By means of Beatriz Marie D. Cruz, Reporter
A POTENTIAL Donald J. Trump The presidency poses risks to global growth as rising protectionism could weaken global trade, Philippine Finance Secretary Ralph G. Recto said on Wednesday.
“We are concerned that there will be a setback for multilateralism, especially in the area of trade,” he told a newsletter.Fing of the Governing Council of the Intergovernmental Group of Twenty-Four (G-24) in Washington, DC late Tuesday at Manila time, are offIce said in a statement.
“We know that the driving force behind global growth is more trade. So that is a concern.”
Republican candidate Trump, who is seeking a second presidency, has imposed stricter trade restrictions, including imposing tariffs of 60% or higher.Ffs on all Chinese goods and a universal tariff of 10%Ff, Reuters reported.
In its latest World Economic Outlook, the International Monetary Fund (IMF) expects global growth to remain “stable but still disappointing” at 3.2% this year and next.
“In the Philippines, we are counting on our relationship with the United States to perhaps do more outshoring to the Philippines, and hopefully that will happen with other members of the G-24 as well,” Mr. Recto said.
The United States was the top destination for Philippine products in August, with a total export value of $1.22 billion (P70.7 billion).
The Philippine government is also relying on its defense and security partnerships with the US to reduce the impact of Mr Trump’s protectionist policies. “We have a mutual defense treaty. We hope to be able to leverage that relationship so that we don’t have aFhas had many consequences,” Mr. Recto told the brieFing.
Under the 73-year-old defense pact, Washington and Manila are required to defend each other in the event of an armed attack on their armed forces, public ships or aircraft.
Mr. Recto said many American companies are interested in investing in the Philippines, which bodes well for the decades-long relationship between the two countries.
The Philippines and the US signed several military and trade deals with Japan in April, including the establishment of a Luzon Economic Corridor.
“Manila hopes that under Trump, Washington will continue its rock-solid commitments to the strong bilateral relationship,” Chester B. Cabalza, founder and president of the Manila-based International Development and Security Cooperation, said in a Facebook Messenger chat.
Continued US support in the form of defense and investment would help strengthen the Philippines’ ability to defend itself, he added.
Hansley A. Juliano, a political science professor at Ateneo de Manila University, said a potential Trump presidency is a “return to the 2016 wind-down of U.S. involvement in Asia.”
“This is unfortunate given the many developments toward building a broader alliance to protect Philippine interests in the West Philippine Sea and Asia Pacific.Fic, region,” he said in a Viber message, referring to areas in southern China within the country’s exclusive economic zone.
If Mr. Trump wins, the Philippines should strengthen its relations with other partners such as South Korea, Japan and Australia and reassess Southeast Asian countries’ stance on tensions in the South China Sea, Mr. Juliano said.
Iyabo Masha, director of the G-24 Secretariat, noted that the World Trade Organization (WTO) should bring trade negotiations to an equal level amid rising protectionism in many countries.
“What we are calling for is that the WTO becomes the center of trade negotiations, trade negotiations, and that the World Bank and the IMF emerge as a much more multilaterally engaged organization that will be able to at leastFUnderstand the kind of policies that countries are pursuing one way or another,” she told the brieFing.
The group also called on the IMF and World Bank to increase support and speed up reforms, especially for developing countries, amid geopolitical tensions that could fuel rising commodity prices and keep interest rates high.
“One thing is clear: any slowdown in the global economy as a result of this new economic reality will undoubtedly hit developing countries the hardest,” said Mr Recto, who is also Chairman of the G-24 Governing Council.
“So we continue to call for a more flexible and strong-willed IMF and World Bank,” he said. “We need stronger development cooperation, scale-up support and innovative solutions as we begin to experience headwinds to promote peace, stability and prosperity for all.”
To better support member states, the board called on the IMF to create a new mechanism to support countries with sound fundamentals during liquidity crises, Mr Recto said.
The World Bank should set ‘more ambitious’ targets for its concessional and non-concessional financing. The group also sought changes to the sovereign debt resolution framework to provide debt relief to vulnerable economies.
Mr Recto also called on the Washington-based multilateral lender to reduce its borrowing costs to better support developing economies.