With US comebacking presidential aspirant Donald Trump pushing for stronger trade restrictions, including slapping 60 percent or more tariffs on all Chinese goods and 10 percent universal tariff hikes, Finance Secretary Ralph Recto said this would adversely affect international trade, including those from the Philippines.
Recto, in his attendance to the Intergovernmental Group of Twenty Four (G-24) Board of Governors in Washington, DC on Tuesday, October 22, voiced concern over candidate Trump's possible return to the White House.
The Finance Secretary was quoted as saying: “we are concerned that there will be a setback on multilateralism, particularly in trade as well. We know that the driver of global growth is more trade. So, that is a concern.”
Republican nominee Trump is seeking to return to the White House this coming November.
In the latest World Economic Outlook, the International Monetary Fund (IMF) projects global growth to remain “stable yet underwhelming” at 3.2 percent this year and next year, Business World reported.
“In the Philippines, we count on our relationship with the United States to do maybe more out-shoring to the Philippines, and hopefully that will be done also with other members of the G-24,” Recto said.
The US was the top destination of Philippine products in August, with a total export value of $1.22 billion (P70.7 billion).
The Philippine government also depends on its defense and security partnerships with the US to lessen the impacts of Trump’s protectionist policies. “We have a Mutual Defense Treaty. We are hoping to leverage that relationship so that we do not get affected much,” Recto told the briefing in Washington.
Under the 73-year-old defense pact, Washington and Manila are bound to defend each other in case of an armed attack on its forces, public vessels or aircraft.
Recto cited many US companies’ interest to invest in the Philippines, which bodes well for the two countries’ decades-long relationship.
The Philippines and US in April inked several military and trade deals with Japan, including the creation of a Luzon Economic Corridor.
“Manila is hoping that Washington under Trump will continue its ironclad commitments with the strong bilateral relationship,” Chester B. Cabalza, founding president of Manila-based International Development and Security Cooperation, said.
Hansley A. Juliano, an Ateneo political science professor said a potential Trump presidency is a “reverse back to the 2016 wind-down of American engagement in Asia,” which is unfortunate considering the many developments towards building a wider alliance to protect Philippine interests within the West Philippine Sea and Asia-Pacific region. .
If Trump wins, the Philippines should strengthen its relationships with other partners like South Korea, Japan and Australia, and reassess Southeast Asian countries’ stand on South China Sea tensions, Juliano said.
G-24 Secretariat Director Iyabo Masha noted that the World Trade Organization (WTO) should level trade negotiations amid growing protectionism in many countries.
“What we are calling on is for the WTO to become the center of trade discussions, trade negotiations, and for the World Bank and the IMF to rise up to a much more multilaterally engaged organization that will be able to at least influence the kind of policies that countries take one way or the other,” she told the briefing.
“One thing is clear — any slowdown in the global economy due to these new economic realities is bound to hit developing countries the hardest,” Recto, who serves as chairman of the G-24 Board of Governors, said.
To better support member countries, the board called on the IMF to create a new mechanism to support countries with sound fundamentals during liquidity crises, Recto said as he asked the WB to set “more ambitious” goals for its concessional and non-concessional financing.
Recto also called on the Washington-based multilateral lender to reduce its borrowing costs to better support developing economies.
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