Here's the news, the Asean-China FTA will take effect when the clock strikes midnight of January 1, 2010 UTC+0800. That means, all trade goods under the agreement will have no more tariffs (and some goods will have less import taxes instead).
(Originally posted at: Snow World)
What does it mean? It will give traders from China an easy way to export their products on Asean countries - at the same price level or even less than what we offer locally! Example rice, we all know (especially if you live in the Philippines and VietNam) that the rice from China are *ehemm* superior than what we offer. Additionally, their labor is cheaper too.
Starting January 1, 2010, Chinese farmers with their superior rice and cheap labor will be able to export their product in any Asean country at the same price or even less than what our local farmers can offer. Previously, these imported rice have to be sold higher because of the tariffs or import taxes.
It is only one of the many example and is always the number one worry of many agricultural-based countries like the Philippines, VietNam, Indonesia, and India (<-- India is worries that the Asean-India FTA will mean the superior Asean products will kill their local industry). Maybe by now you are worried too. We should! But let us not forget that these free-trade zone agreements are two-way. Meaning, we can export our respective superior products over to China and compete with their local products (and don't we always say that their products fails miserably in quality control?)
This is competition. In a world that is going global (in all sense of the word), the only way left for us to survive and possibly push our economy up is to compete globally.
Going back to our example, if for example the Philippine Government and Farmers wants to stick with rice farming and not explore other opportunities then why not adapt China's rice and methods? My cousin who graduated from UPLB and his batchmates were sent to China years ago to do just that!
Sadly, after they returned with the knowledge and technology, local NGOs and farmers refused to accept this new rice and methods. Now the Asean-China FTA is here to stay, we are now worried of what it can do to our local farmers.
Tell me if I am missing something here, but as far as what I heard, local groups and farmers just do not want to accept this new thing. They are afraid of change.
Secondly, I do not understand why our government is still holding on the rice industry. I think it is time that we refocus our energy and time to an industry that will give us a better return in the long run. For example the BPO (aka call-center) industry.
The BPO industry is beyond "free-trade zones", there is nothing to import and export in this industry. Our government should spend less on industries (and people) who refuses any help and upgrades and redirect it to those that will benefit from it.
Or how about the gaming industry? Today's generation of Filipinos are too much into gaming, I'm sure many of those gamers are dreaming of creating their very own games!
How about our graduating Nurses? Instead of them going abroad why don't we build a project that will keep them right here at home? We also have the animation industry, maybe I am not exaggerating when I say that Filipinos were involved in many of the popular animations in the world.
And of course electronics, Filipinos are known to be good manufacturers of electronic products. If we can improve this industry then one day we will be able to compete head-on with China.
Give China the rice industry to rule. Let us concentrate on industries where we are not yet far behind or still far ahead from China. Let us improve those industries and dominate their own market right at their home.
Now if anyone will say "but China is huge, sooner or later they will dominate us" then we might as well surrender our sovereignty and join the People's Republic of China (that's what they want anyway).
The Asean-China Free-Trade zone is here to stay. January 1, 2010 will be a new world for all of us Aseans. We may not notice its effects but it will be there around us.
It is up to you my fellow Asean to find that industry where China is still weak, improve those industries before China does, and we will have the Asean-China FTA working for us more than it does for China.
Happy New Year Asean Citizens!! Let's face 2010 together!
(Originally posted at: Snow World)
Good reads:
In Southeast Asia, Unease Over Free Trade Zone
Manila proceeds with ASEAN tariff deal
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