Monday, April 4, 2011

The Review of the Japan-Philippines Economic Partnership Agreement (JPEPA)

Atty. Elpidio V. Peria
2 April 2011

The Review of the Japan-Philippines Economic Partnership Agreement (JPEPA) Amidst the Japanese Trifecta of Disasters

            Philippine trade officials were keen to remain optimistic on their  forecasts of the country's export performance for this year in the light of Japan's triple whammy of earthquake, tsunami and nuclear disasters which it is mightily struggling to recover in spite of fears within its business sector that this could be another “lost decade” for Japan.

            In a Manila Times news item 1 April 2011, DTI Undersecretary Adrian Cristobal Jr said that they are reviewing the country's export targets to assess whether they will have to make adjustments even as private sector leaders such as Sergio Ortiz-Luis Jr, the Philippine Exporters Confederation  Inc. President and Vice Chairman of the Export Development Council, a public-private body said that the target of attaining US$ 120 billion exports by the year 2016 under the Philippine Export Development Plan 2011-2013 would stand.

            This comes as a good time as any to review the Philippines' trade prospects with Japan given that 2011 is the year where a general review of the Japan-Philippines Economic Partnership Agreement (JPEPA) is supposed to take place as mandated by section 161 of the agreement itself, after which the next opportunity this can be done will be only after a period of five years, and subsequently, in similar five-year intervals. 

            If one is to judge the efforts of the DTI in raising the awareness of the benefits from this bilateral free trade agreement and from news reports, it appears that Filipino exporters are having difficulties in complying with the administrative and procedural requirements necessary to avail of the bilateral free trade benefits of lowered tariffs.

            Business World reported in 23 February 2011 that only 2% of shipments to Japan enjoyed  the lower duties provided by the Japan-Philippines Economic Partnership Agreement (JPEPA) versus 4% in 2009, based on National Statistics Office (NSO) data made available to the paper.

            As to the much-heralded expectation of nurses and caregivers going in droves to Japan to work, this it seems has not happened, as many were turned off by the difficult struggle to master the Japanese language.

            Should the Philippines take steps to scrap the agreement at this stage or should it just make some adjustments to deal with the problems of implementation of this first-ever bilateral free trade agreement entered into by the country ?

            This  decision should come from the people, all sorts of them, not only the exporters, but also the various sectors of the Philippine economy and society, environmentalists included.

            This general review should also be thorough, and comprehensive, and ask the hard question : has this bilateral agreement worked to the benefit of the country as a whole, not only limited to the usual export and investment figures.

            The DTI is giving itself sufficient time to conduct consultations nationwide and to update its data on the actual implementation as well as the impacts, both the good and the bad, of the bilateral treaty.

            While preparing for the review, DTI should keep its consultative processes open to the public, including even to the various NGO groups which opposed JPEPA the first time it was deliberated upon in the Philippine Senate for ratification.

            While it is no longer certainly applicable in this situation of the impending review of   JPEPA, DTI should not be guided by the Supreme Court ruling in 2008 (G.R.No. 170516, July 16, 2008) involving JPEPA in a case led by the Akbayan party-list and other key personalities where the Court ruled in favor on the legality of the denial of the right to public information by the Petitioners by then DTI Undersecretary Tomas Aquino as disclosing the details of the diplomatic negotiations of the treaty constitute a kind of violation of executive privilege of the same category which then NEDA Secretary Romulo Neri used to refuse to disclose what he actually told then President GMA on the NBN-ZTE deal.

            Without need to belabor the point at this stage, it is quite obvious the review of an effective bilateral trade treaty is of a different category than the one when it is still being negotiated, there should be no invocation of secrecy on matters that are of public concern, especially when the country as a whole needs to assess whether this bilateral trade agreement has been beneficial to all sectors.

            It's a pity the Supreme Court did not rule on the legality of the breadth of the scope of what the bilateral treaty contains, as said treaty was set to cut tariffs and customs duties  on almost all kinds of goods subject to trade with Japan,  including the question on whether entering into the bilateral agreements constituted a derogation of our commitments to the broader multilateral trade arena, the World Trade Organization and the further question on whether these bilateral obligations should have preference in our compliance with our multilateral obligations.

            These questions will remain hanging, until it is raised in a proper case, at a proper time.

            Absent any guidance from the Court, the Philippines will just have to continue performing its international obligations in good faith, at both the bilateral and multilateral arena, ensuring that the interests of the broadest sectors of the economy are protected and secured, at the same time.


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