On trade expansion and fiscal consolidation

The US tariff escalation policy generated heavy public discussions and fears last April, but these have simmered down recently. There are winners and losers in the non-disruption in trade, and there are also winners and losers in trade disruption. In conventional economic trade theory, there is “net gain” (gainers and winners outnumber losers) in free trade which at the optimum implies zero tariffs and very few non-tariff barriers.

- BIENVENIDO S. OPLAS, JR.

Last Tuesday, June 10, I attended a forum called “The US-China Tariff Trade War: Implications for the Philippines” at the AIM Conference Center in Makati, organized by Leverage International (Consultants), Inc. Among the panelists were Mike Toledo, Chair of the Chamber of Mines of the Philippines; Dr. Jess Arranza, Chair of the Federation of Philippine Industries; and Ruth Yu Owen, Chair of the Energy Committee of the Management Association of the Philippines. Jose Luis Yulo was the forum chairman and moderator.

I liked Mr. Toledo’s discussions on the mining export ban and the need for mining processing after a 10 year transition and preparation period, Metro Pacific Investments Corp.’s corporate farming, and Terra Solar projects; Mr. Arranza’s talk about the economic damage caused by smuggling and illicit trade on Philippines industries; and Ms. Owen’s talk on solar energy where she also recognized the need for coal and gas plants for baseload power generation.

Later in the afternoon, my former boss (and former Congressman, and former Finance Secretary) Gary Teves talked about macroeconomics and trade and he emphasized that we should focus on measures where we have control, like our own economic and trade policies, and not on events and policies abroad over which we have little control. I support that.