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What the JPEPA proponents have not told the nation (part 1)

The multisectoral Fair Trade Alliance (FairTrade), a broad coalition of industry, agriculture, formal and informal labor, NGOs and youth pushing for trade and economic reforms, maintains its stance in the controversial Japan-Philippines Economic Partnership Agreement (JPEPA) that it will not favor the agreement’s ratification without renegotiation.

The government has been making a hard sell on JPEPA - threatening that a failure to ratify shall be catastrophic to the Philippines, while a ratification of the agreement shall be a big boost to the economy. FairTrade, on the other hand, bolsters its position urging the government to renegotiate the treaty because of the agreement’s inherent economic and constitutional questions. The Senate must correct these patently one-sided contents in JPEPA so that it will effectively benefit Philippine industries and the Filipino people.

In fact, what the JPEPA proponents have NOT told the Nation is that JPEPA is biased against the Philippines:

Fact No. 1: JPEPA is part of Japan’s East-Asia program

JPEPA is part of a grand East-Asia program of Japan. JPEPA and the other ‘economic partnership agreements’ (EPAs) being forged by Japan with the ASEAN member countries are part of Japan’s strategic program to consolidate economic leadership in the region and in the individual East Asian countries.

In fact, the EPA talks were launched by Japan, partly in response to the economic cooperation program that China concluded with the ASEAN in November 2001. The ASEAN-China Free Trade Agreement, organized in two stages (the first stage through a confidence-building ‘early harvest’ program), is envisaged to have a freer flow of trade in goods and services between China and ASEAN through the establishment of a zero-tariff regime for a market of 1.7 billion people by 2010.

Threatened by the expanding influence of China in the ASEAN region, Japan set up a framework to counteract China’s influence in the region. Seemingly reluctant at first in entering into BFTAs and regional trade agreements (RTAs), Japan entered the BFTA-RTA fray in East Asia so as not to be left out or isolated by China, politically and economically, in the region. The framework was laid out in the Strategy for Japanese FTA Policy, which was released by the Ministry of Foreign Affairs in October 2003 and which spelled out the geopolitical merits of establishing EPA in East Asia .

More...However, the way China is developing its economic partnership with ASEAN countries is different from Japan’s. That of ASEAN-China is being forged by stages - trade in goods first, then trade in services (which was signed in Cebu in 2007), and then trade in investment, which is still being negotiated. Japan, on the other hand, is forging economic partnerships or EPAs with the individual members of the ASEAN in a comprehensive way, since EPAs cover agreements on trade, investment, intellectual property rights, movement of natural persons and even non-trade issues such as government procurement. These EPAs are separate or distinct from the ASEAN-Japan Free Trade Agreement, a general RTA dealing with tariff reductions and which is slated for signing this November in the ASEAN Leaders’ Summit in Singapore.

In the case of the Philippines, the exploratory talks for an economic partnership between Japan and the Philippines began on December 4, 2002 when President Arroyo flew to Japan for a state visit. Subsequently, she signed Executive Order 213 creating the Philippine Coordinating Committee (PCC) to study the feasibility of a Japan-Philippine Economic Partnership. The primary role of the Committee is to come up with a Philippine draft framework, which will serve as the template for the negotiations with Japan. Three years after, President Arroyo and Prime Minister Koizumi signed the Japan Philippine Economic Partnership Agreement (JPEPA) on the sidelines of the ASEAN-European Meeting (ASEM) in Helsinki, Finland on September 10, 2006.

JPEPA is not the first EPA for Japan. Japan concluded economic partnership agreements with Mexico and Singapore. The Japan-Singapore EPA was signed in January 2002, while the Japan-Mexico EPA was concluded in September 2004. Subsequently, in 2002-2005, Japan held similar and virtually simultaneous EPA talks with Indonesia, Malaysia, Thailand and, yes, the Philippines.

Nonetheless, JPEPA is clearly a strategic part of the greater and broader East Asia economic program that Japan is trying to nurture or promote, the East Asian Community (EAC) project composed of the ASEAN plus the three East Asian dragons (South Korea, China and Japan), or the so-called ASEAN + 3. In the l970s and l980s, Japan was actively promoting the concept of an East Asia’s school of ‘flying geese’ soaring in an inverted V formation, with Japan, as the mother goose, leading a flock of newly-industrialized countries (Hong Kong, Singapore, South Korea and Taiwan), followed closely by another tier of ‘industrializing’ East Asian countries (Indonesia, Malaysia, Philippines and Thailand) and so on. The idea was to promote a regional division of labor featuring a hierarchical system of industrial subcontracting or development in the region where Japan is able to keep its cutting-edge technologies and industries at home while it farms out, in a descending order, its lower-level technologies and labor-intensive industries to the neighboring East Asian countries. Globalization, the rapid growth of China and the inroads of the NICs even in Japan’s cutting-edge industries have spurred a strategic re-thinking of the flying geese model. The EAC or the ASEAN + 3 formula and the accompanying EPAs and RTA with the ASEAN are clearly part of the strategic regional adjustments that Japan is making to maintain its leadership role in trade and investment in East Asia and assure her of a steady supply of needed energy and raw materials, not to mention regional markets.

The problem is: does the Philippines have a similar strategic program and development framework when it entered into a JPEPA negotiation with Japan?

 source: Fair Trade Alliance