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Manila-Acapulco Galleon Trade and Maritime Silk Road: Parallels and Nexus

May 15 , 2015

Reviving the glory days of ancient trade routes serves not only modern day economic needs, but also reignite claims to national greatness, past grandeur, longstanding commercial significance and, in the case of maritime trade routes, a deeply-rooted history of seafaring and maritime culture. Much of long-distance trade has long been and is still is transported through the sea and as Asian economies continue to drive much of global business traffic, the importance of such sea lanes to and from the region will only continue to rise. Similarly, growing pressure on land-based resources and advances in technology facilitates the development of better means to harness the bounty of the sea. Philippine efforts to revisit the historical value of the Manila-Acapulco Galleon Trade (MAGT) and China’s revival of the Maritime Silk Road (MSR) can be seen as national projects aimed at rekindling a deep historical relationship with the sea and recreating this nexus to serve contemporary economic imperatives.

Last April 23, 2015, the Philippines held an experts roundtable meeting as part of its preparation for a possible joint nomination of MAGT with Mexico to the UNESCO World Heritage List. The Outstanding Universal Value of MAGT was summarized as follows: 1) “remarkable significance for linking four continents and two oceans, contributing to the development of trade in Asia, Europe, North and South America; 2) paved the way for the widest possible exchange of material goods, cultural traditions and practices, knowledge and belief systems and peoples; 3) for some 250 years, it served as a formidable bridge between East and West; 4) today, it is considered as an early manifestation of globalization, having influenced the politics, philosophy, commerce, and trade development of almost the entire world.” In addition, it is said that “the Route becomes symbolic of UNESCO and the World Heritage Convention’s aims and objectives in establishing peace across nations through shared heritage and a culture of understanding.” The discussion involved local experts in history, maps and cartography, shipyards, underwater archaeology, and textile and there are plans to collaborate with their Mexican counterparts to bolster the joint submission. In pursuit of promoting the 21st Century Maritime Silk Road, China, for its part, organized a two-day international seminar last February in Quanzhou, Fujian inviting 280 academics and experts from 30 countries, including the Philippines. China also opened a Maritime Silk Route Museum in Guangdong in 2009. Thus, the Philippine initiative can be seen as part of a national effort to rediscover and reconnect with its maritime roots, while China attempts to revitalize the importance of maritime commerce especially given its present burgeoning economy.

Manila is one of Asia’s most bustling historic entrepots especially during the heydays of MAGT.  And this Galleon Trade has a strong China connection since most of the goods that went to the New World via Manila are actually from China. Southern Chinese merchants set up shops in Manila to facilitate the trade of goods from Mainland carried by junks across the South China Sea which would then be shipped to the Americas through the galleons. Hence, in New Spain (former name of Mexico), the Manila galleons were also known as “Lanao de la China” or China ships as they are mostly laden with China-sourced goods. Thus, Manila connected China and the Americas. In fact, this lucrative trade encouraged Chinese immigration to Manila resulting in the city playing host to the world’s oldest Chinatown outside China which still thrives to this day. But even prior to MAGT, Philippines-China seaborne commerce has a long history dating back 982 AD when natives of present-day Mindoro Island and Guangzhou engaged in trade. Since then, many other places in the Philippines, such as Butuan and Sulu, began trading contacts with Chinese merchants. MAGT bolstered this maritime trade connection.

This year, as the Philippines succeeds China in hosting the APEC Summit, a new Galleon Museum would be inaugurated in Manila Bay to celebrate the contributions of the trade not only to Philippines and Mexico but also to the rest of the 42 countries which benefited from this Trans-Pacific and Trans-Atlantic ocean voyages. Filipino-Chinese SM Group and local shipping magnate families contributed to the Project. Proposals for the Museum were discussed with the ambassadors of the countries involved in the Galleon Trade in a diplomatic reception organized by then Department of Foreign Affairs Secretary Alberto Romulo back in 2010 with many participants expressing support, including former Chinese Ambassador to the Philippines Liu Jianchao.

However despite these developments, Philippine renewed interest in revisiting the importance of MAGT remains largely symbolic, historical, cultural and academic, although this could set the ground for improved ties and cooperation in other fields in the future. And as Philippine economy continues to grow and diversify, Philippine-Latin American trade relations may gradually change for the better as well. Furthering trade with emerging economies such as those in Latin America can help mitigate opportunities lost from traditional trading partners which had recently suffered economic setbacks such as the EU or are under slow recovery such as the U.S. In addition, Latin America emerging markets may constitute new destinations for Philippine exports and Latin American capital can also boost the country’s foreign direct investment.

On the other hand, China-Latin America economic and political ties continue to accelerate. Next year, 2016, China is poised to overtake the EU to become Latin America’s second largest trading partner after the U.S. This projection has good anchor since as early as 2009, China already outpaced the U.S. for instance, to become the largest trading partner of Brazil, Latin America’s biggest economy. China has also become the largest trading partner of Chile, the only South American country admitted to OECD, and the second largest trading partner of Mexico, the only other OECD member in Latin America. In addition, in 2014, a Summit between China and the countries of Latin America and the Caribbean was held in Brasilia wherein parties agreed to established a Forum of China and Community of Latin American and Caribbean States (China-CELAC Forum), the first ministerial meeting of which was held in Beijing last January 2015.

Right now, MSR is focused on connecting China with the Middle East, Africa and Europe through the South China Sea, Malacca Strait, Indian Ocean, Red Sea, Suez Canal and Mediterranean Sea. But the growing Sino-Latin American trade may encourage an extension of the MSR across the Pacific. It may also reignite the importance of MAGT, a 250-year old maritime trade route that connected the Middle Kingdom with the then New World – a key global commercial artery wherein Manila played a critical role as gateway. Such trade will further enhance the significance of Philippine waterways, notably the Luzon Strait, making their security and open access a shared interest of all involved trading states. China can choose to go ahead with any plans to improve maritime trade connectivity with Latin America but doing this directly will possibly create some discomfort on the part of other Pacific parties anxious about the expansion of Chinese influence in their traditional spheres. But if China would consult and work with relevant states, such as the Philippines, a frontline maritime state with good relations with its Pacific partners and neighbors, such issues may be mitigated. Therefore, the revival of a modern-day MAGT has the potential of linking with MSR, enabling China to better reach Latin America and, by so doing, propel Manila to become a major maritime hub once again.

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