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Tariffs, access on agenda for JPEPA renegotiation

BusinessWorld, Manila

Tariffs, access on agenda for JPEPA renegotiation

By Jessica Annie D. Hermosa, Sub-Editor

8 March 2012

The Philippines hopes to persuade Japan to lower tariffs further for over a thousand types of agricultural goods when the two meet to renegotiate a bilateral trade pact later this semester, a Trade official said.

But Manila in turn will have to hear out Tokyo’s requests, which a Japanese embassy official said would include greater market access for industrial exports and easier business processes.

"The spirt behind this review is progressive liberalization," Trade Undersecretary Adrian S. Cristobal, Jr. told BusinessWorld on Wednesday, referring to the annual exercise of studying the implementation of Japan-Philippines Economic Partnership Agreement (JPEPA), which has already been in force for more than three years.

The Philippines, said Mr. Cristobal, wants 1,379 agriculture tariff lines corresponding to marine products and other crops to enjoy entry in Japan, its top export market in 2011, at lower duties or at least via a tariff rate quota.

Otherwise, just 60% of Philippine farm and fishery exports are poised to enjoy zero duties under the current JPEPA commitments, according to data from local think tank Universal Access to Competitiveness and Trade.

Interest in securing improved access to the Japanese market comes as the East Asian economy is poised to swing to a 1.7% growth this year after a 0.9% contraction in 2011, an official from the Japanese embassy who declined to be named said.

Mr. Cristobal said both sides will just have to conclude meetings of subcommittees responsible for monitoring implementation of the trade pact’s various chapters before a broader group in charge of amending JPEPA can be gathered.

"We’re targeting [to hold a meeting] for the subcommittee on improvement of the business environment end of March. We hope to convene the joint committee after that within the first half. We’re arranging the schedules now," he said.

The embassy official said Philippine negotiators would be asked to consider improved market access for Japanese exports of industrial goods.

The official would not say which particular merchandise the Japanese side was concerned with. But Mr. Cristobal said their list would likely include automotives, smaller classes of which are still slapped with a 30% duty.

The subcommittee concerned with the business environment is among those "Japan attaches great importance to," the embassy official said, adding they were looking to raise concerns over the Philippines’ tax refund system this month.

Several manufacturers here who had received tax credit certificates for their value-added tax refunds have been unable to use these to offset other tax collections, the Japanese Chamber of Commerce and Industry has said.

Sought for comment, Mr. Cristobal said: "The government has addressed and continued to address those issues. We’re getting more progress reports from agencies now."

Power rates in economic zones as well as transport infrastructure will be the other concerns Japan will also raise at the subcommittee meeting, the embassy official also said.