A multi-sectoral approach to trade

In any policy making or policy implementation effort, close consultation and coordination between the government, the private sector, and the academe is paramount. Such is because the diversity of interests and the complexity of interweaving functions in the process require as broad a forum of deliberation as possible with all groups in order to arrive at effectual policies that would serve the common good. Otherwise, the country would risk serving only a handful of interests and undergoing successive policy changes that would undermine the needs of consistency, predictability, and transparency.

The complexity of international trade

The field of international trade is fluid and constantly evolving at the multilateral, regional and bilateral levels. Each day, new proposals are being presented before various international bodies such as the World Trade Organization (WTO) and the Association of Southeast Asian Nations (ASEAN), and government agencies such as the Department of Trade and Industry (DTI) and the Department of Agriculture (DA), all of which (if adopted) would have a significant impact in the way business is conducted in the country. The Philippines follows the international law doctrine of “incorporation”, which means the outcome of any treaty negotiation, irrespective of whether the same was properly conducted or not, is binding on the country, its citizens, and businesses.

These proposals, drafts, negotiating texts, and discussions are highly technical and are based on massive amounts of quantitative and qualitative information culled and synthesized from the purview of several disciplines (e.g. social, applied and natural sciences). Any response or comment within the field of international trade therefore necessitates a similar multidisciplinary approach.

The need for an effective consultative partnership

In light of the foregoing circumstances, both business and government should forge an effective partnership to ensure that outcomes of negotiations would be to the interest of the Philippines. However, such a partnership should be solidified with the constructive involvement of the academe, preferably at every stage – to provide intellectual and scientific support.

On the part of business, it is imperative that it gathers as much information and intelligence regarding its issues as possible. It would then require consultations with the academe to expand the capability of business to analyze and quickly react to the information it would receive.

It is important to include institutional memory in terms of both human and material resources in one’s calculations. This may require a historical survey of the issues heard by the institutions, the manner by which they responded, and the positions they took while taking into consideration the background of the personnel (persuasions, competencies, staff turnover etc.), the allocation of its resources (to measure priority), and its reputation in the eyes of the local and international public.  

Points for an effective advocacy

The logic of any advocacy to be fostered by the private sector should be clear. The end purpose of any petition will have to be articulated categorically and its impact on various sectors foreseen beforehand. This will allow for counter-arguments to be contemplated well ahead of time. The support of various groups, particularly with those who share similar interests, must be enlisted. From the beginning, private sector groups should already have a definite knowledge of allies, oppositors (both actual or potential), and neutral parties. This knowledge must be complemented with an assessment of the strengths and weaknesses of each and how these can be harnessed by companies or groups to further reinforce their position.  

In any event, public support is essential in having an advocacy effectively heard and carried out. Thus, means should be sought to have the strongest points of an advocacy made available to the public by way of press releases, and public versions of position papers and academic studies. As it would prove useful in having the message of advocacy have deeper and wider reach, the media is another effective partner in this regard. 

For this arrangement to work, however, the private sector should be well organized and steeped in the rigors of international trade, not to mention properly versed in the complex, technical parlance of the field. Such coordination should be made within the private sector (e.g industry associations, chambers of commerce) and between the private sector and government. Such coordination is even more important on the national scale as this would allow for the consolidation of more comprehensive negotiating positions that cut across the different sectors of the economy. While positions and interests are defined among the ranks of the private sector, constant coordination should likewise be conducted with the government. It is of utmost importance that government, the private sector, and the academe are on the same page at all times.

Essential to this delicate coordinating effort is the private sector’s capacity not only to understand the language of government but to speak it as well. The idea is to make the government not just hear but actually listen.

In the US, the solid partnership between the government and the academe can be seen in the Minerva Research Initiative (MRI) which has been recently launched by the Department of Defense. Under the program, members of the academe (particularly in the applied and social sciences) are tapped for research relating to national security matters under a budget of US$ 50 million for five years. Also, the US places an emphasis on accountability in trade negotiations, as the Executive Department is required to closely coordinate with and report to US Congress before, during, and after negotiations are conducted.

Our country is now at the forefront of entering into more bilateral and regional trade agreements that are of crucial and strategic importance to the economy and the local business community. Among the most recent agreements are the Japan-Philippines Economic Partnership Agreement (JPEPA) and the ASEAN-India Free Trade Agreement (AIFTA) which are expected to go online soon. Companies therefore should now begin their homework and enlist experts, if need be, to better understand the implications of these agreements to their business and exploit the opportunities these pose.

(Raphael B. Madarang is a Manager for International Trade and Customs Services of Manabat Sanagustin & Co., CPAs, a member firm of KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. This article is for general information only and is not intended to be, nor is it a substitute for, informed professional advice. While due care was exercised to ensure the quality of the information contained in this article, readers should carefully evaluate its accuracy, completeness and relevance for their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances. For comments or inquiries, please email [email protected] or [email protected]).