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Aurea Calica
Philippine Star

Sen. Manuel Roxas II is seeking to reform the way the government negotiates international trade agreements to avoid the problems experienced in relation to the Japan-Philippine Economic Partnership Agreement (JPEPA).

“Let’s be frank about it. I’m not too happy with the results of JPEPA. I feel we could have gotten more. We could have negotiated better. But I wasn’t part of the negotiations, and we will never know,” he said over the weekend.

“We got a marginally advantageous treaty, but its non-passage means risk to our industries and our workers. Even if we want a perfect agreement, we will really be left behind if we do not ratify the treaty that is now before us. These dilemmas shouldn’t have existed in the first place,” Roxas stressed.

Roxas, co-chairman of the joint committee on JPEPA, has  filed Senate Bill No. 252 to create the Philippine Trade Representative Office to improve government negotiations on international agreements.

“Our future trade deals must also be considered in light of the recent collapse of the Doha Round in the WTO (World Trade Organization) talks. We will see an increased emphasis on regional and bilateral trade pacts. We should beef up our negotiating prowess and our people should be consulted more closely about these,” Roxas said.

“JPEPA was a lesson for all of us, and we know that the structure of our trade agencies at present make them ill-equipped to handle these negotiations on top of their present mandates. The problems we need to fix are from as simple as getting the facts accurate — unlike what happened during the Senate hearings to as fundamental as ensuring that all trade agreements are in favor of our people,” he noted.

The proposed PTRO will be headed by a  Philippine trade representative holding a fixed six-year term. The official’s task would be to coordinate and hold consultations with all stakeholders to determine the country’s international trade policy, and to represent the country in all trade agreements.

An inter-agency committee will also be created to assist the PTRO. The committee will be headed by the Philippine trade representative and composed of officials  of the Department of Trade and Industry, National Economic Development Authority, Department of Agriculture and other agencies.

JPEPA is now being deliberated at the Senate plenary. Sen. Miriam Defensor-Santiago, chairperson of the foreign relations committee, and Roxas have recommended conditional concurrence to the agreement citing provisions that are violative of the Constitution.

A side agreement will be signed with Japan to correct the constitutional infirmities, Santiago said.

Ma. Elisa P. Osorio
Philippine Star

Multi-sectoral groups are urging the government to come up with a more coherent trade policy in negotiations at the World Trade Organization (WTO) and other trade agreements.

Rice Watch and Action Network (R1), fisheries group Tambuyog and the Alliance of Progressive Labor, said the breakdown of talks on the WTO’s Doha Round will have a negative effect on the local economy.

R1 said the Doha Round of negotiations in Geneva failed over disagreements on the Special Safeguard Mechanism (SSM). SSM allows developing countries to increase their agricultural tariff rates to protect local industries against massive importation.

Jessica Reyes-Cantos, R1 lead convenor, said the government’s chief negotiator did not assist Philippine agriculture negotiators in Geneva because a public statement was issued favoring the signing of the deal.

Cantos said that was not proper especially since the safety nets in agriculture and industries were not discussed yet.

“How do you expect our counterparts in the WTO and other trade negotiations to seriously consider our bargaining positions when some of our officials are willing to take any deal for our supposed offensive interests, even at the expense of more sustainable local development?” she said.

The groups earlier urged the government to reject the WTO deal due to the disappointing offers on agriculture, fisheries and industry as well as the services sectors, as these were laid down during the week of negotiations on July 21-25, 2008.

“The fuel and food crises should serve as a wake-up call for the government. High prices of rice in the world market proved to be a bane for our country when we chose to open our economy to the world’s liberalized trade regime,” said Cantos.

R1 said the government must develop the agriculture, fisheries and industry sectors and provide the necessary production support to allow poor and marginalized people in these sectors, and stay afloat under a just and fair trade regime.

“Our government’s trade negotiations need coherence as the last WTO mini-ministerial meeting showed that each major sector was left to fend for each own while no one is really looking at the whole picture,” Cantos said.

Elaine Ruzul S. Ramos
Manila Standard

The European Commission has criticized the Philippines for the lack of progress in a proposed bilateral partnership and cooperation agreement, saying the deal would have benefited the nearly one million Filipinos working and living in Europe.

Ambassador Alistair MacDonald of the European Commission said in a briefing yesterday the Philippines was not taking advantage of Europe’s potential as a trading partner and source of potential investments.

“The Philippines just does not pay that much attention to Europe. The Philippines has a relatively limited interest to partner and cooperate with Europe,” added MacDonald.

He said the commission had presented the draft of the agreement to Asean countries 18 months ago but the Philippines to date had not commented on it.

MacDonald said Manila had reiterated its commitment to forging a partnership with the European Union.

“The words are there but we need concrete actions,” he added.

He said the commission was working on finalizing agreements with Indonesia, Thailand and Singapore and had made headway with Vietnam.

The commission wants to have a bilateral cooperation agreement with Asean countries first before forging a free trade agreement with ther region as a bloc.

The Foreign Affairs Department is the lead counterpart agency of the European Commission in the initiative.

MacDonald suggested that the Philippines speed up the series of inter-agency consultations on the proposed bilateral agreement to catch up with other countries in the region.

He said he was not urging the Philippines do things hastily, citing the importance of the agreements that needed careful deliberation.

“Worst-case scenario is that we make progress on the free trade agreement with Asean and the Philippines is not able to take part of it because we have not forged an agreement at the bilateral level,” added MacDonald.

He said the proposed partnership and cooperation agreement the commission was forging on a bilateral level would lead to the modernization of the agreement between the commission and Asean that was forged way back in the ’80s.

Ma. Elisa P. Osorio
Philippine Star

The Philippine Chamber of Commerce and Industry, the largest business group in the country, is urging the Department of Trade and Industry (DTI) to institutionalize reforms with the way it deals in international trade.

“Certainly, we do not want a repeat of what happened to JPEPA (Japan-Philippines Economic Partnership Agreement). Our negotiators must be knowledgeable enough on what they entered into so that when the grilling period comes, they can easily defend the agreement,” the government’s special envoy for international trade relations and PCCI chairman emeritus Donald G. Dee said.

The JPEPA is still pending before the Senate as the lawmakers have expressed reservations on the treaty apparently due to some flaws in its provisions.

As such, Dee has proposed the creation of a trade representative office, but the DTI is not too receptive to the idea.

Dee cited the need for the government to strengthen the international trade policies and systematize its negotiating arm so as to meet the challenges of trade liberalization, thereby becoming at par with other exporting countries.

“While the DTI may not want to support the idea of creating the trade representative office, it is still necessary that the government decides who will coordinate and call the shots in the negotiations,” Dee explained.

In spite of this, the DTI has agreed to institutionalize reforms that would effectively put in place the smooth conduct of international trade negotiations.

Trade Secretary Peter Favila earlier announced his plan to strengthen the Bureau of International Trade Relations under the DTIs rationalization plan.

Dee said he is hopeful the strengthening of the BITR will result in greater transparency in the formulation of government trade policies and negotiating strategies.

Meanwhile, some stakeholders pushed for the DTI.

Earlier, Trade Undersecretary Thomas Aquino admitted that while the DTI-BITR finds it difficult to attend to the demand of the negotiations, it does not submit to the proposed creation of a new agency.

“The DTI has chosen to pursue the expansion of the BITR to address the gap in the negotiations and in crafting the needed positions for various trade agreements,” Aquino said.

Lawrence Agcaoili
Manila Standard

The Japan-Philippines Economic Partnership Agreement is expected to cost the national coffers as much as P4.75 billion in the first year of its implementation, according to a study conducted by the Department of Finance.

The study, however, said the increased trade with the country’s second-largest bilateral partner would compensate for the foregone revenues.

Finance Undersecretary Roberto Tan told reporters that the revenue impact of the agreement, signed by President Gloria Macapagal Arroyo and Japan Prime Minister Junichiro Koizumi in September 2006, would result in foregone revenues of between P3.2 billion and P4.75 billion in the first year of its implementation.

The foregone revenues would arise from lower duties collected by the Bureau of Customs from imports from Japan, the Philippines’ second- largest trading partner after the United States, the study said.

It said the Philippines would have to forego duties ranging from P2.86 billion to P4.24 billion as well as value-added tax ranging from P343 million to P509 million.

Tan said the increased volume of trade between Japan and the Philippines due to lower tariffs would help the country post a higher gross domestic product growth.

He said a faster economic expansion would result in more employment for Filipinos and higher tax collections by the Bureau of Internal Revenue.

“There are lots of benefits which will lead to higher tax collections at the end of the day,” he said.

The agreement, which will eliminate tariffs on almost all industrial goods within 10 years from its effectivity in 2007, has yet to be implemented since it still needs ratification from the Senate.

Solita Collas-Monsod
Inquirer

MANILA, Philippines — Will signing the Japan-Philippines Economic Partnership Agreement (JPEPA) give Japan carte blanche to export its toxic and other hazardous wastes to the Philippines? No. The fact that with JPEPA the Philippines imposes zero tariffs on wastes from Japan (and vice versa) is immaterial, because Philippine laws and regulations — in particular Republic Act 6969 (“An Act to Control Toxic Substances and Hazardous and Nuclear Wastes, Providing Penalties for Violations thereof…” — prohibits such importation, and so does the Basel Convention, or the Convention on the Transboundary Movements of Hazardous Wastes and their Disposal.

But to dispel any lingering doubts, there was an Exchange of Notes between Foreign Secretary Alberto G. Romulo and Japan Foreign Minister Taro Aso that said precisely that. Last May 22, Romulo sent Aso a note to confirm the understanding that “Japan would not be exporting toxic wastes to the Philippines, as defined under the laws of the Philippines and Japan, in accordance with the Basel Convention … and that provisions related to this topic in the Japan-Philippines Economic Partnership Agreement do not prevent the adoption or enforcement of such measures under existing and future national laws, rules and regulations of the Philippines and Japan. It would be opportune receiving confirmation from your side to put to rest the concerns raised on this subject in the JPEPA….”

To which Aso replied (on May 27): “I am pleased to confirm the statement and commitment of Prime Minister Shinzo Abe that Japan would not be exporting toxic wastes to the Philippines, as defined and prohibited under the laws of the Philippines and Japan, in accordance with the Basel Convention, and the understanding that provisions related to this topic in the Japan-Philippines Economic Partnership Agreement do not prevent the adoption or enforcement of such measures under existing and future national laws, rules and regulations of the Philippines and Japan.”

How much clearer can one get?

And apparently, such an Exchange of Notes, as quoted in part above, constitutes “agreement” under international law — it is deemed to be a supplemental agreement between the parties regarding their interpretation of the JPEPA and the application of its provisions vis-à-vis the Basel Convention and present and future environmental laws and regulations. Which can be taken to mean, one supposes, that there is no impediment to having other supplemental agreements regarding interpretations of other JPEPA provisions.

It is to be hoped that the foregoing will stop once and for all the use of an environmental threat to derail the JPEPA, or at least reassure those who have succumbed to the scare tactics.

But there are always going to be the hard-core doubting Thomases. In their case, maybe a concrete example — recounted by our Ambassador to Japan Dominador “Jun” Siazon Jr. — of how Japan takes its obligations in this regard seriously may do the trick, although, as they say, no one is more difficult to awaken than the person who is not really sleeping. Why Ambassador Siazon? Because the incident about to be narrated happened during his watch as secretary of foreign affairs (under Joseph Estrada).

The reader may recall that sometime in August 1999, 92 40-footer container vans arrived at the Manila Container Port aboard MV Ming Champion. The contents of the vans, weighing over 2,000 tons, were shipped by Nisso Corp. (based in Tochigi, Japan) and consigned to Shinsei Enterprises, Intramuros, Manila, with Macondray Carrier as cargo agent. Their contents were declared as waste papers and plastics for recycling.

But upon examination by the Environmental Management Bureau of the Department of Environment and Natural Resources, the vans were found to contain instead substantial amounts of discarded intravenous syringes (used in blood-letting and dextrose), used adult diapers, sanitary napkins, hospital apparatus, garments, bandages, electronic equipment and PVC plastics. This is in contravention of both the Basel Convention and RA 6969.

Whereupon we threw the book at Japan, figuratively speaking, albeit after a four-month delay. Siazon, as foreign secretary, sent a formal notification to the Japanese ambassador to the Philippines, requesting Japan to take the necessary steps to ensure that the waste materials be taken back to Japan, also as specified by the Basel Convention. And Environment and Natural Resources Secretary Antonio Cerilles also wrote the secretariat of the Basel Convention in Geneva and the Japanese government, requesting remedial action from them.

The long and short of it is that Japan had the container vans and their waste contents shipped back to Japan. But that is not the end of it. After investigation by police from the Prefectures of Nagano and Tochigi, criminal charges were brought against Nisso Corp., its chair (Katsuhiro Mizuguchi) and president (Hiromi Itoh) for violation of Japan’s (emphasis mine) waste processing and cleaning law, foreign exchange and foreign trade law, and customs law.

Apparently Mizuguchi fled Japan, but was extradited from Cambodia, and arrested upon his arrival in Tokyo in September 2000. He was sentenced to four years in jail, as was Itoh, who also had to pay a 5-million yen fine. In addition, Nisso Corp. was fined 15 million yen.

Does that sound like Japan is taking us lightly? But, alas, I haven’t a clue as to what happened to the local importer and the cargo agent.

Manila Times

Although pitted against legal luminaries from the anti-JPEPA groups, the government panel succeeded in explaining constitutional issues raised against the Japan-Philippines Economic Partnership Agreement (JPEPA) in yesterday’s joint hearing conducted by the Senate committees on foreign relations and on trade and commerce.

Ambassador Manuel A.J. Teehankee, Philippine Permanent Representative to the World Trade Organization who was designated spokesperson of the JPEPA legal panel, was allayed fears that the treaty would give the Japanese nationals the same rights as Filipinos while doing business in the Philippines.

Teehankee explained that the national treatment provision in the JPEPA does not give parity rights to Japanese businessmen, citing specific provisions in the treaty to prove his point.

In a fact sheet, the Department of Trade and Industry said that the national treatment clause in the JPEPA refers only to the nondiscriminatory treatment of Japanese and Filipino investors as far as regulatory conditions are concerned, such as taxes and fees, hiring, and distribution requirements.

This does not include the right to own lands, exploit natural resources and engage in activities reserved for Filipinos, the DTI said.

Teehankee, formerly an undersecretary in the Department of Justice, said that contrary to the observations of anti-JPEPA groups, there is no commitment in the JPEPA for Japanese investors to engage in the services sector—such as in public utility, educational institutions, mass media and advertising—because these are reserved only to Filipino-owned companies.

Under existing laws, foreigners can only own 40 percent in any company, with 60 percent or majority owned by Filipinos.

Teehankee also explained that under the most-favored nation treatment clause in Chapter 8 of the JPEPA, the provision states that the country will give Japanese investment activities the same treatment that it gives even to nonparty or other countries without a bilateral agreement with the Philippines.

This means that under this MFN provision, there is no special treatment to the Japanese nationals, Teehankee said.

Yesterday’s hearing dealt with constitutional issues and the movement of goods and services.

Sen. Miriam Defensor Santiago, chairman of the Senate committee on foreign relations, said that although Monday’s hearing was supposed to be the last in the scheduled five hearings, another hearing has been set with Sen. Edgardo Angara presiding. Its date will be announced later.

Santiago, however, said that as earlier announced, the deadline for the submission of memorandums from both sides—the government and the oppositors—will still be on October 23.

According to Santiago, the issue of constitutionality is very important because even if the Senate concurs, if the Supreme Court would later rule that the treaty is unconstitutional, then JPEPA could not be implemented. However, she said there are ways to remedy this “deficiency” without having to reject the treaty.

Besides Teehankee, those who attended the hearing from the government side included Trade and Industry Secretary Peter Favila, Agriculture Secretary Arthur Yap, Health Secretary Francisco Duque, and Acting Justice Secretary Agnes Devanadera.

Among those who attended from the anti-JPEPA groups were former Senator Wigberto Tanada; Atty. Merlin Megallona, former dean of the University of the Philippines College of Law; and Atty. Roberto C. San Juan, who read the position paper of retired Supreme Court Associate Justice Florentino Feliciano.

Fel V. Maragay
Manila Standard

LEGAL eagles yesterday identified the “unconstitutional” provisions of the Japan-Philippines Economic Partnership Agreement that were inserted to accommodate demands by Tokyo, saying these should be removed before the treaty is ratified by the Senate.

This developed as Senator Miriam Defensor Santiago, chairman of the Senate committee on foreign relations, said that she and several other senators are seriously considering sending back the JPEPA to the executive branch for possible renegotiations on the grounds not only of unconstitutionality but on objectionable provisions raised during the series of hearings.

Santiago said the constitutionality of the JPEPA is a “threshold question” because even if the Senate committees will favorably endorse the ratification of the agreement and the Senate approves it, the oppositors will certainly bring their case to the Supreme Court.

Retired Supreme Court Justice Florentino Feliciano and former dean of the University of the Philippines College of Law Merlyn Magallona, in separate papers presented to the Senate committees on trade and commerce and foreign relations, said the JPEPA violates the “nationalistic provision” of the Constitution which provides that certain strategic and vital industries must be reserved for companies that are majority-owned by Filipinos.

Feliciano, whose 17-page paper was read by lawyer Roberto San Juan, and Magallona bewailed that the new treaty will prevent the government from crafting a national development policy that will put emphasis on job creation for Filipinos and on technology transfer as far as entry of foreign investments is concerned.

The JPEPA will further liberalize trade between the Philippines by eliminating tariff on products that they trade with each other. However, legal experts claim this will dilute the tariff-setting powers of Congress as a tool for national development.

Santiago said the unfavorable view expressed by Feliciano and Magallona could further imperil the ratification of the bilateral accord by the Senate.

“They are very clear. In fact, they are very strong in their view that JPEPA is unconstitutional,” Santiago told newsmen during a break in the hearing.

“If we go by the objective analysis of these independent experts, JPEPA is dead because they have no reservations that JPEPA is unconstitutional on several grounds,” Santiago said.

The Fair Trade Alliance urged the Senate to remand the JPEPA to the executive branch.

Former Senator Wigberto Tañada, lead convenor of FairTrade, said the treaty does not conform with the constitutional mandate for “reciprocity” in bilateral trade and economic relationships. In JPEPA, he said, “we got very little while Japan got everything it set out to achieve.”

But Philippine Exporters Confederation president Sergio Ortiz-Luis said ratification is a very welcome move for its members “because our industry is in a state of crisis, embattled by the continued strengthening of the peso and increasing costs fueled by the second highest electricity rates in Asia.”

Agriculture Secretary Arthur Yap told the hearing that the country will be assured of the entry of an estimated $419 million worth of agricultural and fishery exports to Japan annually through tariff elimination and other improved market-access concessions under the JPEPA.

Yap said that under the JPEPA, duty free tariffs of major farm and fishery exports to Japan amounting to $353 million will be immediately “locked-in” once the treaty takes effect.

He said the country will be able to secure from Japan an additional $66 million worth of farm exports as a result of the tariff eliminations.

Senator Mar Roxas, chairman of the trade and commerce committee, said a renegotiation is a possibility as he pointed out that it remains unclear what is the sum total of the benefits that the agreement will bring to the country compared to “what we will give up.”

Mayen Jaymalin
Philippine Star

Close to 100, 000 Filipino workers are likely to lose their jobs with the impending entry of cheaper but unsafe imported vehicles, said the Philippine Metalworkers Alliance (PMA), whose members trooped to the Senate to warn against the passage of the proposed Japan-Philippines Economic Partnership Agreement (JPEPA).

“JPEPA presents a clear and present danger to the automotive, iron and steel workers in the country,” said Frank Mero, national president of the PMA and the Automotive Industry Workers’ Alliance (AIWA).

Mero said the implementation of JPEPA could trigger the mass layoff of about 77,000 workers from the automotive industry, aside from iron and steel workers whose livelihood depend directly or indirectly on the automotive industry.

He pointed out that Article 27 of the JPEPA agreement would pave the way for the legalization of used four-wheeled motor vehicles, which violates an existing policy prohibiting the importation of second-hand vehicles.

He also claimed that Article 27 was not in the original text of the agreement but was inserted by negotiators.

At the public hearing on JPEPA conducted by the Senate committee on foreign relations yesterday, the PMA found allies in constitutional experts who argued that the treaty may be “unconstitutional” on several points, thereby making JPEPA face an impending Senate rejection.

Sen. Miriam Defensor Santiago, foreign relations committee chairman, read the opinion of former Supreme Court Justice Florentino Feliciano before the hearing on the treaty.

Feliciano, who was unable to attend the hearing because he is in the United States, asserted that the treaty has “serious constitutional problems.”

“In my view, personally, when Justice Feliciano says something, that is no longer debatable as far as I am concerned…Even the administration spokesperson on this particular issue conceded that Justice Feliciano’s opinion is simply in the level of the supernatural. When he says something, there is almost nothing that you can say against it,” said Santiago, who recognizes the versatility of Feliciano, describing him as “the preeminent legal expert of this country and the most famous international law expert Asia.”

Former Dean Merlin Magallona of the University of the Philippines echoed some of the arguments of Feliciano that JPEPA infringed on the “exclusive tariff setting power of Congress,” particularly the House of Representatives, provided in Section 24, Article 6 of the Constitution.

“Virtually, if we go by the objective analysis of these independent experts, the JPEPA is dead. JPEPA is unconstitutional on several grounds, and then they went on to explain which these provisions are, and why they adversely affect the validity of the JPEPA,” Santiago said.

Former Sen. Wigberto Tanada has supported the legal opinions of the two experts.

The two legal experts said that the Constitution specified that such tariff powers might be delegated to the President not through a treaty but by law.

“I have already emphasized both in this particular hearing, and in any other occasion, that the constitutional issue is a threshold question,” Santiago said.

Santiago added that the Senate cannot possibly amend the treaty but it can simply send it back to the executive branch “for renegotiation or amendment, addition, or exclusion as we see fit in the Senate floor.”

Magallona pointed out that the national treatment to be given to Japanese investors would also violate the constitutional requirement that companies operating in the Philippines be at least 60 percent Filipino.

Santiago saw the possibility of the treaty being brought to the Supreme Court if the government pushes through with the ratification of the treaty.

Sen. Manuel Roxas II, chairman of the Senate committee on trade and commerce, said there is a possibility that the Senate will just recommend a renegotiation of the contract.

– With Christina Mendez

Katrina Mennen A. Valdez
Manila Times

AMID opposition at the Senate, the Department of Trade and Industry on Monday resumed its lobby for the passage of the Japan-Philippines Economic Partnership Agreement (Jpepa), with senior trade officials briefing members of the press on the benefits of ratifying the accord.

In a briefing, Senior Trade Undersecretary Thomas G. Aquino said the Jpepa will lock-in duty-free market access in Japan for $6.5-billion worth of Philippine exports, while an additional $720 million of produce will be secured duty-free. Moreover, $86-million worth of exports will enjoy gradual tariff elimination, the trade official said.

Aquino said this means that more than 80 percent of the Philippine shipments to Japan, in terms of both tariff lines and value, stand to gain zero duty entry to that East Asian market as soon as the accord is signed. Another 17 percent in terms of value will enjoy gradual tariff elimination, he said, adding, “Less than 1 percent of RP exports to Japan are excluded.”

“Japan has opened its sensitive products to the Philippines with gradual tariff reduction,” the trade official further said.

Sensitive products pertain to agricultural goods.

For its part, Japan stands to gain duty-free access to the local market for 66 percent of its products immediately upon implementation of the Jpepa.

Possible local products that risk increased Japanese competition include sockets, woven fabrics of synthetic staple fibers, oil-petrol filter, medicaments, powder coating among others.

Trade Undersecretary Elmer C. Hernandez said the Philippines is also set to enjoy a dramatic increase in foreign direct investments (FDI) from Japan.

Based on the projected FDIs and employment rise, the country is set to benefit from P365 billion in fresh money, and 211,147 in additional job opportunities until 2010, the trade official said.

Potential recipients of investments are agricultural products and allied services, chemical-based consumer products, chemicals, textiles and leather, electronics and telecoms, engineering products and information technology services.

“But first, Japan will have to complete its due diligence. Then these sectors will be poured in with investments,” Hernandez said.

Japanese businessmen accounted for P27.0 billion in investment pledges made in the Philippines for the first eight months of the year.