History is full of evidence that reckless free trade, without any interference of trade remedy measures, including anti-dumping, is eventually detrimental to a sovereign.
This argument is contrary to the position taken by Dr. Joseph Michael Finger, professor and former lead economist and chief of the Trade Policy Research Group of the World Bank, when he said, “The most appealing option is to get rid of anti-dumping laws and to put nothing in their place. Then all of the evils of such policy — its power politics, its bad economics, and its corrupted law — would be eliminated.”
Indeed, civil rights activist Martin Luther King Jr. and famous statesman Winston Churchill would have disagreed with Finger and retorted, “History is a great teacher,” and “Those who fail to learn from history are doomed to repeat it.” Although the statements of King and Churchill are not in the context of Finger’s statements, their words could be a compelling argument proving that anti-dumping laws are essential to the survival of domestic industries — even an empire.
In 1870, Britain was the center of gravity in the manufacturing space, accounting for more than the global manufacturing output than any country. The empire had the most forward manufacturing capabilities and lowest production cost and dominated world commerce with its superior shipping and banking industries.
But the lack of foresight, and we might assume arrogance, and the government confidently refused to impose tariffs on dumped imports from lesser economic power, particularly Germany and the United States. In contrast, the two countries implemented tariffs against dumped imports to support their domestic industries and allowed them to foster an environment of higher and continued levels of capital investments.
The result was the US and Germany improved their production technologies that lowered costs, increased output and efficiencies, and the overall global competitiveness of locally manufactured goods for both domestic and international markets.
Britain started to wither into oblivion on the other side of the Atlantic and lost its competitive edge. The dumping of imports into its markets has been cited for the decline of its industrial might. The rest, as they say, is history.
In the Philippines, in the wake of the uncurtailed imports of essential and prime commodities, such as cement being brought in from Vietmam at dumped prices, do we want to see a similar erosion, or worse, the demise of local industries? At the current state, the ability of the local industry to contribute at full throttle to the economy, generate thousands of jobs for Filipinos, and uphold the national interest for its survival, is already being undermined.
As actions to address threats to the continued existence of the cement industry in the country, Philippine domestic cement manufacturing companies have filed for trade remedies, an anti-dumping case against certain exporting Vietnam manufacturers and traders, and a petition for the extension of safeguard measures.
Such remedies promote a level playing field, benefiting our country through job creation, taxes, investments, and independence from imports. This will also preserve our country’s dollar reserves.
According to the Cement Manufacturers Association of the Philippines, the country has approximately 47 million tons of domestic capacity. This capacity significantly exceeds domestic demand and provides comfort in the stability of the local supply of cement.
Let history indeed be our great teacher, so that our country can learn from the mistakes of others.