The US elections: What’s in it for RP?

MANILA, Philippines - The conventional wisdom is that the Philippines has been better off with the Democratic Party ruling in Washington and at a disadvantage with the Republicans at the helm of the White House. Two stark examples stand out: it was the Republican William McKinley who signed the proclamation for the "benevolent assimilation" of the Philippines in 1898, while Franklin D. Roosevelt, a Democrat, signed the 1934 law that gave the islands its independence in 1946. Another long-held belief is that general US policy toward its former prize colony will be the same whoever is in power, be it in terms of security or the economy, so it would make no difference who among Democrat Barack Obama or Republican John McCain wins the November 4 polls. The records of both candidates and their political parties, however, could underline what their presidencies would look in terms of Philippine interests. If wider market access to the US is the objective, then the Philippines can count on the Republicans, seen as more open to a free trade deal than the Democrats, who tend to be protectionists. If immigration is the issue — the US being home to a vibrant Filipino immigrant community — then a Democratic victory would be advantageous, although Mr. McCain favors a "path to citizenship" and amnesty for illegal aliens. When it comes to military aid, both camps come out even. In June during the US trip of President Gloria Macapagal-Arroyo, Mr. Obama issued a statement in support of the regular "Balikatan" military exercises started by the Republican establishment following the closure of US bases in the country in 1991. In a meeting with Mrs. Arroyo, meanwhile, Mr. McCain pledged to work for stronger RP-US ties. Despite negative public opinion regarding the Republican incumbent, George W. Bush, US-Philippines relations have in fact reached a zenith of sorts under his administration, even despite Washington’s disappointment over Mrs. Arroyo’s decision to pull out Filipino troops in Iraq in exchange for the freedom of truck driver Angelo de la Cruz, hostaged in 2004. Under Mr. Bush, the US gave the Philippines the status of a "major non-NATO ally," strengthening military ties and giving the country wider access to US military aid. But in 2006, Mr. Bush removed duty-free access to top Filipino exports like wiring harnesses under the US Generalized System of Preferences, a program for less competitive exporters, amid concerns over the US’ ballooning trade deficit. This was a major blow considering the US is the Philippines’ main trading partner. Experts and observers, however, agree that whatever the outcome of the US elections, the winner will have to focus on domestic policies first, particularly putting the American house in order, in the aftermath of the worst financial crisis in a generation. Boosting economic relationships with the rest of the world will be the least of the next president’s — Democrat or Republican — worries. "Regardless of an Obama or McCain victory, the US domestic economy will be a top priority for the next president," De La Salle University (DLSU) associate professor and political economist Dennis D. Trinidad said. This "America-first" philosophy could lead to reduced economic assistance to developing countries as the US government would have to utilize its resources to save its economy from further decline, he said. But for former Philippine Ambassador to Washington Ernesto M. Maceda, both Messrs. Obama and McCain will likely to continue supporting strong US-RP relations. A Democratic leadership, however, could lead to increased aid to developing states. Improving the US image, tattered by Bush administration blunders such as the Iraq war, would be a priority of an Obama administration. "A Democratic president could be more open to giving aid to developing countries. Mr. Obama promised to bring home troops from Iraq. This disengagement will allow US funds spent on Iraq to be allotted to foreign aid and assistance to countries like the Philippines," Mr. Maceda said. A Republican presidency, meanwhile, could translate to more military aid to the Philippines with military and foreign policy a core strength of Mr. McCain, a decorated Vietnam War veteran. "For 2009, there could be a freeze on aid not only for Philippines but others as well but if Mr. Obama implements change in economic policies, this could bring in optimism. The US economy could bounce back to normal by end 2009 [or] by 2010 ... I see stronger trade relations with the Philippines," Mr. Maceda said. Donald G. Dee, chairman emeritus of the Philippine Chamber of Commerce and Industry and an international trade envoy, said the world could see a reduced US involvement globally, at least for the first year. Bilateral ties with the Philippines, however, will remain strong, he said, adding that the country will still enjoy robust trade with its biggest economic partner. The US has been running trade gaps with the Philippines but the deficit narrowed to $1.7 billion last year from $2.1 billion in 2006, with the US buying less of Philippine-made products. The Philippines counts the US as its biggest trading partner, and the latter accounted for $9.4 billion worth of Filipino merchandise exports in 2007, a 3% decline. "Historically, Republicans are more focused on foreign relations while Democrats want a bigger government ... stronger domestic presence. However, I don’t see any substantial change [in the relationship of the Philippines with US]. US trade will remain important," Mr. Dee said. Developing countries, the Philippines included, could benefit more from a Democratic administration, claimed political and public relations consultant Peter Sing. Mr. Sing, an Obama supporter, said such policies could give more opportunities for Filipinos. In particular, Democrats could allow Filipinos illegally staying in the US to legalize their status, and give World War II veterans more benefits. "But these are all against a backdrop of the current financial crisis. We have to consider that US is suffering the most from the crisis; in fact it emanated from them. They’re tightening their budget. They have their own problems. They may rethink priorities and scale down health [programs] and foreign aid," he said. The US could also rethink its strategy of securing free trade agreements or FTAs. "Because of recessionary pressure, developed countries will be more protectionist. To ensure our access to their markets, we need to pursue FTAs, but we have to be clever in negotiating several policies," University of Asia and the Pacific economist Dr. George Manzano said. An FTA with the US will not be possible if Mr. Obama wins, said another former Philippine ambassador to Washington, Albert F. del Rosario. "We failed to seize an opportunity offered by the White House as early as 2003. The legislation to fast-track the approval of such agreements has since expired. As the Democrats are not known to be free-traders, should Mr. Obama be elected, it is also not likely that a new opportunity will present itself," he said. The Philippines, he stressed, should take advantage of significant opportunities presented by US companies wanting to outsource their requirements to call centers. Amid constraints faced by the US, the Philippines could do well to find opportunities and partnerships elsewhere. "While it’s wise to maintain and even strengthen ties with the US, we should also develop relationships with emerging markets like India and China," Mr. Sing said. The DLSU’s Mr. Trinidad also said the Philippines should begin diversifying away from the US. Since the US is the top consumer of Filipino exports, an economic slowdown there is bound to have a significant effect on the local export-led economy. "The US, however, remains our largest market. A sudden decline in terms of demand or consumption in the US will also affect our export industry and other countries with huge export volume to the US. But I am not saying that we discontinue or reduce our exports to the US. We have to find more markets for our exports," he said. — Bernardette s. Sto. Domingo, BusinessWorld