Throwback

There are two major folders in Barack Obama’s traveling bag as he swings through his current Asian tour: the shift in US military disposition known as “pivot to Asia” and a free-trade proposal called the Trans Pacific Partnership (TPP). He is knocking at doors, much like a traveling salesman, peddling these two strategic initiatives.

If there has been a slightly detectable tinge of disharmony in Obama’s Asian tour thus far, it is because the two items he carries in his bag fail to enthuse Asian leaders. Those two items strike most Asian leaders as a throwback to the Cold War, the age of spheres of influence and trade blocs.

The new world, particularly in Asia, is much more nuanced, much more layered and multidimensional than old-style geopolitics might capture. There is a certain mustiness in the geopolitical packages Obama carries.

Days before Obama landed in Kuala Lumpur, the Malaysian prime minister took the effort to reiterate his country’s equidistance from both Beijing and Washington. The Malaysians are not interested in alliances with one against the other. It is easy to see why: China is Malaysia’s biggest trading partner while the US is her biggest source of investments.

Obama is criticized at home as a weakling, a leader who could not match Vladimir Putin’s decisiveness and audacity. Seeking to offset that impression of his presidency, Obama was ready with tough things to say on tour.

In Tokyo, Obama bluntly declared his government’s view that the small islands contested by China and Japan belonged to the latter. That will not dissuade Beijing from pressing its claim, but the sound bite pleased the Japanese no doubt. That is all they expected from this visit, nothing else. When the Americans brought up the matter of the TPP, the Japanese were distinctly uninterested because it meant lowering protection for their agriculture.

In Seoul, Obama made it a point to say North Korea was a threat to the region’s peace. Otherwise, very little business was discussed. When Obama and Korean President Park appeared before the press together, most of the discussion was about Ukraine.

Perhaps, it is only in Manila that Obama might  feel truly loved. The Philippines fully subscribes to this thing about the “pivot,” even offering the stationing (on a rotating basis) of American troops in the archipelago. This is because Manila needs a strong restatement of alliance (and perhaps promise of US military hardware) to help offset increasing Chinese pressure in the contested South China Sea shoals.

There has been very little discussion in Manila about the TPP. We are not even ready for the ASEAN common market that kicks in on Jan. 1, 2015.

Then, too, our own diplomatic worldview under the present administration returned to the Cold War paradigm much earlier, at about the time this sitting president decided to bring up the matter of “sovereignty” over the contested shoals, junking the “mutual use, mutual benefit” framework that was beginning to evolve. Having thrown ourselves back to a completely Westphalian view of national borders and national territory at the expense of pragmatic economic engagement, we now desperately need reaffirmation of our alliance with the US so that our capacity for war might somehow match the bluster of our foreign policy utterances.

Dumped

The Department of Agriculture (DA) has determined that Turkish flour is being dumped on our market. For this reason, the agency recommends imposing anti-dumping duties on the commodity and asks the Bureau of Customs to take firmer action against the rampant undervaluation of flour imported from Turkey.

By technical definition, dumping happens when a commodity is exported at a much lower value than what it commands in the market of origin. The DA found that undervaluation of Turkish flour has been as high as 35.21% for soft flour, 21.79% for hard flour and a staggering 39.26% for the type of flour used in making biscuits.

The undervaluation does not yet take into account the rampant smuggling of this agricultural commodity. By evading duties and taxes, given the legendary vulnerability of our Bureau of Customs, those engaged in importing Turkish four may undercut local producers and still produce super-profits.

At first glance, dumping might seem good for domestic consumers as it brings down the price of a vital food input. That is illusory, however, since this nefarious trading practice threatens domestic flour production with extinction. Should the undervaluation of flour imports, aggravated by rampant smuggling, manage to eradicate domestic production capacity, we will be completely vulnerable to global market fluctuations in commodity prices as well as to unscrupulous traders.

This is the reason the Philippine Association of Flour Millers (PAFMIL) has been pressing the DA to act on the matter of Turkish flour dumping. The industry association clams Turkish flour is being imported into our market at prices lower than its raw material, wheat.

This predatory pricing is made possible by exploiting prevailing policy in Turkey where import duties of 130% are waived if wheat processed into flour are destined for export. Records show that in  the past couple of years the volume of flour imported from Turkey rose 71%. Meanwhile, domestic flour manufacturing output decreased by 2.59%between 2012-2013.

At the rate Turkish flour imports flood the domestic market, our local manufacturing capacity cannot be sustainable beyond 2017. This implies the loss of thousands of local jobs, adding to the rising unemployment trend.

In addition, local manufacturers are asking the Food and Drug Administration to more rigorously test the quality of Turkish flour. The lower price at which it is imported is also due to the use of inferior raw materials possibly harmful to our consumers.