JUNK JPEPA

JPEPA: How NOT to Negotiate an Economic Partnership Agreement

1. Main Paper

2. Imbalance of Commitments

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May 12, 2008 Posted by | Uncategorized | Leave a comment

MJJC Senate Submissions

1. Investments and Economics

2. Environment

3. Trade in Goods and Services

4. Movement of Natural Persons

5. JPEPA and USED CARS: Negotiation of Unlawful Issues

6. JPEPA and Government Procurement

7. Memorandum on Economic Claims

May 12, 2008 Posted by | Uncategorized | | Leave a comment

Reasons to JUNK JPEPA

1. The final text of the JPEPA was released to the public only after it was signed. Members of the House of Representatives, concerned groups, and individuals had to file a case in the Supreme Court to get a copy of the JPEPA.

2. Several House issuances had to be filed to inquire into the negative impact of the agreement to the lives and livelihood of the Filipino people.

  • House Resolution 00648
  • House Resolution 01400
  • House Resolution 01435
  • PS 00493
  • House Resolution 00065
  • House Resolution 00087
  • House Resolution 00203
  • House Resolution 00205

3. A comparative study on the commitments and concessions of the Philippines and Japan reveals that the JPEPA is primarily for Japan’s benefit. While Japan insisted on excluding, for purposes of protection, more than 200 (651 tariff lines) of its products (mostly agricultural and fisheries), the Philippines only chose to protect two of its products (6 tariff lines) by way of exclusion (rice and salt).

  • 651 protected tariff lines for Japan vs. 6 protected tariff lines for the Philippines

4. Until today, it remains unclear why the Philippines wants to join in the trend of entering into bilateral agreements. In fact, the Philippines’ own draft for its agreement is clearly modelled after Singapore’s agreement with Japan.

Our own draft shows that the Philippines adapted the Singapore draft [the Philippine draft still has the word ‘Singapore’ in it.This is highly objectionable because Singapore is clearly very different from the Philippines in terms of economic power and political structure.

5. JPEPA supporters cite the study of Cesar Cororaton and say that if the JPEPA is approved, the Philippines will benefit from a 0.09% incremental increase in GDP. It must be noted, however, that this figure does not appear in the entire paper.What appears however is a clear conclusion that with the JPEPA, agriculture will suffer: “prices drop, unemployment deteriorates, income inequality worses.”

6. JPEPA supporters claim that because of the JPEPA, the following industries, garments, electronics and semi-conductors, auto-parts, and furnitures will have a 20% growth in terms of exports. This is a baseless claim. The JPEPA will not change anything for these sectors. Even without the JPEPA, these items are already entering Japan at zero tariffs.

For garments, it is true that tariff rates will be reduced from 8.4%-10.9% to zero. However, the Philippines will not be able to take advantage of these reduced rates because Japan requires our manufacturers to buy the materials from any of the ASEAN countries or from Japan itself. Unfortunately, most of our garments companies buy their materials from China.

7. JPEPA supporters claim that the JPEPA is “expected to attract additional investmentof up to $444 million, resulting in the creation of 150,000 new jobs.” However, none of the official researches conducted by the Philippines mention these figures.

It must be noted that a World Bank Commissioned study states that “the share of FDI [foreign direct investment] received by developing countries is relatively unaffected by the signing of a BIT.”

A study by the United Nations Conference on Trade and Development (UNCTAD) also warns developing countries to be careful in entering into bilateral agreements or regional preferential trade agreements because “Such agreements may offer gains in terms of market access and higher foreign direct investment, but they CAN also limit national policy space, which can play an important role in the medium- and long-term growth of competitive industries.”

8. The JPEPA grants national treatment to Japanese investors and yet the Philippine negotiators made very scant reservations or exceptions to that commitment. Former Supreme Court Justice and international law expert Florentino Feliciano presented a paper to the Senate discussing the constitutional infirmities of the JPEPA.

As a result, the Philippines has failed to claim its own constitutional protections for investments in the following sectors: education, media, advertising, practice of all professions.

Furthermore, the Philippines’ commitment to reduce many of its tariff rates to zero is an encroachment of the fundamentally legislative power to set and modify tariff rates.

9. In violation of the Constitution, the JPEPA allows foreign ownership of Philippine private lands in all sectors except manufacturing and services. If Japanese investors wish to engage in real estate development, agribusiness, and other similar ventures, they can now own private lands in the country. This is a crime against Filipino farmers who continue to suffer and die in the fight to own the very lands that they till.

It must be exposed that Japanese investors have previously requested the Philippines to lift the constitutional rules on private land ownership[page 23 of Philippines-Japan: Where is the Philippines in Japan’s Plan).

10. The JPEPA allows corporations with 40% Japanese capital to engage in deep-sea fishing activities together with the Philippine government via joint venture agreements, production-sharing agreements or co-production agreements; a violation of the Constitutional rule which reserves the utilization and enjoyment of the nation’s marine wealth to Filipino citizens.

11. Toxic, hazardous, and nuclear wastes are included in the Philippines’ list of tradeable goods; a clear violation of national laws and the Basel Convention.

During the negotiations, the DENR wrote the DTI asking it to exclude these wastes from the list. Articles fit only for disposal were specifically stricken out in p. 16-17 of the 2003 Working Draft of the JPEPA. Yet, these wastes found their way back into the actual text of the treaty.

JPEPA proponents say that these wastes had to be included because these are part of the Harmonised System (HS). However, they conveniently do not mention the fact that aside from illegally including these wastes in the listing, the rates in the HS were not merely copied; majority was reduced to zero.

The sides notes issued to supposedly “fix” the problem merely promise a compliance of Philippine laws (Republic Act 6969) and the Basel Convention. However, both rules contain a “recyclables” loophole. If the toxic and hazardous wastes are shipped as recyclabes, our laws and the Basel Convention would not prohibit that.

It must be exposed that trade of toxic and hazardous wastes have been reported. On March 30, 2008, a Japanese paper reported that some governnment officials and waste dealers in the Philippine revealed that Japanese traders “export” toxic wastes under the name of “recyclable” to the country and the Japanese pay for the disposal of the wastes. The wastes practically bypassed the customs inspection, indicating that developing countries which have a poor monitoring mechanism are becoming a dump site of developed countries.

12. In Article 93 of the JPEPA, the Philippines waived its right to require Japanese investors to transfer technology to their Filipino partners. The Philippines also surrendered the right to require Japanese investors to hire a given level of Filipinos in their companies. Only the Philippines surrendered these rights. Malaysia, Indonesia, and Thailand reserved the right to require these from Japanese investors.

Even Singapore refused to surrender its right to require Japanese investors to “appoint, as executives, managers or members of boards of directors, individiduals of any particular nationality,” including those of its own.

13. By signing the JPEPA, the President already encroached into the legislative power to set and modify tariff rates. Further encroachment into the powers of the legislature have been committed.

Article 4 of the JPEPA requires the Philippines to “examine the possibility of amending or repealing laws and regulations that pertain to or affect the implementation and operation of this Agreement, if the circumstances or objectives giving rise to their adoption no longer exist or if such circumstances or objectives can be addressed in a less trade-restrictive manner.” This provision was not in the Working Draft of the JPEPA. It also does not exist in the EPAs of Thailand, Indonesia, and Malaysia: these countries simply committed to transparency in relation to their laws; not the active commitment of examining the possibility of amending their own laws.

14. Aside from intruding into the powers of both the Senate and the House of Representatives, the Executive Branch also tied the hands of these bodies by providing for dangerous commitments in the Congress’ power to pass protective laws for all sectors. Instead of using the same broad language that Japan used [they reserve the right to enact any measure to protect their sectors], the Philippines chose to limit the protective measures to provisions already found in existing laws. The Philippines’ reservations for future measures/laws merely contain protective provisions for 5 sectors. (see Annex 7, Part 2)

15. Filipino nurses will be allowed to work in Japan as mere trainees, relegated to the bottom of Japan’s nursing system. The JPEPA has national treatment provisions in the chapters for trade in goods, services, and investment. Contrary to the claim of the JPEPA supporters, the treaty does not have a national treatment provision in the chapter for the nurses (movement of natural persons).

Filipino nurses will be paid $400 a month in a country where the average cost of living is $1,000.

Aside from the discriminatory provisions, the JPEPA imposes impossible timelines for our nurses to comply with their requirements. For the first six months, they will be required to attend language courses and work at the same time.

Contrary to the claims of the JPEPA supporters, the mandatory contract for our nurses is only for one (1) year. Japan will decide whether or not these contracts will be extended for 2 more years. As a result, Filipino nurses must pass both the Japanese language exam and Japan’s nursing board exam within 1 year.

Our Philippine negotiators also failed to get the best possible deal for Filipino nurses: nurses from Indonesia are required only 2 years of work experience and a 3-year nursing course without a nursing board exam. Before Filipino nurses can enter Japan, they have to accumulate 3 years of work experience after passing the Philippine Nursing Board exam.

16. Importation of used motor vehicles, despite clear prohibitions in Executive Order 156, can now be negotiated in the JPEPA.

JPEPA supporters claim that the provision simply provides for negotiations on market access conditions and not an obligation to agree to the importation of used vehicles. This is an invalid defense: a country should not, in the first place, negotiate on matters that are already declared unlawful by virtue of law and jurisprudence.

It must be exposed that this provision does not exist in Japan’s agreements with Malaysia, Singapore, Indonesia, and Thailand. This provision was also not in the 2003 Working Draft of the JPEPA.

Factual circumstances in the area of trade of used vehicles cannot justify the negotiators’ claim that the provision is for “the protection of the Filipino people.” First, Japan does export used vehicles. Second, on March 31, 2003, Japan’s customs proceedures for exporting used vehicles were simplified. The Export Control Order was revised to eliminate separate export licenses for each vehicle. In addition, it is no longer necessary to have the Japan Auto Appraisal Institute certify that each vehicle meets certain standards and is free fromfunctional flaws (Japan External Trade Organization Working Paper No. 2, January 15, 2004).

The pro-Filipino choice is simple: JUNK JPEPA and JUNK JPEPA now!

May 6, 2008 Posted by | Uncategorized | | 1 Comment

Official Texts

1. Full text of the Japan-Philippines Economic Partnership Agreement (JPEPA) -final

2. Draft text of the JPEPA

3. Joint Coordinating Team Report on the JPEPA

May 6, 2008 Posted by | Uncategorized | | Leave a comment