Talk Beijing into trade if not sea row, ASEAN told
THE PHILIPPINES must take the lead in bringing down trade barriers to deepen economic integration and urge China to prove its sincerity in cooperating with the region when Manila holds the next Association of Southeast Asian Nations (ASEAN) leaders’ meeting in November.
Business leaders echoed the sentiment of Malaysian Prime Minister Dato Sri Mohd Najib bin Tun Abdul Razak who pointed out, during the Prosperity Summit for All last Friday, that non-tariff barriers and measures surged from 1,634 to 5,975 between 2000 and 2015, even as the region pursued the creation of a single economic community.
Alfredo M. Yao, president of Zesto Philippines, Inc., said ASEAN economies have made progress in reducing a number of tariff rates to zero, but impediments to free flow of goods, services and investments in the form of restrictions to imports or exports remain in place.
“The tariff side is handled, but on the non-tariff side, we should look at harmonizing them,” said Mr. Yao, a former president of
the Philippine Chamber of Commerce and Industry (PCCI). The beverage firm has a presence in Indonesia and Thailand.
Philippine companies have been taking advantage of the low cost of capital to build up their war chest and increasingly expand their business empire in Southeast Asia.
“On the investment side, if taxes on repatriation of earnings can be relaxed similar to trade, that will definitely help enhance intra-regional investments,” AC Energy Holdings, Inc. President Eric T. Francia said in a mobile phone message.
The holding firm for the Ayala group’s energy investments is developing a 75-megawatt (MW) wind power project in Indonesia after winning the bid to acquire multinational energy firm Chevron’s geothermal assets in Indonesia and the Philippines.
Conglomerates Ayala Corp., Metro Pacific Investments Corp. and Aboitiz Equity Ventures, Inc. have recently ventured into ASEAN to satisfy their thirst for growth. Homegrown companies such as San Miguel Corp., Jollibee Foods Corp. and Gokongwei-led firms Universal Robina Corp. and Cebu Air, Inc. have made inroads in the region to diversify their revenue sources even before efforts to integrate the ASEAN-member economies took off.
The second leaders- level meeting that the Philippines will convene this year will be held in November, together with ASEAN’s dialogue partners such as Australia, China, India, Japan, New Zealand, the Republic of Korea, Russia and the United States.
“NOT COMPETING” BUT “SUPPLEMENTARY”
Beijing scored a diplomatic victory at the end of the 30th ASEAN Summit last week in Manila, with the bloc’s concluding document evading allusion to the landmark 2016 international ruling invalidating China’s vast maritime claims and its reclamation activities in the sea.
“If China were to be a real leader, for example in keeping peace in North Korea, I think it must [also] keep peace in the South China Sea,” Federico M. Macaranas, economics professor at the Asian Institute of Management (AIM), said in a telephone interview, adding that ASEAN business communities and people-to-people organizations should “assert their voice” before Beijing.
To show its sincerity, China can make room for ASEAN products as the former may become dependent on the region for raw materials and “sophisticated” products in the long term, Mr. Macaranas said.
“China would have to grow its own economy in a different way so magiging [it will become] supplementary. There are many products that can co-exist and not compete with China. So making room for these kinds of products from Asia would become a very good way of helping ASEAN,” he said.
Mr. Macaranas said discussions on ASEAN’s apparent soft stance on China “may not be appropriate” since there are efforts between the bloc and Beijing to create a Code of Conduct intended to provide the framework for nations to settle territorial disputes in the region peacefully.
“In today’s very complex world, we cannot resolve great and deep issues in a very, very short time,” Mr. Macaranas said.
The Philippines’ relations with China have made a sharp turnaround under President Rodrigo R. Duterte, as Manila courts the Asian superpower for funding to bankroll his administration’s ambitious infrastructure program.
Former President Benigno S.C. Aquino III, whose administration filed a case and won against China in a United Nations-backed tribunal over the sea dispute, had consistently lobbied for an assertive and unified front in challenging Beijing ’s maritime encroachment.
“It is definitely very demoralizing to those within the government and beyond who have been pushing for respect for international law in the South China Sea. It could also embolden China to double down on securing its strategic supremacy in the area. Above all, undermine ASEAN centrality,” said foreign policy expert Richard J. Heydarian.
Aside from the Philippines, three other ASEAN countries have active claims in the South China Sea, namely Vietnam, Brunei, and Malaysia.
SILK ROAD SUMMIT
Two weeks prior to the summit, Jaime Augusto Zobel de Ayala, a prominent business leader and chairman of the Ayala group, said the government’s independent foreign policy that set the stage for improved ties with China bodes well for the country.
President Duterte is set to attend the One Belt, One Road Summit — aimed at reviving an ancient silk road trading route that would connect Asian markets with economic circles in Europe — in China this month.
“If we become part of that infrastructure investment network that China is building, continue the globalization trend that have taken place and the Philippines becomes a part of it, then I think it augurs well for our country,” Mr. Zobel said.