Jpepa Briefing Paper For The Bbc

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 regularsized 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 leastfavored 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.

Claim 6 – The “dynamic” economic gains of the JPEPA will result in “enormous” social benefits and ultimately translate into poverty alleviation.

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.

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 mediumenterprises – sectors which constitute almost 97% of all businesses in the country.

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.

The JPEPA adheres to a development model that assumes growth in the export sector will trickle-down to the rest of the economy.

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 lowervalue 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 longterm 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

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 longterm 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.

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.

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: [email protected] For more information, visit Blog: http://junkjepapa.blogspot.com