RP ‘big loser’ if Jpepa is ratified
By Butch Fernandez
Business Mirror
August 28, 2008
TWO acknowledged experts on constitutional and trade issues warned on Wednesday that Filipinos would end up as the big losers if the controversial Japan-Philippines Economic Partnership Agreement (Jpepa) is ratified. It is being debated in the Senate.
In a forum organized by the multisectoral group Magkaisa Junk Jpepa Coalition in Pasay City, Prof. Merlin Magallona, former dean of the UP College of Law, asserted that “Jpepa is an essential aspect of the Japanese relocation strategy and Jpepa’s benefits will be accruing mostly to the Japanese subsidiaries in the Philippines.”
Magallona said the Jpepa grants extensive national treatment to the Japanese that should only be for Filipinos—such as owning land, the practice of certain professions, and operating educational institutions. “This essentially places Japanese nationals and their investments at parity with Filipinos.”
He added that “if very little preference is extended to the Filipino vis-à-vis the Japanese investors under the Jpepa, what is the value of being a Filipino in your own national economy?”
Magallona also cautioned the Senate on the issue of the pending exchange of notes between Japan and the Philippines, which Sen. Miriam Santiago had claimed will address the constitutional issues in Jpepa. He said that “without the benefit of seeing the actual document, it would be very difficult to come up with a definitive analysis, favorable or otherwise.”
He also raised concerns on the impact of the notes on the Jpepa if it is executed merely between the Philippine and Japanese Executive branches, noting that the Jpepa was ratified by the Japanese Diet and is pending concurrence by the Philippine Senate. “Any amendment to the agreement entered into by the Philippines with Japan should at least go through a similar process, at a minimum.”
In the same forum, former commercial attaché Edna Espos shared Magallona’s view that Filipinos will be big losers to Japan.
Espos, also a former director of the Department of Trade and Industry’s Bureau of International Trade Relations, noted that Sen. Mar Roxas II had established two tests to gauge the success of Jpepa. “First, did we achieve our negotiating objectives, and second, did we gain more than we gave up? The answer to these tests is a resounding no.”
Espos said that one of the goals for entering into Jpepa is to gain market access for Philippine exports to Japan. “In order to achieve this goal, the Philippines under Jpepa drastically eliminated tariffs across the board, exempting only six tariff lines for rice and salt and negotiated on issues that it would not even do so under the World Trade Organization.”
But instead of reciprocating the gesture, she pointed out that Japan excluded from the coverage of Jpepa at least 197 tariff lines, constituting mainly agricultural and marine products for which the Philippines has competitive advantage.
“The long list of Japanese exclusions, long-term phaseout of tariffs and deferred market negotiations under Jpepa severely restricted agricultural gains by the Philippines under Jpepa,” she said.
Espos added that the purported easier market access for electronics, furnitures and automotive parts under Jpepa is not entirely true. “Even without the Jpepa, these products already enter Japan duty-free; Jpepa did not change anything. Philippine garments and footwear exporters cannot take advantage of the duty-free provision under Jpepa because their raw materials do not comply with Jpepa Rules of Origin, which mandates in part that the raw materials come primarily from Japan or any of the Asean countries.”
A crucial item the Philippines failed to get after giving up so much was the removal of the enormous Japanese agricultural subsidy (including subsidies on its fishing industry) that aversely affects millions of Filipino farmers and fisherfolk who cannot compete with subsidized products, she added.
Espos elaborated on the inequity of the Jpepa by pointing out the Philippines eliminated its fish tariffs under Jpepa, but Japan will not even commit to reduce its subsidies on its fishing vessels and will, in fact, even exclude fish products from the Jpepa.