General Agreement on Tariffs and Trade (GATT) January 1, 1995 153 members The World Trade Organization (WTO)

is the only global international organization dealing with the rules of trade between nations. GOAL: to help producers of goods and services, exporters, and importers conduct their business.

 To

help trade flow as freely as possible To achieve further liberation of trade through negotiation To set up an impartial means of settling disputes

Trade without discrimination Protection only through tariffs A stable basis for trade Consultations Quantitative restrictions Regional trading arrangements Waiver and possible emergency action

The WTO operates in three ways:

As a set of multilaterally- agreed rules As a forum for trade negotiations As an international court

Non-discrimination Stable/ and Assured Access to Markets Consultations and Complaints Forum for Multilateral Discussions

DOMESTIC 1. With the Philippines commitment to reduce tariffs, will the domestic market be flooded by cheap imports? 2. How are domestic industries affected by the tariff bindings committed in the Uruguay Round?

1. Continuing liberalization helps the Philippine economy become more competitive and resilient . 2. Major Developments in Trade(domestic market) and Related Economic Policy Philippine priorities in the WTO are as follows: (a) Market Access - the full and faithful implementation of commitments in areas such as industrial tariffs, agriculture, textiles and clothing, and services; (b) Rules and Disciplines - the proper use of WTO rules and disciplines including measures against unfair trade such as antidumping and countervailing duties, safeguard measures under fair trade conditions, customs valuation, subsidies, intellectual property rights; and (c) Institutional Topics - faithful and timely enforcement of the decisions and recommendations under the dispute settlement mechanism and improving and strengthening the multilateral trading system through the Trade Policy Review mechanism.

Republic Act No. 8181 (signed on March 28, 1996)- An Act Changing the Basis of Dutiable Value of Imported Articles Subject to an Ad Valorem Rate of Duty from Home Consumption Value (HVC) to Transaction Value(TV). Executive Order No. 313 (Signed on March 29, 1996)- Set the tariff rates on agricultural products previously covered by quantitative restrictions, except rice, to complement the lifting of quantitative restrictions under RA 8178.

Republic Act No. 8151 (Signed on August 7, 1999)- An Act Strengthening the Mechanism for the Imposition of Countervailing Duties on Imported Subsidized Products, Commodities or Articles of Commence in Order to Protect Domestic Industries from Unfair Trade Competition. Republic Act No. 8752 (signed on August 12, 1999). An Act Providing the rules for the Imposition of an Anti- Dumping Duty. Republic Act No. 8800 (Signed on July 19, 2000)- An Act Protecting Local Industries by Providing Safeguard Measures to be Undertaken in Response to Increased Imports and Providing penalties for violation thereof.

1. The system helps promote peace 2. Disputes are handled constructively 3. Rules make life easier for all 4. Freer trade cuts the costs of living 5. It provides more choice of products and qualities 6. Trade raises incomes 7. Trade stimulates economic growth 8. The basic principles make life more efficient 9. Governments are shielded from lobbying 10. The system encourages good government

AGRICULTURE
The WTO has not produced the vaunted

benefits. The domestic market became flooded with agricultural imports while the Filipino farmers produce were still unable to penetrate the markets of developed countries. Import Liberalization under the WTO aggravated the balance of trade (BOT) deficits in agriculture.

Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Exports

Imports

BOT 146 585 306 292 -42 -150 -789 -764 -670 -1,115 -794 -808 -1,334 -933

1, 701 1,555 1, 845 1,260 1, 866 1,560 1, 918 1,626 2, 072 2,114 2, 499 2,649 2, 307 3,096 2, 338 3,102 2, 225 2,895 1, 760 2,875 1, 983 2,777 1, 297 2,105 1, 976 3,310 Source: Source: Bureau of3,244 Agricultural Statistics 2, 311

- The decrease in agricultural productivity and upsurge of imports resulted in the devastation of farmers livelihood and the rural economy. -Through WTO, the Philippines transformed into a net food importing country. (after the years of globalizing the countrys agrarian economy)

INDUSTRY - a. Production in industry, especially in the manufacturing sector, which had been stagnant for more than 3 decades now, is continuously declining. b. The performance of mining and quarrying; construction; and electricity, gas and water has been unstable and decelerating

Industry Manufacturing Textile Manufacturers Footwear and wearing apparel Wood and cork products Paper and paper products

1995-1996 5.5 0.4 -9.7 -3.3 -2.5

2000-2001 2.2 -7.5 -.03 -6.4 -14.0 10.9 -7.3 7.0 10.0 -5.0 4.2

2003-2004 5.0 8.0 -3.7 -3.1 5.0 -32.3 11.8 5.3 4.3 8.9 3.9

Leather and leather products 13.0 Non-metallic mineral products Basic metal industries Mining and Quarrying Construction Electricity, Gas and Water 6.7 -3.2 -1.5 10.9 7.4

Source: National Statistical Coordination Board

c. Present government policies and programs that favor foreign investors give unnecessary competitive advantage to foreign-owned firms at the expense of small local producers.

SERVICES a. Several attempts were made to amend the Philippine Constitution specifically the provision limiting foreign participation in the economy and to open land to foreign ownership. b. In line with commitments to WTO, privatization has been a government policy.