Economic white flag

The administration may have surrendered more than just an open market to the United States, which has also locked in trade, barring competition from a third country that will have a detrimental effect on the Americans.

A draft of the reciprocal tariff agreement between the US and the Philippines states in Section 5. Economic and National Security: “When the United States imposes a customs duty, quota, prohibition, fee, charge or other import restriction on a good or service of a third country under relevant domestic law, the Philippines shall regulate the importation of that good or service into its territory through measures having equivalent restrictive effect as those of the United States.”

In gist, the Philippines is now required to adopt the Trump policy on trade with other nations.

If the United States imposes restrictions on goods or services from another country, such as taxes or import limits, the Philippines has to adopt them.

The document also bars the Philippines from imposing new barriers that provide less favorable treatment to US service suppliers.

It will thus open the market to US service providers, such as banking and telecommunications companies.

No new rules will be established that would treat US providers worse than local or other foreign rivals, according to the document.

The country will also help the US reduce its trade deficit: “The Philippines shall adopt and implement measures to address practices of companies owned or controlled by third countries operating in the Philippines’ jurisdiction that result in (1) the export of below-market price goods to the United States; (2) increased exports of such goods to the United States; (3) a reduction in US exports to the Philippines; or (4) a reduction in US exports to third-country markets.

Thus, domestic measures will be required to stop other nations’ companies from unfairly affecting US trade.

On products involving national security, the Philippines is required to collaborate with the US to ensure that sensitive technologies and goods are tightly controlled and not misused.

The development of an indigenous marine industry will also be surrendered to the Americans.

“The Philippines shall adopt similar measures to those of the United States to encourage shipbuilding and shipping in the United States and certain other countries,” according to the document.

Shipbuilding is a growing industry due to the capabilities of Filipino craftsmen, many of whom were employed when the Subic Naval Base, the largest of its kind outside the United States, was still in operation.

The US government also chooses which nations the country can have bilateral free trade with.

“If the Philippines signs a new trade deal (like a free trade agreement or special economic agreement) with a country that the US considers problematic, the US can cancel this agreement,” the document says.

Similarly, the country needs to obtain permission to purchase nuclear reactors and fuel rods from outside the United States.

The clause regarding the US terminating the agreement if the Philippines signs a trade deal with a “country of concern,” likely China, could restrict beneficial trade agreements with other nations, limiting opportunities from significant sources of investment and trade.

Subservience, indeed, has a steep price.