INCLUSION OF CONTESTED ‘SINGAPORE ISSUES’ IN JPEPA THREATENS LOCAL BUSINESSES

Developing countries opposed the inclusion of the controversial “ Singapore issues” in the Doha Round of trade talks under the World Trade Organization (WTO) for fear of how these would impact on their local economies. Yet the Philippines has included these issues in the free trade agreement with Japan , threatening local businesses and the country’s freedom to set policies for its national development.

According to IBON research head Sonny Africa, the Japan-Philippines Economic Partnership Agreement (JPEPA) includes provisions on three of four of the “ Singapore issues”: competition, government procurement and investment. The effect of their inclusion is to strengthen the rights of Japanese investors while undermining government’s power to protect local industries.

For example, the provisions on government procurement (Chapter 11, Article 131), the Philippines “recognizes” that it is “important” to “accord national treatment and most-favored-nation treatment to goods, services and suppliers of the other Party with respect to the measures regarding government Procurement.” This could be interpreted as preventing the national government from favoring local suppliers over Japanese ones.

Similarly, in the JPEPA’s provisions on Competition (Chapter 12, Article 135), the Agreement calls on the signatories to “take measures … to promote competition by addressing anti-competitive activities.” Africa said this could be construed for example, as preventing the government from requiring local carmakers to source a certain percentage of their parts from local suppliers, since this may constitute “anti-competitive” activities.

The inclusion of the “Singapore Issues” in the JPEPA prevents the Philippines from using the protectionist trade and investment measures that Japan itself used when it was building up its local economy. Africa said that from the end of the 19th century to as late as the 1980s, the Japanese government heavily protected its car, truck, shipbuilding, and computer and consumer electronics industries. As part of its protectionist measures, for example, the average weighted average tariffs the Japanese government imposed on imported inputs reached as high as 30 to 40 percent.

Japan developed its technology either by requiring technology transfers from American, French and British investors, or was copied using “reverse engineering” of other countries’ technology. In addition, government procurement of goods and services was done strictly with Japanese firms.

Under the JPEPA, the Philippines surrenders its sovereign right to benefit from economic relations with other countries, while surrendering the country and its resources to the needs, demands and profits of Japanese corporations, said Africa. (end)

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