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Groups say the govt to lose P16.9B in revenues

Today (Manila)

Wednesday, January 26, 2005

Groups say the govt to lose P16.9B in revenues

and Rhodina Villanueva
TODAY Reporters

Two members of the House of Representatives on Tuesday pushed for a congressional inquiry into the bilateral trade and investments agreements entered into by the government, which did not go through proper public consultations despite their far-reaching impact on the economy as well as the provisions of the Constitution.

In House Resolution 551, Liberal Party Rep. Lorenzo Tañada III of Quezon and party-list Rep. Mario Aguja of Akbayan said the investigation should be able to unravel and details of the numerous trade agreements signed by the government as well as their implications to the local economy.

Tañada cited the Japan-Philippine Economic Partnership Agreement (JPEPA), which was packaged as a mere executive agreement but takes the form of a bilateral trade and investment agreement that requires Senate ratification.

He said the country had entered into at least 47 bilateral investments and trade agreements with various countries. However, only 41 have been reported by the Department of Foreign Affairs.

Meanwhile, nongovernment organizations said that initial government projection shows that the government stands to lose P16.9 billion in foregone revenues starting this year if the provision calling for the tariff elimination of select commodities under JPEPA would be approved.

The Stop the New Round! Coalition, an alliance of farmers, fisherfolk, rural women, workers and private sector representatives opposed to bilateral free trade agreements, said the amount consists of P15.37 billion in potential custom’s duties and P1.54 billion in value-added tax payments.

Arsenio Tanchuling, executive director of the Tambuyog Development Center, a member of the coalition, said it was “obvious” from the results of the fifth round of the negotiations for JPEPA in November that the Philippine negotiators have agreed with their Japanese counterparts for an immediate tariff removal of most industrial imports from Japan in exchange for lower tariffs on the Philippines’ agriculture and fishery exports to Japan.

“The immediate tariff removal on industrial imports from Japan would lead to job losses in the less-competitive local industrial sector, especially in the automotive and steel industries,” Tanchuling said in a news conference in Quezon City.

“There is a common analysis that bilateral investment and trade agreements are of World Trade Organization (WTO) Plus character as the level of commitment that a usually developing country commits vis-a-vis its partner country, often a developed one, is over and above what the WTO asks for,” Tañada said.

He said the latest agreements of this sort that the government is about to enter include the JPEPA and that with China and the United States.

“Information with regard JPEPA has been scant as negotiators are down without public consultation,” Tañada said.

“While we in [the House] can take up this matter for its effect on the economy and the Constitution and in the spirit of transparency and the public’s right to information, the fact that JPEPA takes the form of a bilateral treaty should alert the Senate about jurisdictional issues.”

He stressed that Malacañan cannot just sign the agreement for and on behalf of the people without violating the Constitution. “The Senate should take cognizance of these matters as their nature take the form of treaties and should therefore be subject to the Senate’s scrutiny, public consultation, ratified or rejected based on their impact on the economy, our people’s lives and the Constitution,” Tañada said.

Tañada said the administration is rushing the agreement’s approval by the first quarter of the year.

He said that the agreement violates at least five important provisions of the Charter, which cover national economy and patrimony, and regulate foreign investments in the country.

“The economic-partnership agreement with Japan will override not only our laws governing foreign investments but also the Constitution as it will virtually denationalize the control of land, natural resources and public services, such as water, energy, health, education and other virtual public services,” he said.

Tañada called on the House Special Committee on Globalization to inquire into the matter. He also urged the committee to zero in on the upcoming JPEPA, as well as review past bilateral agreements.

Tanchuling also contradicted the government projections of 1-percent to 3-percent increase in the gross domestic product.

“There would be no significant increase in Japanese investments in the local industrial sector because our domestic market is stunted and shows less potential for growth compared to Thailand and Indonesia. In the first place, this is the reason why Japan has already invested much more capital in these countries than in the Philippines. Japanese investors will invest in countries where there is market potential,” Tanchuling explained.

Tambuyog was also skeptical about the effect of Japanese concessions in agriculture and fisheries. “There is no assurance that Japanese tariff concessions in agriculture and fisheries would lead to more jobs in this sector and absorb the losses in the industrial sector. Since the 1980s, the Japanese market has only benefited the exporting local-agribusiness sector, while millions of small farmers and fishers have remained poor because they do not have the capacity to engage in foreign trade.”

Tanchuling said that while there are potential benefits from greater market access for agriculture, the government should lend support to small producers in terms of production and postharvest technologies and facilities that would enhance their efficiency and competitiveness.

 source: ABS-CBN