Japan explains as Jpepa row rages

Fair Trade Alliance: Renegotiate before Senate, Diet ratification
By Max V. de Leon
Published frontpage of the October 31, 2006 issue of the BusinessMirror

THE Fair Trade Alliance (FTA) on Monday called for the renegotiation of the recently signed Japan-Philippines Economic Partnership Agreement (Jpepa) before it is transmitted to the Senate for ratification.

The FTA said this will allow the country’s negotiators to even out the terms since the current 1,400-page document is all about what Japan is willing to give and wants to get from the Philippines.

“Japan got what they wanted from us, we were not able to get what we wanted from them—a fair, good deal. The deal was good for Japan, it was a bad deal for the Philippines,” the FTA said.

The group noted that under the deal, tariffs for Philippine agricultural products remain high while industrial goods are subject to quota or trade barriers.

The free flow of capital or investments under the commercial presence chapter, the group added, is allowed even as the free movement of labor covered under the movement of natural persons, which the Philippines seeks, is restricted.

Rene Ofreneo, FTA coconvenor, said since the Jpepa has not yet been ratified by the Philippine Senate and the Japanese Diet, there is still flexibility to modify its contents.

By remanding the document to the negotiating table, the obvious flaws, including the trading of toxic waste, will be corrected, he added.

Ofreneo said if the waste and residues are not deleted from the trade in goods chapter, there should be provisions saying that this matter would be subject to the rules of the Kyoto Protocol and the Basel Convention, which bans the transboundary movement and disposal of hazardous waste.

The Japanese government, however, clarified on Monday that it would not dump toxic and other hazardous waste into Philippine waters without the consent of the host state.

The Japanese embassy said its government follows an established legal framework based on the Basel Convention and has been enforcing strict export/import control.

The treaty does not allow any export of toxic and hazardous waste to another country, including the Philippines, “unless the government of such a country approves such export,” it added.

Environmental groups earlier warned that the Jpepa, signed in Helsinki, Finland last September 9, 2006, would allow Japan to dump its hospital and other hazardous wastes into Philippine waters in exchange for the deployment of Filipino nurses and caregivers to Japan.

“Japan remains strongly committed to the strict enforcement of such export/import control, which will prevent any illegal export of toxic and hazardous wastes to the Philippines,” said the Japanese government.

The Japanese Embassy also said trade representatives of the two governments met on October 27, 2006 to affirm the commitment of the two governments to enforce strict control on the export/import of the toxic and hazardous wastes in accordance with the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, to which both Japan and the Philippines are parties.

It added that the Japanese government hopes Jpepa will come into force at the earliest possible date through Senate ratification in the Philippines.

Jpepa seeks to boost trade facilitation between the two governments by lowering tariffs on agricultural products and allowing the deployment of Filipino nurses and caregivers to Japan to attend to its graying population.

In exchange, the government of Japan expects lower tariffs for its cars and other automotive parts and information technology products entering the Philippines.

In pushing for a renegotiation, Ofreneo said this is an opportunity for the government to allow all stakeholders to participate in the crafting of the negotiating points.

“There is a failure on the part of the government negotiators to do serious and in-depth discussions with the stakeholders.

This should be subject to full scrutiny,” he added.

Another glaring mistake, in his view, was allowing the so-called Singapore Issues, which even the World Trade Organization (WTO) dropped, to be incorporated in the deal.

The Singapore Issues—which sets the parameters for global investments, government procurement, trade facilitation and competition policy—failed to get the consensus of the developing countries because of the foreseen disadvantages they will create, explained Ofreneo.

However, since they were included in the Jpepa, the Philippines is effectively agreeing to the institutionalization of the Singapore Issues. With E. Torres

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  1. Clearly, this treaty is lopsided. We should not allow our country to be a dumping ground of another’s waste for a few dollars and a handful of workers. If they want a fair treaty, then all restrictions on us should be lifted. Would Japan allow our waste to be dumped in their backyard?

  2. Reming Tong

    The JPEPA and its Annexes can be accessed in DTI website – more than 900 pages. A very complicated agreement with numerous annexes/references to WTO, GATT, other international agreements, etc. Some items such as the description of the products or goods are not even mentioned directly on the agreement, you need to refer to prior agreements (executed 2 or 3 years ago) in order to ascertain what products are being referred to.

    Aside from wastes – toxic or not to be exported by Japan to Phils and Japan’s concession in allowing our caregivers/nurses to work in Japan, the market access for Phils/Japan under JPEPA are mentioned below.

    In market access on agricultural products granted by Japan in favor of the Phils, it allowed, at minimal tariff rates, products of Phils covering sugar/mascovado & molasses (2,300MT to increase to 3,400MT in 4 years at half of existing tariff rate), chicken meat (3,000MT to increase to 7,000MT in 5 years at 8.5% tariff), pineapples (1,000MT to increase to 1,800MT in 5 years at 0% tariff), fishery products like tuna (to eliminate tariff in 5 years), small bananas (no limit at 10 – 20% tariff). While Japan’s agricultural products and fruits are allowed market access to Phils at 0% tariff.

    On the other hand, Phils granted Japan market access on industrial goods such as iron/steel (175,000MT to 207,500 in 3 years at 0% tariff), auto and auto parts at 0% tariff, electrical and electronic appliances and parts at 0% tariff, textiles and apparels at 0%. The combined amount of these imports to Phils would run to millions of dollars compared to paltry agricultural exports of Phils to Japan mentioned above. On iron/steel alone, it will hurt the local steel industries and may even cause numerous job displacements. Understandably, Japan eliminated its tariff for industrial goods coming from Phils (which is already 0% for electronic parts such as microchips etc – produced by Japanese corps) – actually there is no such Phil industrial goods manufactured by a Filipino owned corp that is being exported to Japan.

    In addition, Japanese commercial fishing industry is allowed unhampered access to Phil EEZs as provided in Article 28 & 29, Chapter 3 of JPEPA. In my estimate/guesstimate, the yearly catch by Japanese commercial fishing fleets could even reached around 100,000MT to 500,000MT with equivalent value of $500M to $2.5B! (certainly huge) – this quantity is not far off if Japan will deploy a number of its 8,000 ton factory ships grazing Phils EEZs – all these income goes to the pockets of Japs and some hare-brained locals. The impact to the Phil fishery resources as well as to the local tuna industry will be worse because it will completely deplete Phils EEZs fishery resources in a span of 5 years – leaving the elimination of tariff rate by Japan on fishery products on the 5th year meaningless. I can only surmise that Japan’s reason for pursuing this can be due to the proximity of Phils to Japan, the depletion of other tuna areas (Atlantic, Indian Ocean, Eastern/Central Pacific), ensuring the survival of its fishing industry even it will be detrimental to Phil tuna industry and to maintain the stability of the prices of tuna in the near future which will most likely spike up due to supply constraints.

    JPEPA could have been a good agreement if the terms were fair and has taken into consideration the essence of “reciprocity and equality” – a benchmark used by most countries in entering into free trade agreements and taking into consideration that Phils and Japan does not stand in equal footing. In this context, Japan has to yield more concessions than Phils would give. But the outcome of the JPEPA was quite lopsided in favor of Japan.

    I barely scratched the entire agreement and there are still a lot of areas to be studied in JPEPA such as on land ownership, access on mineral/forest lands and coastal resources, repatriation of capital/profits, intellectual property rights, etc. I wonder why Phils/DTI are mum on disclosing these things?




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