With JPEPA, Philippines ushers in era of ‘unparalleled defeatist policymaking’

MANILA — As the Senate prepares to conduct hearings on the ratification of the Japan-Philippines Economic Partnership Agreement (JPEPA), an independent think-tank called for the junking of the free trade pact, saying it marks the start of an era of unparalleled defeatist policy-making.

According to non-government research organization IBON Foundation, the JPEPA deprives the Philippines of vital economic policy tools it would need in its future development. IBON research head Sonny Africa cited Annex 1 of the Agreement, in which the Philippines named only two items for exclusion from immediate or future tariff reduction commitments. He pointed out that trade barriers are essential if domestic industry and agriculture are to develop, since such protection would allow them to gradually build up their capacity to produce.

The JPEPA’s investment provisions require Japan to be given favorable treatment on a national or most-favored-nation basis. Such provisions essentially prevent the government from favoring Filipino entrepreneurs over Japanese investors. Explicit “performance requirement prohibitions” in the economic pact also hinder technology transfer by denying the state measures such as requiring Japanese manufacturers operating in the country to achieve a certain level of domestic content in their manufactures and to utilize goods and services available in their investment area in their operations.

Africa pointed out that the JPEPA is the country’s first full-fledged bilateral free trade agreement after colonialism, and as such is dangerous for setting precedents for liberalization that the country will have to concede in future trade negotiations. Its negotiating position in future trade agreements with other trading partners is compromised since it will have to grant to them what it granted to Japan, else it would be accused of unfair discrimination.

The end result of the JPEPA and other such free trade agreements will be to prevent any real Filipino agricultural and industrial development, he said, adding that such development is essential for overcoming mass poverty, achieving sustained and rapid economic growth, and attaining real economic independence.

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