Conditional approval of RP-Japan deal proposed

Published online in the February 1, 2008 issue of Business World

SENATOR MIRIAM Defensor-Santiago yesterday said she will propose a “conditional” Senate approval of the Japan-Philippines Economic Partnership Agreement (JPEPA), pointing out that the wide-ranging free trade deal needed to be amended or else be rejected by the Supreme Court for being in conflict with the Constitution.

“The JPEPA is very controversial. Amending or changing some provisions in the treaty is needed,” said Ms. Santiago, head of the Senate committee on foreign relations, adding that it is a “very, very rare” for the Senate to simply approve a treaty.

Many senators are in favor of approving the JPEPA, she said, but warned that without the amendments, the treaty will be deemed unconstitutional by the Supreme Court.

The provisions being contested involve “national treatment,” in which Japanese businesses will be treated as Filipino entities; the “most-favored nation treatment” where Japan will be equally treated with other countries with regard to other international treaties and concessions; and performance requirements, where Japanese firms are not required to transfer technology to the Philippines.

“If we insist on approving JPEPA but there are provisions against the Constitution, we can be sued by Japan in the international court,” Ms. Santiago said.

“The problem is, when we signed the JPEPA with Japan, we have not opposed the privileges for them that were included in the deal,” Ms. Santiago said. “It seems that they have tricked us.”

Fair Trade Alliance Executive Director Rene Ofreneo told BusinessWorld conditional concurrence would be favorable “if it amounts to a renegotiation.”

The group’s senior researcher, Errol A. Ramos, said the JPEPA promotes “economic imbalance.”

“We are not saying that we do not want [to be a trading partner of] Japan,” he said in a telephone interview. “We just want a fair and equitable trade treaty with them because it will be the basis of future trade agreements.”

He noted that the JPEPA is the Philippines’ first bilateral treaty after a parity rights deal with the United States following World War II.

Senate President Manuel B. Villar had said the Senate would make a decision on the JPEPA within the first quarter. Senator Manuel A. Roxas II, who heads the Senate trade and commerce committee, has decided to vote in favor of the treaty, saying the Philippines risks being cut off from the global supply chain without a free trade deal with Japan.

Under the JPEPA, tariffs on 95% of Philippine exports to Japan will be eliminated upon implementation. Import duties on industrial goods such as electronics and automobiles will be phased out within a ten-year period.

Immediately, sectors such as farming, fishing, and food processing will benefit from zero duties in Japan. As a sweetener, a limited number of Filipino nurses and caregivers will be allowed to work in Japan but they have to train first and learn Nihongo.

Japanese lawmakers have already approved the treaty and the Philippine Senate must do the same for the JPEPA to take effect.

The analysis of the Universal Access to Competitiveness and Trade, a nonprofit think-tank, estimated the JPEPA’s benefits to four industries — electronics, automotive, garments, and furniture — and found that investments could also increase by nearly $300 million to $445 million.

Upstream industries could also benefit when exporters purchase more inputs or raw materials, to the tune of $500 million to $751 million, said the think-tank, which is connected to the Philippine Chamber of Commerce and Industry.

The study was done on an assumption that exports of the four “vital” industries would go up by 20% to 30% with easier market access to Japan.

Much of the increase in export output and employment will come from semiconductor exporters (up to $1.26 billion in additional value and 135,549 new jobs), as the sector, on the average, accounts for 7% or $2.7 billion of total exports to Japan, the study showed. — B.U. Allauigan


  1. I am a Filipino and what Im looking forward is that they could come up with a wise decision for the interest of our nation

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