Fact No. Two: JPEPA is more than a trade agreement
JPEPA is by far the most comprehensive bilateral economic agreement that the country has entered into since the RP-US Parity Agreement of 1946. Composed of 16 agreements, JPEPA is a combination of a bilateral investment treaty (BIT) and a bilateral free trade agreement (BFTA) on goods (manufacturing, agriculture and fisheries) and services. It also has provisions on intellectual property rights (IPRs), rules of origin (ROOs), movement of natural persons, mutual recognition and bilateral cooperation. Furthermore, it covers the so-called Singapore issues: trade facilitation, government procurement and competition policy.
Yes, JPEPA is unlike other bilateral and regional agreements that the Philippines concluded from 1946 to 2006. Its investments chapter has a mechanism that prevents future legislation and prohibits the implementation of laws that are not specifically listed or clearly described in the Reservations list. The Philippines made a very short list of existing measures under this Reservations provision, forgetting that there are so many legal restrictions that should have been included. It also did not make a reservation of future measures beyond some existing laws, thus denying the legislature the right to enact future measures that were not fully provided for, contrary to the Constitution’s allocation of powers and its pro-active directive to ensure a level playing field for Filipinos, including granting protection and preferences when necessary. Article 93 also prohibits the Philippines from imposing performance requirements on Japanese investments, a radical surrender of sovereign legislative and administrative powers. This is the first time that this right will be surrendered. JPEPA, in this respect, qualifies to be called a super-BIT.
It is also an agreement that is far more radical than the WTO. It excludes what were never contemplated in the WTO, such as - (a) the bilateral review of laws with a view to their amendment; (b) an investments chapter with ‘hard’ obligations on the Philippines to respect heightened investor rights; (c) obligating negotiations on liberalizing the entry of Japanese investors in government procurement; (d) obligating cooperative measures on competition policy; (e) a special mechanism for hearing the complaints of Japanese businessmen; and (f) added burdens on the bureaucracy, which is tasked to administer and advance the goals of the JPEPA. It is thus a “WTO plus-plus” agreement.
JPEPA is structured in such a way that most of its provisions grant significant rights to Japanese investors, and rights to the Japanese government to engage us in discussions regarding our own laws, without an assurance of equivalent advantage to the Philippines. Of the 16 chapters of JPEPA, the Philippines could have gained advantages in four: (a) movement of natural persons, (b) access by agricultural exporters to the Japanese market in the trade in goods chapter; and (c) liberalization of access to the service sectors by individuals, and (d) cooperation. So far, it appears that not much have been accomplished for the Philippines in this regard. On the other hand, in the other chapters, especially the chapters on investment, government procurement and competition policy, Japan achieved heightened rights for its businessmen while pushing the Philippines closer to the Japanese WTO plus-plus agenda.
JPEPA thus covers trade and non-trade measures, which is tantamount to the inclusion of all the measures of the government with respect to the entire economy.
Given its comprehensive and intrusive character, therefore, JPEPA is an encroachment on the sovereign right of our country to determine its own trade, investment and other development priorities, especially in areas covered by the investment agreement and other so-called Singapore issues. In short, we are surrendering our own policy space and economic sovereignty, similar to what happened to use in the l970s and l980s, when the IMF-World Bank duo practically drew up the country’s Medium-Term and annual development plans and programs. If JPEPA is ratified, the power of future Administrations and legislatures to initiate such development plans and programs shall be subject to limitations imposed by JPEPA.