Trade alliance seeks transparency on Japan-RP FTA negotiations

By Bernie Cahiles-Magkilat
Published on the June 15, 2005 issue of the Manila Bulletin

The multi-sectoral Fair Trade Alliance (FTA) has urged the government for transparency in the crafting of the Japan-Philippines Economic Partnership Agreement (JPEPA) as it expressed fears that the deal does not provide “safeguards” to the country’s industrial goods and includes regulation and competition issues.

In a statement, the FTA lashed at Trade and Industry Senior Undersecretary Thomas G. Aquino, chief government negotiator, for not heeding the request of the House of Representatives for a copy of the latest draft agreement and the list of ‘excluded goods’ made by the two negotiating sides.

“We, at the Fair Trade Alliance (FTA), bewail the lack of transparency in the way the executive branch of the government is crafting the JPEPA. In fact, the executive branch is foisting the JPEPA on the nation as if it is a done thing, a fait accompli,” the FTA statement said.

First, the FTA said, it appears that the Philippines is offering a comprehensive list of goods to be liberalized without any clear reciprocal counter-offer from Japan. If this is so, JPEPA will become a onesided liberalization agreement, with the liberalization taking place mainly on the Philippine side.

Second, it is reported that the JPEPA does not have a ‘safeguard’ or ‘safety net’ clause, which means Philippine industries will have no remedies against import surges and dumping.

Third, the JPEPA includes the so-called ‘Singapore issues’ (government procurement, trade facilitation, investment and competition policies), which were thrown out in the failed WTO Cancun Ministerial in 2003 because these issues encroached on the independent capacity of developing countries to determine their development priorities.

The FTA further noted that in the first tariff hearing and in Congressional hearings on JPEPA, it was pointed out that these negotiators have glossed over the adverse impact of the agreement on certain domestic producers.

For example, the FTA statement said, non-Japanese automobile assemblers and auto parts makers are worried that JPEPA will reduce their shares of the market.

The impact on local appliance, cement, resin and other industrial producers is also likely to be negative. It is unclear how the agricultural sector shall gain from JPEPA. There is also a reportedly long list of excluded Japanese products which our trade negotiators are reluctant to share.

But what the country’s negotiators have assured of was that the JPEPA is good for the Philippines as a whole for it will increase trade and investments in the country and will accordingly alleviate poverty.

The FTA further labelled as bargaining sweetener the proposed liberalization of the entry of Filipino health and IT professionals into the Japanese labor market because of the recent move of Japan to restrict the number of Filipino entertainers or Japayukis.

On the other hand, the FTA statement said, it is clear that Japan is aggressively promoting the enhanced bilateral ‘economic partnership agreements’ (EPAs) with the Philippines and other ASEAN/Asian countries as a way of countering the efforts of China to conclude an ‘early harvest’ (preparatory to full free trade) agreement with these countries as well as the bilateral free trade initiatives being made by the United States and other countries.

In short, Japan wants the region to remain firmly under its sphere of influence, in support of its own trade and development agenda. JPEPA is supposed to lead to a free trade area for both countries by 2016 when tariffs of products traded between the two countries have gone down to zero.

Specifically, the FTA said, it wants the region to remain as a reliable source of agricultural and raw materials for Japan, a secure market for Japanese goods and an integral part of the global production chains of Japanese multinational companies.

On the advice of the Cabinet Committee on Tariff and Related Matters (CTRM), the Philippine Tariff Commission is presently reviewing a proposed schedule of tariff reduction on goods traded between the Philippines and Japan. The tariff reduction schedule is one of the two main features of a proposed Japan-Philippine Economic Partnership Agreement (JPEPA), which seeks to reduce to zero the tariffs on Philippine and Japanese goods within a ten-year period (2006-2016). The other feature of the JPEPA is the so-called ‘economic partnership enhancement,’ which calls for increased cooperation in the areas of financial services, ICT, energy, science and technology, human resource development, trade and investment promotion, small and medium enterprises, broadcasting and tourism

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