“History is a great teacher,” said the late American civil rights leader, Dr. Martin Luther King Jr., in a speech before a labor federation convention in 1961. Earlier in 1948, speaking before the United Kingdom’s House of Commons, British Prime Minister Winston Churchill paraphrased Spanish-born philosopher George Santayana when he declared that “those who fail to learn from history are condemned to repeat it.”
Recent remarks of a Filipino actress equating history with gossip has taken social media by storm and offended many historians in the academe. Rightly so, because history as we know it is based on verified facts that have stood the test of time.
Take the case of Great Britain’s industrial sector in the late 19th century, when it dominated world trade. Its domestic industries had the lowest production costs and the most advanced manufacturing capabilities. During that era, the British government decided against implementing import tariffs on lesser economic powers such as Germany and the United States, while the latter were imposing anti-dumping measures to protect their own industries.
Such measures enabled the German and US economies to foster an environment of higher and continued levels of capital investments to improve production technologies. As a result, costs were lowered while output and efficiencies increased along with the overall global competitiveness of those two countries’ locally manufactured goods for both domestic and international markets.
The rest, as they say, is history – as the UK’s total disregard for pervasive dumping into its markets has been well-documented. This was one of the contributory factors to the erosion of the British industrial base in coal, textiles, and iron. Its inability to generate capital for investments on then upcoming industries like industrial chemicals, electrical products, pharmaceuticals, and specialty steel made Britain miss out on the Second Industrial Revolution and signaled the end of the British Empire.
In the 1990s, a World Bank economist named Dr. Joseph Michael Finger advocated that global free trade should be allowed to flourish without any government interference. “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,” he espoused.
But the lessons from history can be used to present a compelling counter-argument as to why anti-dumping laws are essential to domestic industries. For example, the escalating importations of Vietnamese cement and Thai sugar at dumped prices into the Philippines necessitate the imposition of higher tariff measures. Or do we just allow our own local industries to erode or die without putting up a fight?
In the wake of continuing threats to the existence of one of the country’s vital industries, several members of the Cement Manufacturers Association of the Philippines (CEMAP) have filed for trade remedies against certain exporters from Vietnam. They have also petitioned the government for the extension of safeguard measures to promote a level playing field. According to CEMAP, the country has a domestic capacity of 47 million tons that significantly exceeds local demand and provides comfort on the stability of cement supply.
Besides preserving our dollar reserves, rescuing the cement industry will ultimately benefit the economy through the creation of jobs, increased tax revenues, and independence from imports. If the government is bent on boosting the sugar industry, why can’t it do the same for the cement industry?
J. Albert Gamboa is a Life Member of the Financial Executives Institute of the Philippines (FINEX). He is the Chairman of the FINEX Media Affairs Committee and the Editor-in-Chief of FINEX Digest. The opinion expressed herein does not necessarily reflect the views of these institutions and the Manila Bulletin. #FinexPhils www.finex.org.ph