Economists, business group back JPEPA due to its net benefits

Published on S1/7 of the November 8, 2006 issue of the BusinessWorld

‘Better than no deal at all’

Economists and leaders of business groups yesterday said the Senate should ratify the Japan-Philippines Economic Partnership Agreement (JPEPA) because it is “better than no deal at all.”

University of the Philippines economist Felipe M. Medalla, a former socioeconomic adviser to President Gloria Macapagal Arroyo, said during yesterday’s Senate hearing on JPEPA that ratifying the agreement would enable the Philippines to improve on portions perceived to be disadvantageous since it is a “take-it-or-leave-it” matter.

“If we don’t sign it now, will we get something better? The cost of being excluded from the agreement is quite high. And the threat [of JPEPA] to Philippine industries is quite marginal,” he said.

Mr. Medalla joined former Tariff commissioner George N. Manzano of the University of Asia and the Pacific in saying that it would be prudent to study JPEPA in the context of all other free-trade agreements (FTAs) being signed by Japan with other Asian developing economies. “Because if we look at it that way, there is such a thing as the cost of being excluded. Whether we like it or not, [bilaterals] is a game that is being played right now,” Mr. Manzano said.


Both economists stressed that the risk of importing toxic waste under JPEPA has become a “non-issue” because “nontariff barriers” like the mandated issuance of “import clearance” imposed on both countries should provide adequate safeguards.

This was seconded by Customs Commissioner Napoleon L. Morales, who said that Japan is aware of the Philippines’ existing procedures on importation of goods which need certificates of importation.

The Department of Environment and Natural Resources, which had formally cautioned the Trade department on the “waste provisions” before the agreement was signed in Helsinki, Finland last Sept. 9, said it would “conditionally” support the JPEPA given the existence of “nontariff barriers” as safeguards.

The country’s chief trade negotiators likewise stressed that there are safety nets in the JPEPA that would allow both countries to review the agreement in the future.

JPEPA lead negotiator Trade Senior Undersecretary Thomas G. Aquino said he expects the agreement to encourage more Japanese investments in electronics, automotive and other industrial sectors, and give the Philippines more market access to the Japanese market for its agriculture and services.

“The principal objective in mind is to be able to gain access to more economic activities in the regional and global front because of developments happening in the region, and the vehicle for doing that is the bilateral agreement with Japan,” Mr. Aquino said. “We were able to get significant access for agricultural products.”

But economist Rene E. Ofreneo of the Fair Trade Alliance said JPEPA’s impact on industries still was not clear. “We do recognize that we gained some limited access to agriculture…but it is not clear what will be the impact to industries,” he said.

The JPEPA, signed by the President and former Japanese Prime Minister Junichiro Koizumi last Sept. 9 in Finland, would slash tariffs on Filipino agricultural products and Japanese industrial goods.


Philippine Chamber of Commerce and Industry (PCCI) president Donald G. Dee, who has been supportive of JPEPA, said PCCI is set to release results of studies on the impact of global trade on at least 21 sectors.

“We were really having difficulties and struggling with the JPEPA, but the consultations with the DTI went on continously,” Mr. Dee said. “I must say that while we are not 100% upbeat, we never looked at Japan as a country that would dump their products on the Philippines.”

Nevertheless, Senator Manuel A. Roxas II, chairman of the trade and economic affairs panel heading the investigation, said he wants to expand and weigh the pros and cons further of the tradeoffs under JPEPA, adding that subcommittees in his committee would be formed to facilitate further studies. He said it is important to differentiate theoretical from actual gains for the Philippines, directing business groups to submit reports of per-sector impacts of the JPEPA.

Dr. Lea Samaco-Paquiz, vice-president of the Philippine Nurses Association, said one “theoretical” gain is the opening of Japan’s doors to Filipino health workers and nurses. She said Japan has strict regulations for nurses and it would be very difficult for Filipinos to pass that state’s nursing eligibility examinations. — Reagan D. Tan


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  1. 1 The Unlawyer » JPEPA Ratification Stalled

    […] that are batting for the JPEPA’s ratification by the Senate. Those that do tend to take the negative approach, that is, warning everybody of the consequences if it isn’t approved by the Senate, while at […]

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