Bullied black and blue

The government’s acceding to the patently lopsided tariff deal with the United States, in which the economy is opening up to American products unseen since the Bell Trade Act of 1946, was a pure surrender.

The supposed haggling with the Americans over the reciprocal tariff, which was initially pegged at 17 percent, then increased to 20 percent, before settling at 19 percent, did not occur. US President Donald Trump even mocked President Ferdinand Marcos Jr., calling him a tough negotiator.

A leaked Department of Trade and Industry document, obtained by DAILY TRIBUNE, showed the Philippine panel negotiated from a weak position, willingly giving in to practically all the US demands.

The message given to the technical working group (TWG) preparing the terms for the negotiations was titled “President Marcos’ instructions for future negotiations on PH-US Agreement on Reciprocal Trade Framework at the 16 July Meeting.”

The directive said “PH (Philippines) needs the US (United States), (it) cannot live without the US; PH will sustain US’ strategic interests and go all out to support the Trump Administration’s tariff policy.”

According to the document, the Philippines will secure full and preferential access for the 6As, which are agriculture, automotive, AI-driven technologies, advanced manufacturing, alternative energy sectors, and assured access to PH critical minerals.”

“PH needs to ensure US farmers, ranchers, factory workers, and business access to almost $500 billion in commercial benefits in the next four years,” the DTI paper conceded.

“We are open to negotiating and making these concessions permanent,” it added. It then listed a range of products that would involve possible trade-offs.

The Marcos negotiators raised the reduction or elimination of tariffs on soybeans, a major US export to the country, while lowering the tariff on crude oil from 7 to 3 percent.

The Philippines promised to eliminate the MFN (most favored nation) tariff rate on wheat, wheat mesin, wheat starch, and wheat gluten, and reduce the rate of 7 percent for wheat seed to 3 percent.

The Philippines will eliminate the MFN tariff rate of 15 percent for lead-acid batteries and commit to increasing the importation of soybeans, wheat and chicken leg quarters.

Included in the concession package was the increased importation from the US of dairy products, raw materials for the manufacture of firearms, and hardwood for furniture.

The Marcos panel also vowed that the Philippines will create a high-level task force to promote and increase complementary trade.

Another ridiculous pledge contained in the document was that the Philippines would exempt the United States from pre-border technical verification under AO 23.

The directive required all imported commodities entering the Philippines to be inspected through digital and integrated pre-border technical verification, as well as cross-border electronic invoicing.

The edict was intended to strengthen national security, safeguard consumer rights, and protect people against substandard and hazardous imported goods.

More capitulation was noted in the document, as it indicated an increase in the importation of liquefied natural gas (LNG) and ethanol. At the same time, the application and award of exploration rights to US companies in the West Philippine Sea will be facilitated.

Investment opportunities for US companies in oil and gas exploration, as well as geothermal development, will also be facilitated.

The Filipino negotiators effectively ceded control of the economy to the US in exchange for a negligible one percentage point reduction in the reciprocal tariff.

Allowing itself to be bullied, the administration should prepare for increased demands for bigger concessions from the US government.