RP, Japan agree PJEPA overhaul

Manila Bulletin | November 6, 2011

RP, Japan agree PJEPA overhaul

By BERNIE CAHILES-MAGKILAT

MANILA, Philippines — The Philippines and Japan are in agreement to undertake a comprehensive review of its bilateral free trade agreement, but are likely to clash in their objectives as the Philippines is set to go for more protection of its interest, like higher tariffs on some imports from Japan, in contrast to Japan’s call for further trade liberalization and other sectors covered under the agreement.

An industry source said these opposing views of the FTA partners have started to emerge following the recent meetings of the sub-committees on trade in goods, investments and rules of origin held in Japan.

Under the Philippines Japan Economic Partnership Agreement (PJEPA), both partners are slated to conduct a review of the agreement five years after it was signed or by December this year.

PJEPA, the country’s first bilateral trade agreement was entered into force in December 11, 2008. It covers trade in goods, services, investments, movement of natural persons, intellectual property, customs procedures, improvement of business environment, and government procurement. Under Article 161 of the PJEPA, a general review will be conducted in December 2011.

“Just like us, they (Japan) want a comprehensive review, but the purpose of the review is to further liberalize the sectors covered under the agreement,” the source said.

This would definitely clash with the Philippine position for a comprehensive review with the end in view of protecting the Philippine interest, which is deemed grossly disadvantaged under the agreement.

Earlier, a Philippine industry official said there is a need for a comprehensive review to correct some lopsided provisions.

For instance, on trade and goods, the Philippines appeared to be grossly disadvantaged because Japan has been exporting more to the Philippines than its imports.

On investments, the industry official pointed out that the promised increased Japanese investments did not also materialize.

"They did not invest as much as they have promised. The investments inflow from Japan was not enough," the industry leader said. He, however, did not provide exact figure.

The tariffs on motor vehicles and agricultural products are expected to take centerstage as Japan is expected to press for the lowering of tariffs for the mid-range motor vehicles.

The source said that the Philippines has been disadvantaged especially in terms of agricultural exports.

Aside from the economic issues, the Philippines would also like to incorporate in the PJEPA text the "side letter," which was crafted by the Senate before it ratified the treaty. The side letter concerns over the treatment of industrial wastes by Japanese firms.

There is also a clear issue on the provision on the movement of natural persons since the commitment to hire Filipino workers has been hampered by stringent Japanese standards and language barriers.

Founding president of Ang Nars, Dr. Leah Samaco-Paquiz said, “There has to be a way to provide assistance to Filipino nurses who do not pass Japan’s licensure exam. Some are forced to take nurse assistant positions whose allowance is below the estimated living costs in Japan.”

To date, nurse applicants in Japan are provided $400 training allowance and once they pass the Japanese board exam, they get an offer of employment of $900-$2,400 – the range of a typical entry level salary in hospitals or training facilities in Japan.

Earlier consultations conducted by the DTI with various stakeholders also called for a thorough review of the PJEPA, the country’s first and only bilateral FTA, because industries feel the country did not benefit from the FTA as it should.

Undersecretary for International Trade Adrian S. Cristobal Jr. said earlier said that issues and concrete proposals from those affected by the PJEPA.

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source: Manila Bulletin