[Image: P199/Wikimedia Commons (CC BY-SA 4.0)]
The Philippines Department of Trade and Industry - Strategic Trade Management Office (DTI-STMO) will receive assistance worth $30 million from the US Defense Threat Reduction Agency’s (DTRA) Cooperative Threat Reduction (CTR) program. These efforts will support the Philippines in sustaining a unified e-licensing platform for trading strategic goods.
According to the World Trade Organization (WTO), strategic goods are goods that, “for security reasons or due to international agreements, are considered to be of such military importance that their export is either prohibited altogether or subject to specific conditions.” These goods often have dual uses (both civilian and military). For example, the Philippines’ annex of strategic goods includes “glove boxes suitable for use with radioactive materials.”
In 2015, the Philippines passed Republic Act No. 10697 to comply with United Nations Security Council Resolution 1540 (2004). The Act requires companies and service providers that move strategic goods to register with the DTI-STMO. The assistance from the US DTRA includes hardware, software, and training to both create and implement the e-licensing platform. The DTI-STMO, in addition to receiving the funding, will administer the platform.
Strengthening partner institutions is a core part of US strategic engagement with the Philippines. The US Agency for International Development (USAID) prioritizes, “public sector performance, the ability of civil society to better demand for such performance, and for transparency and accountability,” in its Philippines Country Development Strategy for 2019-2024. As a close ally, the Philippines’ balance of trade with the United States has only grown since the pandemic, to an all-time high of a $6.9 billion goods surplus in 2023. In 2020, the Philippines’ overall (both goods and services) balance of trade was at $5.1 billion.
Although the spread of nuclear material is a primary strategic goods concern due to its application in Weapons of Mass Destruction (WMD’s), this US-Philippine partnership is focused on other types of strategic goods. Namely, the US side of this cooperation prioritizes the DTRA’s “Biological Threat Reduction” and “Chemical Security and Elimination” programs. The former program on biological threat reduction centers on the elimination and tracking of Especially Dangerous Pathogens (EDPs), while the latter program is aimed at eliminating existing chemical weapons while securing toxic chemicals that may be used for such weapons.
In 2021, the Philippines was cited by the Institute for Science and International Security’s Peddling Peril Index (PPI) as the most improved country from the previous year in regulating strategic goods trade. Its strongest category was in legislation, followed by adequacy in enforcement. Philippine Trade Undersecretary Ceferino Rodolfo summarized how efforts to reign in illicit trade would have broad benefits: “The Philippines’ strong improvement in the PPI ranking is likely to boost the country’s image as a secure investment location for the manufacture and export of strategic goods.” Essentially, global security concerns fuel international demand that secure, reliable countries can use to enhance their trade portfolios.
Although stories like the recent Enhanced Defense Cooperation Agreement (EDCA) expansion to allow US forces to utilize four additional Philippine bases drew headlines here at home, strategic-level cooperation between the United States and the Philippines also takes more specialized avenues such as with this important initiative.
Angelo Paule is a Spring 2023 Young Professional at the East-West Center in Washington. He received his Bachelor of Arts degree in Political Science at the University of Guam. He will begin Georgetown University’s Master of Science in Foreign Service program in Fall 2023.