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Senate ‘okays’ JPEPA but sets stiff conditions

Philippine Daily Inquirer 04/22/2008

Senate ‘okays’ JPEPA but sets stiff conditions

By Dona Pazzibugan

MANILA, Philippines — Saying her committee had done a “technical makeover” of the proposed treaty, Sen. Miriam Defensor-Santiago Monday formally recommended that the Senate give its “conditional concurrence” to the Japan-Philippines Economic Partnership Agreement (JPEPA).

Santiago, who chairs the Senate foreign relations committee, submitted a committee report recommending ratification of the JPEPA on the condition that the treaty complies with at least 15 Philippine constitutional provisions.

She said the ratification hinged on the condition that the JPEPA would observe the constitutional provisions on public health; protection of Filipino enterprises; ownership of public lands and use of natural resources; ownership of alienable public lands; ownership of private lands; reservation of certain areas of investment to Filipinos; give preference in the national economy and patrimony to Filipinos.

Regulation of foreign investments; operation of public utilities; preferential use of Filipino labor and materials; practice of professions; ownership of educational institutions; state regulation of transfer of technology; ownership of mass media; and ownership of advertising firms.

Considered a “new age” free-trade agreement, the JPEPA was signed by President Gloria Macapagal-Arroyo and then Japanese Prime Minister Junichiro Koizumi in Helsinki in September 2006.

But before it could be submitted to the Philippine Senate for ratification, it drew objections from environmentalists fearing that its tariff-reduction provisions might pave the way for the entry of hazardous wastes from Japan.

Beyond goods and services

Similar to agreements that Japan already has with Thailand, Malaysia and Singapore, the JPEPA goes beyond liberalization of trade in goods and services.

It includes measures to ensure the smooth movement of people, capital and information, and covers areas like investment and trade facilitation, as well as cooperation in science and technology, human resource development and small and medium enterprises and the environment.


If the JPEPA is ratified, the treaty will allow Filipino nurses and health care workers to work in Japan on the condition that they pass Japan’s examination requirements along with IT workers and other professionals.

Santiago said the committee report also included the condition that the Philippines would in the future ask for the nullification of three JPEPA provisions that give undue advantage to Japan.

These are the following:

• National treatment clause that gives Japanese the same rights accorded to Filipinos.

• The most-favored-nation clause that requires the Philippines to extend to Japan any preferential treatment it gives to other nations.

• The lifting of the performance requirement clause that would have imposed on Japanese investments in the country a certain level of domestic content, a preference for goods or services produced in the Philippines and the hiring of a minimum level of Filipino workforce.

Should the Senate accept the committee’s recommendations, it will be a first time in Senate history that the chamber will extend “conditional” concurrence to a treaty, according to Santiago.

Amending the treaty

“We are in effect amending the treaty,” she said at the resumption of Senate plenary session Monday. “This treaty has a lot of shortcomings ... We’re trying very hard to cure that,” she said.

In a statement, Santiago said the basic issue with the JPEPA was that the advantages were in favor of Japan but not necessarily for the Philippines.

She said the treaty negotiated by Philippine representatives “failed to include reservations that Japan has already conceded to Thailand, Malaysia and Indonesia.”

“We just want equal treatment,” she said.

Sixteen votes to ratify

Under Senate rules, the committee report must be approved by a majority or 11 members of the combined 20 members of the Senate foreign relations committee and of the committee on trade and industry headed by Sen. Manuel Roxas II.

Then the treaty requires a two-thirds vote or 16 votes by the 23-member Senate.

“It was a highly technical and exhausting makeover,” said Santiago, who is set to deliver her sponsorship speech on April 28.

Supplemental agreement

Under the terms of conditional concurrence, Foreign Secretary Alberto Romulo has to negotiate a “supplemental agreement” with the Japanese ambassador containing the conditions asked for by the Senate.

Santiago said the supplemental agreement might take the form of an exchange of notes.

If Japan refuses to agree to a supplemental agreement “there will be no 2008 JPEPA, but the two countries will likely negotiate a 2009 JPEPA or later,” she said.

Absolute necessity

Santiago said the conditions for concurrence laid out by the Senate were an “absolute necessity.” Otherwise, she said, the Supreme Court would declare the JPEPA unconstitutional.

However, “if the Supreme Court declares JPEPA to be unconstitutional, in international law, the Philippines would still be liable in damages to Japan for nonperformance of treaty obligations,” she said.

2nd largest trading partner

Japan is the Philippines’ second largest trading partner.

The total volume of trade was $14.7 billion in 2006, with the Philippines enjoying a surplus.

It is the largest source of tourists, with more than 400,000 Japanese visiting the Philippines every year.

Japan is also the biggest provider of official development assistance to the Philippines, accounting for two-thirds of all ODA annually.

There are an estimated 200,000 Filipinos working in Japan.

 source: PDI