Tuesday, 21 June 2011

How not to handle foreign affairs

Business Mirror

The Philippine government is far out of its league in dealing with both China and the United States.

The first move in the dispute with China (and others) over the waters of the South China Sea, the Philippines turned to the 60-year-old Mutual Defense Treaty with the US. The US response was predictable: Not our problem.

When the government pushed on the matter, the US government blew the dust off the treaty, read it, and decided that, well, maybe there was something to the Philippine claim of mutual defense. The specifics became so confused that one comment said the treaty could only be used if another country invaded the Philippines on the Pacific Ocean side, between PHL and the US.

Ultimately, the US reply to the Philippines invoking the treaty was “Well, maybe I guess. But get back to us when it happens and we will give our final answer.”

Actually the US response came a few days later. The US State Department issued a travel advisory for the Philippines. The travel advisory was complete nonsense and was only because of the treaty issue. The “warning” told US citizens to stay away from Sulu and parts of Mindanao, mentioning that “clashes have occurred between lawless groups and the Philippine Armed Forces throughout Mindanao, particularly in rural areas.” Also, “US citizens should exercise caution when traveling in the vicinity of demonstrations since they can turn confrontational and possibly escalate to violence.”

I wonder if the US issued a similar travel advisory for Vancouver, Canada, cautioning its citizens to stay away from drunk, drugged and sore loser Canadians after the championship ice- hockey games? What a disgrace.

Then the US ambassador to the Philippines lectures a group of Filipino judges and prosecutors, expressing “displeasure” over the country’s performance in the battle against human trafficking. His advice was for the Philippines “to make sure that the ports were well guarded and ensure that no one got aboard to end up somewhere else only to be abused.”

This is coming from a country that admits that some 12 million to 15 million people are illegally in the US, some 5 percent of the total population. And that the US government’s own statistics show approximately 15,000 women and children are sent to the US each year by the slave traders.

But none of this is important. The message to the Philippines was simply, watch your mouth and do nothing to insult or show any disrespect to your Uncle Sam.

It was like the schoolboy suddenly thinking the class bully is now your friend because he hasn’t stolen your lunch (one-sided trade agreements) or punched your face (interfering in national politics) for a while. Pathetic.

The Philippine response to the Chinese government is even more infuriating. The initial call by one politician to boycott Chinese goods was simply ridiculous. First, the Philippines has a trade surplus with China ($8 million), meaning we sell them more than they sell us. So who gets hurt more if the trade between the two countries is reduced?

China exported $1.5-trillion goods last year. The Philippines imported $7.4 billion, or less than 0.5 percent of China’s total exports. Yeah, not buying Chinese goods is certainly going to hurt them. They may be so upset they will just give the Philippines, not only the South China Sea, but maybe Hong Kong, too, where, by the way, 150,000 Filipinos are employed.

Filipino companies like San Miguel have substantial business interests in China that have taken decades to develop so that Filipino companies do not have as difficult a time in dealing with the various Chinese governments as do other nationals. Those investments, much more important to the Philippines than to China, could be drastically impaired by any sort of trade disruption between the two countries.

China invested a scant $100 million in the Philippines last year in comparison with China’s total overseas investments for 2010 of $59 billion. Maybe the country might want to figure out some clever and beneficial alternatives to doing business with China while protecting national sovereignty and interests rather than economic saber-rattling.

But no. Like someone who believes that life and important decisions have a video-game reset button, the Philippines sends the BRP Rajah Humabon to the area. Senate President Enrile had this to say: “That’s a symbolic act of the country to show that in our own way we will defend our rights. Let’s not go any farther because we have no capability to equalize the balance of forces.” Senator Enrile was being polite. It was the act of a child holding his plastic sword (made in China) above his head, threatening to vanquish the bad guys. Pathetic.

Speaker Belmonte is going to take a small group of House members to China to discuss the issues. Sensible.

E-mail comments to mangun@gmail.com. PSE stock-market information and technical analysis tools provided by CitisecOnline.com Inc.

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