Thursday, March 12, 2009

International Trade Perspective from the Philippines

Developing countries in the region should avoid hiking barriers against imports and should instead deepen economic links with other poor nations to cope with the global economic downturn, a United Nations agency said.

The UN Economic and Social Commission for Asia and the Pacific (UNESCAP), in a policy brief, proposed such measures to "ensure that the region can minimize the negative impact of the current crisis."

A Philippine economist agreed with the recommendation to trade more with other developing countries but said demand might not be comparable with that of richer markets.

But a pro-industry group countered this, saying the Philippines should hike tariffs at least to the internationally agreed ceilings to protect domestic producers.

The UNESCAP report noted that "Developing countries still rely greatly on exports to the United States, the European Union and Japan to generate GDP (gross domestic product)."

"Using intraregional trade as a cushion against the contraction of exports to developed countries will depend on strengthening domestic demand and restructuring it to support intraregional trade," the report said.

Deepening "South-South" economic cooperation, or links between developing countries, may boost trade and also lead to the transfer of technology and technical knowledge, the UNESCAP report said.

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