Trade deal violates charter

By Bernardo V. Lopez
Published in his UPSHOT column, September 19 issue of BusinessWorld

JPEPA is blatantly unconstitutional in its factory ship provisions. Article XII states that our marine wealth and territorial sea, their “use and enjoyment” are vested “exclusively to Filipino citizens … For deep-sea fishing, corporations with maximum equity of 40% can enter into co-production or joint venture.” JPEPA exempts 100% Japanese-owned factory ships in violation, virtually extending Philippine waters as part of Japanese territory in terms of exploitation.

Unlike the environmentalists, with their battlecry ‘junk JPEPA’, the position of the Fair Trade Alliance (FTA) is not to junk but to renegotiate. You cannot blamed the green guys because when they asked the Japanese representatives to delete JPEPA provisions on the export of Japanese industrial toxic waste, they, in their arrogance, said ‘take it or leave it’. So leave it, say the environmentalists The FTA position says there is value in bilateral trade deals, but only if it balances benefits against risks, if truly projects Filipino interests, and it protects us from unfair practices.

The FTA says the Constitution, RA 8550 or the Fishery Code and RA 8435 or the Agriculture Fisheries Modernization Act are “rendered meaningless in the face of JPEPA provisions.” JPEPA has remained secret for a long time because its provisions are too shocking to reveal. For example, it defines under the Rules of Origin (ROO) that fish caught by Japanese factory ships in Philippine waters ‘originate’ from Japan, and as such carry certain trade and tariff privileges. Under Section 2 of Article 29 of JPEPA, “goods of sea-fishing (2f) … shall be considered as being wholly obtained and produced entirely in a Party (2). “Party” refers to Japan in reference to Japanese factory ships. There is deceit in this JPEPA definition.

Rep. Neri Tanada complained how, in past hearings, Tom Aquino never revealed the contents of JPEPA for a long time, justifying that it had to remain ‘secret’ and not be known by the public who will be affected. FTA got its copy from the Senate only recently. Such bilateral trade agreements are public documents and people have a right to know. There have been no public consultations, which makes JPEPA illegal. If Tanada did not question JPEPA, it would not be a treaty today but simply an executive order at the whim of Malacanang. Malacanang wanted it that way but Tanada objected.

Tanada has thus authored a bill to create a Philippine Trade Representative Office which will insure that we do not sell our souls in secret bilateral trade deals orchestrated by the executive branch. The US has such an office, employing an array of trade and legal specialists who protect American interests. Who is protecting our interests, Aquino and Favila? We need to institutionalize trade deals, not leave them in the hands of political appointees who obey orders of Malacanang.

In JPEPA, invoking its laws, Japan placed so many provisions to over-protect its territory and interests, and under-protect ours. This is sprinkled all over the JPEPA. Articles 3, 4 to 12, and 14 invoke their laws insuring the protection of their territorial waters while they have the right to fish in our waters. Article 3 protects foreign direct investments. Japan has the right to repatriate 100% of capital abroad. They also have a right to obtain critical business intelligence information from our aquatic resources. Is this in preparation for moving in, of setting up large JPEPA-protected Japanese-controlled fishponds? The entire JPEPA was authored by the shrewdest Japanese lawyers and businessmen who were thinking we would not even read, much more object to these one-sided provisions, since they probably would remain secret as demanded from Filipino counterparts. One can write a four inch book on the flaws of JPEPA to the Filipino’s interests because we never studied it in depth.

Asian history of trade deals reveals that, when the WTO started losing its clout due to protests from poor countries against the rich countries who authored it (in the same way the Japanese authored JPEPA), bilateral or one-on-one trade deals started mushrooming. Japan, China and the US were competing intensely for the ASEAN markets. When
China struck a regional trade deal with the ASEAN, the jealous Japanese started doing bilaterals with individual ASEAN nations. Bilateral is a preferred option because it is harder to change your mind once negotiations have been finalized, whether covertly or overtly. Japan struck a JSEPA with Singapore, but they cannot just step on that small rich finance-bound nation, unlike the Philippines where their target is our rich raw material resources and fishing grounds.

In this way, JPEPA is a ‘model’ for deals with resource-rich Third World countries. They also know our government, like most corrupt-prone Third World nations, is weak in protecting people’s interest, evident from the way we handled the WTO, wherein we accepted without question and had very few protests. The outcome of JPEPA will decide the future of Japanese bilateral trade deals with ASEAN and Latin American countries. If they succeed in getting what they want from us, they will use the same approach the rest.

Meanwhile, China and the US are just fence sitters for now. If JPEPA pulls through, they are automatically in the same ball game because of the ‘most favored country clause’ which says any deal with Japan applies to all other countries.

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