Bell Trade Act

The Bell Trade Act of 1946, also known as the Philippine Trade Act was an act passed by the United States Congress specifying the economic conditions governing the independence of the Philippines from the United States.

The Bell Trade Act had controversial provisions that tied the Philippine economy to the United States economy:

• The Philippine currency, the peso, was to be pegged to the US dollar.
• The Bell Trade Act prohibited the Philippines from manufacturing or selling any products that might "come into substantial competition" with U.S.-made goods
• The Bell Trade Act required that the Philippine constitution be revised to grant U.S. citizens and corporations equal access to Philippine minerals, forests and other natural resources.
• This act allowed the U.S. to import whatever products/goods it wanted with no import duties.

One U.S. State Department official described the law as "clearly inconsistent with the basic foreign economic policy of this country" and a betrayal of "our promise to grant the Philippines genuine independence."

Protests throughout the Philippines denounced the Bell Trade Act. Even the reliably pro-American Philippine President Sergio Osmena called it a "curtailment of Philippine sovereignty, virtual nullification of Philippine independence."

The United States Congress was threatening to withhold post World War 2 rebuilding funds unless the Bell Act was ratified. The Philippine Congress obliged on July 2, 1946.

The Bell Act was approved by the Philippine legislature on July 2, two days before independence. The parity clause, however, required an amendment relating to the 1935 constitution's thirteenth article, which reserved the exploitation of natural resources for Filipinos. This amendment could be obtained only with the approval of three-quarters of the members of the House and Senate and a plebiscite. The denial of seats in the House to six members of the leftist Democratic Alliance and three Nacionalistas on grounds of fraud and violent campaign tactics during the April 1946 election enabled Roxas to gain legislative approval on September 18. The definition of three-quarters became an issue because three-quarters of the sitting members, not the full House and Senate, had approved the amendment, but the Supreme Court ruled in favor of the administration's interpretation .

In March 1947, a plebiscite on the amendment was held; only 40 percent of the electorate participated, but the majority of those approved the amendment.

The Bell Act, particularly the parity clause, was seen by critics as an inexcusable surrender of national sovereignty. The pressure of the sugar barons, particularly those of Roxas's home region of the western Visayan Islands, and other landowner interests, however, was irresistible.

In 1955 a revised United States-Philippine Trade Agreement (the Laurel-Langley Agreement) was negotiated. This treaty abolished the United States authority to control the exchange rate of the peso, made parity privileges reciprocal, extended the sugar quota, and extended the time period for the reduction of other quotas and for the progressive application of tariffs on Philippine goods exported to the United States.

Through the 1970s and 80s, the United States owned 90% of all of the largest firms in the Philippines.

This is an incorrect information. May be, U.S. based corporation may owned the largest firms in the Philippines. But this information is a suspect because the list of Philippine companies are most Filipino owned. See link.http://en.wikipedia.org/wiki/List_of_Philippine_companies

Following WWII, the foreign debt owed by the Philippines was approximately US$640 million (1950s). By 1986, the debt increased to $22 Billion, and by 1998, the debt had amassed to over $40 Billion.[1]. The Bell Trade or Laurel-Langley agreement were not responsible for the increase of Philippine foreign debt.

Most of the foreign debt increased during the Marcos years. Quote.."The huge economic growth was largely financed, however, by U.S. economic aid and several loans made by the Marcos government. The country's foreign debts were less than US$1 billion when Marcos assumed the presidency in 1965, and more than US$28 billion when he left office in 1986. A sizable amount of these monies went to Marcos family and friends in the form of behest loans." See link http://en.wikipedia.org/wiki/Ferdinand_Marcos#Economy