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What JPEPA (REALLY) has to offer:

A Civil Society Perspective


By: The Magkaisa Junk JPEPA Coalition
July 6, 2007

anchovies, and seaweed, which are the fishery


Background products commonly harvested by municipal fishers.
This could have been the most direct and significant
The Japan-Philippines Economic Partnership means of alleviating poverty among municipal
Agreement, popularly known as JPEPA, is a fishermen.
comprehensive bilateral investment and trade
agreement. Claim 2 – JPEPA eases market access for
Philippine products.
Last June 28, 2007, a two-page JPEPA ad ran through
major dailies, carrying the message of bright prospects The very complex and stringent Rules of Origin under
for the Philippines under the treaty, heralding “a new the JPEPA may actually make it more difficult for
age of growth" that would “ensure a future of prosperity" Philippine exports to enter Japan. An increase in
for the Philippines. This paid ad – which did not name exporters’ compliance costs may force them to
its source of funding - has been one of several attempts completely overhaul their production processes just to
to convince the Filipino people of the benefits of the suit the peculiarities and preferences of the Japanese
JPEPA. market.

The Magkaisa Junk JPEPA Coalition (MJJC), It must likewise be pointed out that Japan is known for
convened last year, is a broad multi-sectoral coalition its very stringent non-tariff barriers which have
composed of health care workers, labor groups, migrant effectively denied market access to Philippine products
rights advocates, farmers, fisherfolk, environmental and and services on various occasions. These non-tariff
trade advocates, members of academe, and other barriers will continue to exist even under the JPEPA.
concerned Filipino groups. It aims to counterbalance
the aggressive government promotion of what civil Claim 3 - JPEPA enhances the Philippines’
society sees as an undemocratic treaty which sacrifices attractiveness as an Investment haven.
the country’s long-term economic development for
minuscule and short-term gains. In a survey conducted just a few months ago, Japanese
investors identified the Philippines as the 2nd least-
This briefing paper, which has been prepared by the favored investment destination in Asia, citing
MJJC, aims to inform the public about the truth behind macroeconomic instability, corruption, contracting and
the government’s claims on the benefits of the JPEPA. regulatory uncertainty, poor infrastructure, high power
costs, high costs of doing business, and peace and
Claim 1- JPEPA will boost Philippine agricultural order concerns as their reasons for choosing to stay
exports. away from the Philippines. Investment liberalization
under the JPEPA cannot possibly solve our investment
The Philippines already enjoys a positive trade problems for as long as the government refuses to
balance with Japan as far as agricultural exports address the root causes of the country's poor
are concerned even without the JPEPA. As pointed investment climate.
out by the Tambuyog Development Center, the tariff
for Philippine tuna is already at a low 3.5%, while Claim 4 – JPEPA will open up Japan’s labor market
that for shrimp is at 0 %. Also, not all Filipino exports to Filipino health care workers.
get a boost from JPEPA. Bananas, our top export, will
gain tariff-free entry only in 10 years’ time. Efforts by the Japanese government are underway to
limit the entry of Filipino health care professionals to not
Japan has likewise refused to lift its quotas on regular- more than 400 nurses and 600 caregivers for the first 2
sized Philippine pineapples. It also denies market years of the JPEPA. This quota being imposed by the
access to Filipino exports of sardines, mackerel, Japanese government is not provided for in the JPEPA
and effectively undermines whatever access the Claim 6 – The “dynamic” economic gains of the
Philippines is supposed to have gained under the JPEPA will result in “enormous” social benefits and
agreement. Besides the quota, Filipino nurses would ultimately translate into poverty alleviation.
also be required to master written and spoken
Niponggo to pass board examination that routinely is The JPEPA adheres to a development model that
failed by more than half of the Japanese nationals who assumes growth in the export sector will trickle-down to
take it. the rest of the economy.

There is likewise no guarantee that our migrant workers The Philippine Institute of Development Studies (PIDS)
in Japan will be treated fairly, given decent work, and admits its JPEPA studies focused on big business,
protected against exploitation and abuse. In fact, even export industries, and cash crops and that very little
the Philippine Nurses Association (PNA) itself is greatly attention was paid to micro, small and medium-
critical of the JPEPA because it suspects the Filipino enterprises – sectors which constitute almost 97% of all
nurses and caregivers will face a lot of discrimination businesses in the country.
and will be treated as second-class professionals in
Japan. Filipinos may even end up working into the It must likewise be pointed out that the social
Japanese sex industry or entertainment joints for ramifications of a migration-led economic policy have
lack of better opportunities. yet to be addressed by the government. There is a
distinct possibility that all the benefits of OFW
Claim 5 – Enough safeguards are in place to remittances may be severely outweighed by the social
prevent toxic waste trade under the JPEPA. repercussions of separated families.

By eliminating tariffs on toxic wastes and other globally Claim 7 – The JPEPA will create “near-limitless
banned or controlled substances or chemicals, JPEPA opportunities for economic growth” and a “future
creates the market environment conducive for of prosperity.”
waste traders and investors to engage in toxic
trade, thereby undermining laws such as the Toxic Beyond the overly rosy projections, the JPEPA raises
Substances and Hazardous and Nuclear Wastes nagging questions that we must collectively address as
Control Act (R.A. No. 6969) and the Basel Convention. a nation and as a people. What is our development plan
for the Philippines?
Also, Article 4 of the JPEPA states that the Philippines
shall examine the possibility of amending or repealing As articulated by the Fair Trade Alliance, after over 3
laws and regulations – including the previously decades of partnership with Japan, the Philippines
mentioned environmental safeguards - if they restrict remains a junior economic partner of Japan. While
trade under the JPEPA. Japan exports higher-value products such as cars and
appliances to us, the Philippines merely exports lower-
It is claimed that agreements similar to JPEPA that value products such as semiconductor devices, wire
Japan contracted with Singapore and Malaysia also harnesses, banana, and tuna. The JPEPA will not
contained provisions relating to toxic waste, and yet contribute to the country’s industrialization but will
nothing bad has happened to either one. merely reinforce this existing pattern.

The situation of the Philippines is unlike that of Moreover, beyond the toxic waste issue, the other
Malaysia and Singapore. Malaysia has ratified the environmental repercussions of increased trade and
Basel Ban Amendment, which effectively blocks the extractive industries under the JPEPA need to be
entry of Japan's toxic waste into Malaysian territory. studied closely.
The Philippines, on the other hand, has the Basel Ban
Amendment untouched. Singapore is a port city, and Conclusion
most goods or wastes merely pass through it.
Moreover, both countries' ports have better customs It is highly unlikely that JPEPA will be the harbinger and
monitoring, compared to the Philippines’ notoriously engine of prosperity, growth, and poverty alleviation
porous borders. that it is being made out to be.
With the negotiation of the JPEPA and all the other 5. Improve the research, negotiating capability, and
FTAs that are lined up after it, the Philippines should inter-agency coordination of the government to in
not rush blindly and haphazardly into these international trade negotiations.
agreements. While we must take advantage of
opportunities that arise, we must at the same time 6. Define a national development agenda that
proceed cautiously and judiciously, carefully assessing harmonizes trade and economic policy with long-
whether such agreements will contribute to the long- term development, social, industrial, environmental,
term economic and social development of the and labor objectives. It is high time that we asked
Philippines or sacrifice such long-term development in ourselves where we are going as a nation and as a
exchange for short-term gains. people. Are we content with being importers of another
country’s products and wastes, and exporters of Filipino
In the government's irrational exuberance with the labor?
JPEPA and other FTAs, it is forgetting the truly
essential things that make an economy great— 7. Ratify the Basel Ban Amendment. The issue of
investments in domestic industry, agriculture, and toxic waste imports into the Philippines will continue to
labor productivity, good governance, strong shadow any trade pact, as long as global generation of
national institutions and a pride in its people. hazardous wastes continues to rise and the disparity
between developed and developing countries widen.
The Basel Ban Amendment offers a strong first line of
Recommendations defense for the Philippines.

1. Do Not Ratify JPEPA.


END
2. Address the fundamentals of national economic
development. Investment and trade liberalization
cannot improve the country’s competitiveness for as Magkaisa Junk JPEPA Coalition
long as the government fails to address the root causes c/o Initiatives for Dialogue and
of economic malaise: lack of public and private Empowerment through Alternative Legal
investment and capital formation, macroeconomic Services, Inc. (IDEALS)
instability, massive corruption, poor infrastructure, high 4th Floor, MB Building,
power costs, high costs of doing business and No. 6 Kalayaan Ave. Quezon City.
contracting, regulatory uncertainty, and poor investment Telefax: 436-5470
in human development and labor productivity.. E-mail: ideals05@yahoo.com

3. Address broader concerns against the JPEPA


through robust and transparent hearings in the For more information, visit
Senate. Concerns from farmers, fisher folk, indigenous Blog: http://junkjepapa.blogspot.com
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.