What JPEPA (REALLY) has to offer:
A Civil Society Perspective
By: The Magkaisa Junk JPEPA Coalition
July 6, 2007
Background
The Japan-Philippines Economic Partnership
Agreement, popularly known as JPEPA, is a
comprehensive bilateral investment and trade
agreement.
Last June 28, 2007, a two-page JPEPA ad ran through
major dailies, carrying the message of bright prospects
for the Philippines under the treaty, heralding “a new
age of growth" that would “ensure a future of prosperity"
for the Philippines. This paid ad – which did not name
its source of funding - has been one of several attempts
to convince the Filipino people of the benefits of the
JPEPA.
The Magkaisa Junk JPEPA Coalition (MJJC),
convened last year, is a broad multi-sectoral coalition
composed of health care workers, labor groups, migrant
rights advocates, farmers, fisherfolk, environmental and
trade advocates, members of academe, and other
concerned Filipino groups. It aims to counterbalance
the aggressive government promotion of what civil
society sees as an undemocratic treaty which sacrifices
the country’s long-term economic development for
minuscule and short-term gains.
This briefing paper, which has been prepared by the
MJJC, aims to inform the public about the truth behind
the government’s claims on the benefits of the JPEPA.
Claim 1- JPEPA will boost Philippine agricultural
exports.
The Philippines already enjoys a positive trade
balance with Japan as far as agricultural exports
are concerned even without the JPEPA. As pointed
out by the Tambuyog Development Center, the tariff
for Philippine tuna is already at a low 3.5%, while
that for shrimp is at 0 %. Also, not all Filipino exports
get a boost from JPEPA. Bananas, our top export, will
gain tariff-free entry only in 10 years’ time.
Japan has likewise refused to lift its quotas on regular-
sized Philippine pineapples. It also denies market
access to Filipino exports of sardines, mackerel,
anchovies, and seaweed, which are the fishery
products commonly harvested by municipal fishers.
This could have been the most direct and significant
means of alleviating poverty among municipal
fishermen.
Claim 2 – JPEPA eases market access for
Philippine products.
The very complex and stringent Rules of Origin under
the JPEPA may actually make it more difficult for
Philippine exports to enter Japan. An increase in
exporters’ compliance costs may force them to
completely overhaul their production processes just to
suit the peculiarities and preferences of the Japanese
market.
It must likewise be pointed out that Japan is known for
its very stringent non-tariff barriers which have
effectively denied market access to Philippine products
and services on various occasions. These non-tariff
barriers will continue to exist even under the JPEPA.
Claim 3 - JPEPA enhances the Philippines’
attractiveness as an Investment haven.
In a survey conducted just a few months ago, Japanese
investors identified the Philippines as the 2nd least-
favored investment destination in Asia, citing
macroeconomic instability, corruption, contracting and
regulatory uncertainty, poor infrastructure, high power
costs, high costs of doing business, and peace and
order concerns as their reasons for choosing to stay
away from the Philippines. Investment liberalization
under the JPEPA cannot possibly solve our investment
problems for as long as the government refuses to
address the root causes of the country's poor
investment climate.
Claim 4 – JPEPA will open up Japan’s labor market
to Filipino health care workers.
Efforts by the Japanese government are underway to
limit the entry of Filipino health care professionals to not
more than 400 nurses and 600 caregivers for the first 2
years of the JPEPA. This quota being imposed by the
Japanese government is not provided for in the JPEPA
and effectively undermines whatever access the
Philippines is supposed to have gained under the
agreement. Besides the quota, Filipino nurses would
also be required to master written and spoken
Niponggo to pass board examination that routinely is
failed by more than half of the Japanese nationals who
take it.
There is likewise no guarantee that our migrant workers
in Japan will be treated fairly, given decent work, and
protected against exploitation and abuse. In fact, even
the Philippine Nurses Association (PNA) itself is greatly
critical of the JPEPA because it suspects the Filipino
nurses and caregivers will face a lot of discrimination
and will be treated as second-class professionals in
Japan. Filipinos may even end up working into the
Japanese sex industry or entertainment joints for
lack of better opportunities.
Claim 5 – Enough safeguards are in place to
prevent toxic waste trade under the JPEPA.
By eliminating tariffs on toxic wastes and other globally
banned or controlled substances or chemicals, JPEPA
creates the market environment conducive for
waste traders and investors to engage in toxic
trade, thereby undermining laws such as the Toxic
Substances and Hazardous and Nuclear Wastes
Control Act (R.A. No. 6969) and the Basel Convention.
Also, Article 4 of the JPEPA states that the Philippines
shall examine the possibility of amending or repealing
laws and regulations – including the previously
mentioned environmental safeguards - if they restrict
trade under the JPEPA.
It is claimed that agreements similar to JPEPA that
Japan contracted with Singapore and Malaysia also
contained provisions relating to toxic waste, and yet
nothing bad has happened to either one.
The situation of the Philippines is unlike that of
Malaysia and Singapore. Malaysia has ratified the
Basel Ban Amendment, which effectively blocks the
entry of Japan's toxic waste into Malaysian territory.
The Philippines, on the other hand, has the Basel Ban
Amendment untouched. Singapore is a port city, and
most goods or wastes merely pass through it.
Moreover, both countries' ports have better customs
monitoring, compared to the Philippines’ notoriously
porous borders.
Claim 6 – The “dynamic” economic gains of the
JPEPA will result in “enormous” social benefits and
ultimately translate into poverty alleviation.
The JPEPA adheres to a development model that
assumes growth in the export sector will trickle-down to
the rest of the economy.
The Philippine Institute of Development Studies (PIDS)
admits its JPEPA studies focused on big business,
export industries, and cash crops and that very little
attention was paid to micro, small and medium-
enterprises – sectors which constitute almost 97% of all
businesses in the country.
It must likewise be pointed out that the social
ramifications of a migration-led economic policy have
yet to be addressed by the government. There is a
distinct possibility that all the benefits of OFW
remittances may be severely outweighed by the social
repercussions of separated families.
Claim 7 – The JPEPA will create “near-limitless
opportunities for economic growth” and a “future
of prosperity.”
Beyond the overly rosy projections, the JPEPA raises
nagging questions that we must collectively address as
a nation and as a people. What is our development plan
for the Philippines?
As articulated by the Fair Trade Alliance, after over 3
decades of partnership with Japan, the Philippines
remains a junior economic partner of Japan. While
Japan exports higher-value products such as cars and
appliances to us, the Philippines merely exports lower-
value products such as semiconductor devices, wire
harnesses, banana, and tuna. The JPEPA will not
contribute to the country’s industrialization but will
merely reinforce this existing pattern.
Moreover, beyond the toxic waste issue, the other
environmental repercussions of increased trade and
extractive industries under the JPEPA need to be
studied closely.
Conclusion
It is highly unlikely that JPEPA will be the harbinger and
engine of prosperity, growth, and poverty alleviation
that it is being made out to be.
With the negotiation of the JPEPA and all the other
FTAs that are lined up after it, the Philippines should
not rush blindly and haphazardly into these
agreements. While we must take advantage of
opportunities that arise, we must at the same time
proceed cautiously and judiciously, carefully assessing
whether such agreements will contribute to the long-
term economic and social development of the
Philippines or sacrifice such long-term development in
exchange for short-term gains.
In the government's irrational exuberance with the
JPEPA and other FTAs, it is forgetting the truly
essential things that make an economy great—
investments in domestic industry, agriculture, and
labor productivity, good governance, strong
national institutions and a pride in its people.
Recommendations
1. Do Not Ratify JPEPA.
2. Address the fundamentals of national economic
development. Investment and trade liberalization
cannot improve the country’s competitiveness for as
long as the government fails to address the root causes
of economic malaise: lack of public and private
investment and capital formation, macroeconomic
instability, massive corruption, poor infrastructure, high
power costs, high costs of doing business and
contracting, regulatory uncertainty, and poor investment
in human development and labor productivity..
3. Address broader concerns against the JPEPA
through robust and transparent hearings in the
Senate. Concerns from farmers, fisher folk, indigenous
communities, small and medium business enterprises,
migrant workers, and other stakeholders have not been
fully heard. Stakeholders were not consulted until after
the JPEPA was signed, with very little democratic
space being given to ensure that stakeholder concerns
were heard and considered.
4. Push for people’s participation and consultation
in all areas of economic and trade policy making, at
all levels of government and ensure that all
subsequent trade and investment agreements
negotiated are subjected to extensive public
consultation and scrutiny and Senate approval.
5. Improve the research, negotiating capability, and
inter-agency coordination of the government to in
international trade negotiations.
6. Define a national development agenda that
harmonizes trade and economic policy with long-
term development, social, industrial, environmental,
and labor objectives. It is high time that we asked
ourselves where we are going as a nation and as a
people. Are we content with being importers of another
country’s products and wastes, and exporters of Filipino
labor?
7. Ratify the Basel Ban Amendment. The issue of
toxic waste imports into the Philippines will continue to
shadow any trade pact, as long as global generation of
hazardous wastes continues to rise and the disparity
between developed and developing countries widen.
The Basel Ban Amendment offers a strong first line of
defense for the Philippines.
END
Magkaisa Junk JPEPA Coalition
c/o Initiatives for Dialogue and
Empowerment through Alternative Legal
Services, Inc. (IDEALS)
4th Floor, MB Building,
No. 6 Kalayaan Ave. Quezon City.
Telefax: 436-5470
E-mail: ideals05@yahoo.com
For more information, visit
Blog: http://junkjepapa.blogspot.com