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RP, Japan ironing out kinks in proposed deal

Manila Standard Today

RP, Japan ironing out kinks in proposed deal

By Ferdinand Fabella

9 January 2006

THE Philippines and Japan are working double time to be able to firm up within this year their long-delayed economic pact aimed at easing trade restrictions between the two nations.

Foreign Affairs Secretary Alberto Romulo said the Japan-Philippine Economic Partnership Agreement (JPEPA) will be especially beneficial to the Philippines since it will open up Japanese labor market to Filipino skilled workers and healthcare professionals.

“We are still in the process of discussion and coordination. Our target (for the signing) is within this year,” Romulo said, adding that the Department of Trade and Industry, the principal government agency in the trade pact, has made significant strides in the negotiations with their Japanese counterparts.

The enactment of JPEPA, the Philippines’ first bilateral free trade agreement and Japan’s third, coincides with the 50th anniversary celebration of the normalization of diplomatic ties between the two countries. President Gloria Macapagal Arroyo had issued a directive proclaiming 2006 as RP-Japan Friendship Year.

Japanese Ambassador to the Philippines Ryuichiro Yamazaki said government-to-government discussions on eliminating or reducing the tariff on automobiles are still ongoing.

As of November, Japanese and local car manufacturers were discussing the details of the 1-3-3-3 tariff phasedown plan.

Under the plan, the Philippines would reduce the tariffs on completely built-up units with engine sizes of three liters and below from the current level of 30 percent to 29 percent by this year, when the JPEPA shall have come into force; then to 26 percent by 2007; further down to 23 percent by 2008, and 20 percent by 2009. Tariffs would be eliminated in 2010.

Discussions for JPEPA officially began in February 2004, two years after President Arroyo proposed the bilateral trade pact during her state visit to Japan.

After a series of negotiations, Mrs. Arroyo and Japanese Prime Minister Junichiro Koizumi announced on Nov. 29, 2004 their agreement on major elements of JPEPA, paving the way for the conclusion of the agreement.

JPEPA details various agreements on trade, investments, human resources, science and technology, energy, and small and medium enterprises.

Among the issues being discussed under the deal is the lowering of tariffs on forestry, fishery and agricultural products and liberalizing investment in the automobile and electronics industries in the Philippines.

“JPEPA will improve the way we do business as economic partners,” Romulo said.

Yamazaki, on the other hand, was tight-lipped on the free entry of Filipino medical professionals such as nurses and midwives in Japan.

The Department of Labor and Employment, the agency involved in JPEPA discussions on the possible hiring of Filipino nurses and midwives in Japan, said Tokyo wants to put a quota on the number of Filipino medical workers who may work in their country, but Manila wants market forces to determine that number.