“Free Trade” to deepen poverty and inequality in Southeast Asia

Regional economic integration should advance and not threaten peoples’ interests

Asia-Europe Peoples Campaign vs. FTAs [1]
on the 40th ASEAN Minister’s Meeting in Manila (July 30-August 2, 2007)

President Gloria Macapagal Arroyo’s keynote speech at the opening of the 40th ASEAN Minister’s Meeting in Manila today, trumpeted yet again the vision of ASEAN as one “Caring and Sharing” community, echoing the theme of the Philippine chairmanship of the now 40 year-old regional grouping of 10 Southeast Asian countries.

According to Arroyo, this vision of an ASEAN Community is “anchored first and foremost, on economic integration with a focus on social justice and raising the standard of living of the poor in the region”. Her remarks that ” building the ASEAN Community and voice is a long-term endeavor” that needs no “short cuts and quick fixes” but the determination is there to “build a community that will provide a more secure, stable and prosperous life for all people” seem to further underscore a development agenda for the region that is sustainable and pro-people.

We feel that these statements however are empty rhetoric. We are concerned, the references to social justice and poverty alleviation notwithstanding, that ASEAN’s vision of deepening integration will lead not to shared prosperity and solidarity among the peoples’ of the region but to deeper poverty and inequality and wider divisions among the countries within the region.

Given the economic diversity in ASEAN, with the richest country Singapore having a per capita GDP of US $25,207 compared to that of Burma with only $166 (only 0.6 percent of Singapore’s per capita GDP) and the fact that the more prosperous countries like Singapore, Malaysia and Brunei cornering the lion share of trade and investment flows in the region, it is not too difficult to see which countries will benefit from a development agenda that promotes greater trade and investment liberalization and which countries will be left behind.

We are concerned over the pre-eminence given to Free Trade Agreements (FTAs), as the driving force of this regional integration process. Of particular concern for us is the EU-ASEAN FTA that was recently launched in Brunei in May 2007. The EU-ASEAN FTA and similar trade and economic partnership agreements being negotiated advance the corporate interest at the expense of peoples needs. The fast-paced, aggressive, and ambitious liberalization agenda underpinning these FTAs will threaten jobs and peoples livelihoods.

Regional economic integration will lead to serious policy adjustments at the country level. In Agriculture, these adjustments could lead to increased “commercialization” of ASEAN agriculture and could lead to serious negative consequences on incomes of small farmers. The policy adjustments could lead to greater pressure to transform land ownership structures and land use priorities and transform the ways by which food is produced in favor of more commercial food production.

In fisheries, manufacturing, and industrial sectors as in the services sectors, the large and powerful EU corporations, which dominate global trade in these sectors, will most likely set the development agenda. The EU agenda on NAMA and the services negotiations in the World Trade Organization underscores its position to reduce drastically the tariffs in the developing world on industrial and fishery goods and open services markets globally. These drastic reductions in industrial and fishery tariffs and liberalization of the services sector would have devastating effects on the economies of the poor countries and their ability to utilize trade policy as EU did in the past to pursue their own development agenda.

When leaders speak of “creating a dynamic force in order to maximize the benefits of globalization” they should be thinking more of enhancing the capacity of peoples in the ASEAN region to sustain descent jobs and livelihoods. They should be talking about promoting and strengthening the labor sector through the recognition of workers rights and the adherence to core labor standards. They should be working to protect the interests of small farmers and fishers against the influx of highly subsidized agriculture and fishery products. The agenda should be towards increasing food sovereignty in the region, with countries having the capacity to produce staple crops to meet domestic needs. The agenda should be towards cooperation among countries towards addressing peoples needs like access to clean and potable water, to healthcare, education, decent housing in the region.

[1] The Asia-Europe People’s Campaign vs. FTAs is a network of social movements and NGOs in the Philippines working together to analyze, monitor and campaign around the proposed EU-ASEAN free trade agreement.

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