Philippines Analytical Brief: Trump Focuses on U.S.-Philippine Economic and Security Ties in Meeting with Duterte

Trump Focuses on U.S.-Philippine Economic and Security Ties in Meeting with Duterte 
From November 12-14, U.S. President Donald Trump traveled to the Philippines as the last leg of a 12-day trip to five countries in Asia, which included state visits to Japan, South Korea, China, and Vietnam (both Hanoi and, before that, the Asia Pacific Economic Cooperation Leaders’ Meeting in Danang).  The purpose of his stopover in Manila was to attend the 5th U.S.-ASEAN Summit on November 13 and hold bilateral meetings with leaders from several ASEAN and East Asia Summit member companies.  Trump was slated to attend the East Asia Summit on November 14, but he ended up leaving the Philippines early after the plenary session was delayed.  This was despite earlier criticism of the message that his absence would send to the 17 other countries in attendance with respect to the United States’ commitment to the region.  Ultimately, Secretary of State Rex Tillerson attended the summit on behalf of Trump.  Though the marathon trip concluded without a major policy announcement from Trump, the U.S. President said that it had been “a tremendously successful trip” and that he had “made a lot of friends at the highest level.”

The Philippine leg of his trip gave Trump one last opportunity to focus on two of the primary messages of his Asia tour – the need to strengthen international resolve for the denuclearization of North Korea, and addressing the United States’ trade imbalances with its Asian trade partners.  Over the course of the trip, the security and economic messages were conflated, exhibiting the transactional nature that has come to characterize the Trump administration’s approach to foreign policy.  The call to correct trade imbalances, in the pursuit of “fair and reciprocal” trade, was intertwined with the regions’ security needs, which the administration presented as potential business opportunities for U.S. companies and one way to reduce U.S. trade deficits with countries in the region.

The joint statement released by the White House and Malacañang Palace following the meeting between President Trump and President Duterte emphasizes how the United States and the Philippines can expand cooperation and strengthen the bilateral alliance in the security and economic spheres.

Security cooperation:

• Military cooperation: Both leaders reaffirmed their commitment to the Mutual Defense Treaty of 1951, “as reinforced by the Enhanced Defense Cooperation Agreement” (EDCA).  Trump and Duterte also discussed how the United States could support efforts to modernize the Armed Forces of the Philippines (AFP), improve the Philippines’ maritime security capabilities, and provide humanitarian and disaster response assistance.  The two sides also reaffirmed their commitment to continue cooperating on cybersecurity issues.
• Counter-terrorism: The United States and the Philippines pledged to enhance counter-terrorism cooperation.  Conducting joint exercises, increasing the sharing of information, and attempting to address the root causes of extremism and conflict were cited as ways to enhance cooperation.  Trump and Duterte also discussed how the United States could assist with the reconstruction of Marawi, the city in northern Mindanao’s Lanao del Sur province that saw five months of heavy fighting between the AFP and ISIS-affiliated insurgents earlier this year.

Economic cooperation:

• Strengthening dialogues for innovation and sharing of best practices: To deepen the U.S.-Philippine economic relationship, Trump and Duterte discussed enhancing private sector cooperation by strengthening dialogues focusing on innovation and the sharing of best practices.  In particular, the two highlighted the sharing of best practices for the use of new technologies and how this could optimize the Philippines’ position as a destination for U.S. investment in the Asia-Pacific region.
• Continuing TIFA talks and improving market access: Both sides recognized the contribution that regular discussions under the United States-Philippines Trade and Investment Framework Agreement (TIFA) have played in strengthening bilateral trade ties, noting that the discussions were helping to make progress on market access issues for agricultural products, intellectual property, customs, and labor.  Trump and Duterte agreed to further discuss the Philippines’ interest in a bilateral free trade agreement at future TIFA discussions. 

In addition to discussing ways in which to strengthen security cooperation and economic ties, Trump and Duterte also reaffirmed the centrality of the ASEAN framework to promoting regional peace, stability and socio-economic development – a point Trump reiterated during his remarks at the 5th U.S.-ASEAN Summit in Manila on November 13.  They also jointly condemned North Korea’s nuclear and missile programs and urged other countries to show their opposition to these programs by downgrading diplomatic relations and economic engagement with Pyongyang.  The full Joint Statement between the Republic of the Philippines and the United States of America can be found here.

President Trump’s trip to the Philippines also provided an opportunity for a more definitive reset of U.S.-Philippine relations.  Relations between the two long-time treaty allies had been recovering over the course of 2017 after hitting a nadir in the final months of the administration of former President Barack Obama.  Former U.S. Ambassador to the Philippines Philip Goldberg's criticism of a controversial statement that Duterte made during the 2016 presidential campaign, followed by criticism from Obama over his violent anti-drug campaign, triggered sharp rebukes from Duterte, who while in power has sought to deepen diplomatic, economic, and security ties with China and Russia as part of an “independent foreign policy” that places less emphasis on the United States.  However, the chummy nature of Trump’s interactions with Duterte appear to have re-elevated U.S.-Philippines relations, even though it is unlikely to keep the Duterte administration from continuing to pursue stronger ties with China and Russia.  In fact, it is this more relaxed approach to the Philippines’ foreign and especially its domestic policies that has put the United States back in good stead with Malacañang.

The discussion between Trump and Duterte was narrowly framed, focusing on bilateral economic and security issues, particularly terrorism.  Framing the talks in this manner allowed for the avoidance of sensitive topics, such as human rights concerns related to Duterte’s violent anti-drug crackdown, that had led to caustic bilateral relations during the Obama administration.  In terms of bilateral trade, the United States accrued an estimated US$1.64 billion deficit in its trade in goods with the Philippines between January and August of this year, according to the Philippines Statistics Authority.  This figure is considerably less than the trade in goods deficits with other countries in the region (in 2016, the United States’ deficit with all of ASEAN was US$83.3 billion), but it nonetheless draws scrutiny from a trade imbalance-focused administration.  According to Duterte's spokesman, Harry Roque, Trump singled out tariffs that are imposed on U.S. automobiles, but not on Japanese ones, as an example of the types of barriers that could be removed to better open up the Philippine market to U.S. goods.  Japan benefits from tariff reductions under the 2006 Japan-Philippines Economic Partnership Agreement, so it is unsurprising that one of the proposals floated during the discussion was a potential FTA between the Philippines and the United States.  While the United States said it would consider such an agreement, it has also consistently pushed for such discussions to be done within the context of the ongoing TIFA talks, especially since for an FTA to be of any substance it would almost certainly require amending the economic provision in the Philippines' 1987 Constitution, a feat that has eluded past administrations in Malacañang.  Nevertheless, after over a year without a Philippine Ambassador in Washington, DC, the arrival of the new Ambassador-Designate, Mr. Jose Manuel "Babe" Romualdez, to his post in the U.S. capital in late November is likely to reinforce the strong commercial ties that already exist between the Philippines and the United States.  Having been hand-picked by Duterte for the role, one of Romualdez's key goals is reportedly to deepen private sector ties between the two countries.  

Security cooperation, especially in terms of counter-terrorism, was the second focal point of the talks between Trump and Duterte.  This was undoubtedly a consequence of domestic developments in the Philippines, such as earlier concerns about the status of EDCA and the five-month-long fight between the AFP and ISIS-affiliated militants in the city of Marawi, but also points to a more overarching theme of the Trump administration's "Indo-Pacific" strategy, which itself appears to emphasize bilateral economic engagement in tandem with closer military and security cooperation, which could be bilateral or multilateral.  Both Trump and Duterte stressed their commitment to expanding counter-terrorism cooperation, intelligence sharing, and conducting additional exercises.  They also stressed their commitment to maintaining EDCA, the 2014 agreement that would allow the rotation of U.S. troops into the Philippines.  Duterte had earlier threatened to kick U.S. counter-terrorism advisers out of the country and rip up EDCA when relations were more strained.  Trump also reiterated the United States' pledge to donate nearly US$15 million to assist with the rehabilitation of the city of Marawi and to address the humanitarian needs of the over 300,000 people who were displaced by the fighting in the city.  Duterte has chafed at the U.S.-Philippine defense relationship in the past, often threatening to do away with joint military exercises and accusing the United States of unloading its outdated weapons and material on the AFP.  One indicator that U.S.-Philippine relations have truly reset and that Trump's visit to Manila was a success, at least on the security front, is if the Philippines restarts some of the joint military exercises it ceased this past year or participates in new exercises with more of a counter-terrorism focus.