular,” Ofreneo said.

As early as the 1990s, data from the labor department already showed an upward trend in non-regular workers.

Continue reading ‘RP labor movement weak, no longer militant’