Pinoys employed in industries competing with imports ‘limited’

GENEVA, Philippines — The number of Filipinos employed in industries that are competing directly with imports is “limited,” according to the World Trade Organization (WTO).

In its flagship World Trade Report, the WTO said that the average population share affected by import competition in 14 select most populous economies, including the Philippines, was at 1.85 percent, which has “hardly changed since 1995.”

The report showed that only 3.6 percent of the Philippines’ workforce were employed in domestic industries that directly compete with imports.

“We are not saying in this report that nobody is affected by import competition and we also not saying that it is not leading to disruptions in labor markets,” said Ralph Ossa, WTO chief economist, during a press briefing here Monday night (Philippine time).

“But if we take the Organization for Economic Cooperation and Development (OECD) data and do our calculations then there is a very small share of workers in the economy that are exposed to import competition,” Ossa added.

Ossa explained that countries could implement policies that would help their workers in import-competing industries to shift to other industries where they have comparative advantages.

That way countries are able to sustain their economic growth while reducing within country inequality and improving between countries inclusiveness, he said.

“Rather than trying to protect workers through import tariffs or protectionist measures, if you try to help them move toward news opportunities then that is going to be good for within country inequality and also good for leveraging comparative advantages,” he added.

The WTO made the estimates to see the extent of disruption being caused by trade on domestic labor markets, particularly in countries’ import-competing industries.

The multilateral body used data from the OECD in selected economies with large population and available data.

The WTO defined import-competing industries as those with gross imports exceeding 15 percent of output, representing the top 25 percent of industries in terms of import penetration in the database.

The WTO said some economies have implemented trade policies that are “centered” around the effects of trade on workers “on the basis that individuals are not just consumers, but also workers.”

However, such policies, the WTO pointed out, “ignored the fact that a substantial share of individuals do not work, for instance because they have retired or are too young.”

“The positive consumption effects of trade, even for most workers, are likely to directly impact a larger number of people than the labour market effects,” it said.