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A critique of the Asian Peasant Coalition against JPEPA


A Critique of the Asian Peasant Coalition against JPEPA

26 November 2006

The Philippines and Japan government has signed the bilateral free trade agreement, officially called the Japan-Philippines Economic Partnership Agreement (JPEPA) on September 9, 2006 in Helsinki, Finland. This is the Philippines’ first bilateral free trade pact. Now, the Philippine Senate is mandated to decide whether this agreement will be recognizes as a treaty on the part of the Philippines.

The JPEPA follows to the letter the General Agreement on Tariffs and Trade (GATT) 1994, GATS and TRIPS-World Trade Organization (WTO) agreements. This bilateral agreement can also be seen in the light of the recent failure of the Doha rounds of WTO talks seeking to reduce tariffs of its member nations.

Meanwhile, Japan expects to expand its export and investment opportunities in the Philippines. The JPEPA also has political value for Japan, with its free trade ambitions assuming new urgency after China seen as an economic rival in Asia and the Association of Southeast Asian Nations (ASEAN) agreed to remove all trade barriers by 2010. Japan has been speeding up its campaign to liberalize trade in the Asian region through bilateral agreements and pursuing talks with the ASEAN.

Biases towards Japanese exports

The promised benefits to Philippine exports of the Japan-Philippines Economic Partnership Agreement (JPEPA) may not materialize because the pact is biased towards Japanese imports.

The Philippines is Japan’s largest source of bananas (58% of Japan’s total fruit imports), pineapple (7%), mango (1%), avocado (1%) and papaya (1%). This is equivalent to 79% of the total bananas exported by the Philippines; 98% of Philippine pineapples’ 61% of Philippine mangoes; and, 48% of Philippine papayas goes to Japan as of 2002. This is apart from semi-conductors (33% from 1998-2002) which is essentially the Philippines main export or re-export as the case may be) to Japan.

There is also a substantial Philippine export to Japan of marine products which stood at 3% of total Japanese imports of marine commodities. Philippine marine products exports to Japan are mostly shrimps and prawns.
As a potential market which the Philippines could have negotiated for Japan to open are tuna, cods and herrings. Japan is a heavy importer of such commodities. In 2000, 58% of Japan’s tuna supply is imported. The Philippine archipelago being nearer to the Japanese islands could exploit these potential export markets.

However, the Philippine negotiators failed to negotiate appropriate deals for tariff reduction in these sectors. For example, Japan refused to give immediate zero-tariffs to Philippine bananas and pegged the tariff rate at 10% to 20% (depending on the kind and form of the exported material). Japan offers a removal of tariffs 11 years after the agreement is in force and promising to lower tariffs every year until the 11th year. In contrast, the Philippines agreed to immediate elimination of tariffs on key Japanese products.

In addition, while the Philippines only exempted two products from tariff reduction namely rice and salt, Japan has exempted 239 products ranging from mushrooms and even wooden sandals. It is very evident that it is a very onerous deal and that developed countries like Japan are using bilateral trade agreements to go around the stalled DOHA rounds of the WTO, in fact these free trade deals are worse than the impositions by the WTO itself. Countries entering such deals must junk them immediately for they will regret it as early as they signed the deal.

Farmers hardest hit

The JPEPA is such an onerous deal in favor of Japan and would further sink the Philippines into being a beggar state, the Department of Trade and Industry (DTI) with the concurrence of the Department of Natural Resources (DENR) essentially made our whole country a dumpsite of Japanese waste. If this agreement is enforced, then it would mean massive displacement of farmers and other rural folks from their land in Ternate, Cavite (in Southern Tagalog region), as well as other areas in the Philippines because their lands would be converted into dumpsites. Even the seas may be made repositories of these wastes if we go by the JPEPA.

The Macapagal-Arroyo administration basically sold the Filipino to the Japanese for a pittance, 200 Filipino nurses a year to be allowed to work in Japan to be exact. Aside from that these nurses would not have ensured work in Japan because they still have to know the Japanese language and to pass the Japanese nursing examination.

Improving RP-Japan “partnership”

The Philippines, like many other underdeveloped nations, has a vital role in the prevailing global economic system that serves the interests of industrial countries such as Japan. Thus, Japan cultivates a “partnership” with the Philippines to ensure that it remains useful to Japanese economic agenda. Relations are preserved through trade and investment linkages and the so-called official development assistance (ODA).

In 2003, Japan exported to the Philippines 1.0419 trillion yen (US$9.47 billion) worth of goods, mainly machinery and electronics parts. The Philippines’ exports to Japan, on the other hand, totaled 815.5 billion yen ($7.41 billion), led by bananas, mangoes and other fruits and farm products. Practically all Japanese exports to the Philippines are industrial goods. Agricultural, forestry and fishery products occupy only 0.31% of the entire export figure from Japan.

Japan is also the Philippine’s biggest investor. In 2002, the Philippine Board of Investments (BOI) reported that investment from Japan amounted to over P17 million pesos, or 37% of the total foreign investment in the Philippines.

Of the 416 transnational corporations (TNCs) in the top 1,000 corporations in the Philippines, 142 are Japanese companies.

In December 2003, as a sweetener for the JPEPA negotiations, Arroyo was rewarded with the signing of four loan agreements with the Japan Bank for International Cooperation worth $435.3 million. The loan would be used for power projects in the country and the establishment of a social fund for the Autonomous Region in Muslim Mindanao. Of the amount, $208.5 million is earmarked for three power projects, among them the creation of the Wholesale Electricity Spot Market.

But according to IBON Foundation, the Philippines already has a trade deficit with Japan because it exports cheaper products and imports more expensive Japanese commodities, which has reached $441.79 million as of 2005. The JPEPA would most likely exacerbate the deficit as the country failed to negotiate key tariff reductions for strategic Philippine exports or open up potential Japanese markets for exports while readily giving in to immediate reduction or removal of tariffs on strategic Japanese sectors.

Farmers’ resistance

The Filipino farmers, led by the Kilusang Magbubukid ng Pilipinas (KMP), launched several protest actions at Japan embassy since October 2006. Raising awareness among the farmers and the general public is quite important in order to mobilize them against JPEPA.

During the 12th ASEAN Meeting on December 11-13, 2006 in Cebu City, Philippines, the Asian Peasant Coalition (APC) will register its biggest protest actions against JPEPA. Members of APC will join the Filipino farmers to mark its resistance against JPEPA.

The best thing to do is to junk the JPEPA, because the Philippine agreement blatantly shows that Filipinos will just be getting crumbs for all the trouble and hardship that this agreement would entail. We are asking the Philippine Senate and the House of Representatives to immediately trash this agreement. We urge the rural people to oppose JPEPA, launch campaign, education and action against the one-sided agreement. We call on our fellow farmers in Asia, especially in Japan, to help us campaign against this pact.

No to Liberalization of Philippine Agriculture!
Resist Imperialist Globalization!

 IBON Facts & Figures, Vol 27, No. 18, September 20, 2004
 IBON Features Vol X No. 47
 KMP Press Releases, November 2006
 Bayan Muna Briefing Paper on JPEPA, November 13, 2006
 IBON Media Release, November 15, 2006

Please contact APC Secretariat at
11-E Malamig Street, UP Village, Diliman
Quezon City, Philippines 1101
Telefax: +632-4355940
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