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Japan, RP agree on garments trade

Manila Bulletin | 18 July 2005

Japan, RP agree on garments trade


While the Philippines and Japan still remained locked on three issues to finalize their Economic Partnership Agreement (EPA), both parties have agreed in principle for a zero for zero arrangement on the trade of garments and textile.

Under this agreement, the Philippines has agreed to confer the same national treatment to exports from this sector from countries that Japan will forge a free trade area agreement in the future.

Garments and Textile Exports Board executive director Serafin Juliano explained that both parties are just finalizing the rules on origin (ROO) but the Philippines has already agreed to adopt the "fabric forward rule."

Juliano explained that under the "fabric forward rule," the Philippines will confer on prospective basis the same 0-for-zero duty treatment garment exports from other countries that have FTA with Japan.

Juliano noted that Japan is the country’s most promising market in terms of garment and textile export as well as a source of investments for this sector.

Last year, the country’s garment and textile exports reached $100 million or a year on year growth of between 3 to 5 percent in the past few years.

"With the dismantling of tariff, there will be an expansion of manufacturing activities from Japan to the Philippines," Juliano said.

Also, Japan’s political spat with China has discouraged Japanese firms from pursuing expansion programs there.

So far, the biggest Japanese garment firm here is Matsuoka as producer of Levis for the Japanese market.

The Japanese Textile Association has also expressed the same opinion the Philippines will benefit from the "fabric forward rule" once the Japan Philippines EPA is implemented.

The EPA negotiations are now focused on three remaining issues: Automotive, movement of natural persons and investments.

But Trade and Industry Senior Undersecretary Thomas G. Aquino said the September deadline to finish the negotiations is still attainable. The EPA is expected to be signed by both countries before the end of the year.

 source: Manila Bulletin