The government only tries to divert from its failure to negotiate a better deal when it says that the Philippines will be a big loser in the region if it does not ratify the JPEPA.
By Sonny Africa
IBON Features— Time and again, the country’s economic managers and apologists for the Japan-Philippines Economic Partnership Agreement (JPEPA) would invoke the scenario of the country being left out in the region if it does not ratify the bilateral deal.
However, this line of “fear of exclusion” is a flimsy reason for ratifying the JPEPA. The Senate hearings have established the deal’s unconstitutionality and exposed its supposed gains as largely unfounded hype. The long-term consequences of lost policy sovereignty are also grave and will cement Philippine backwardness.
It is not even true that the country will “lose out” to its neighbors in the region without the deal. For one thing, the Philippines is extremely open to Japanese investment as it is with US$827 million in net foreign direct investment coming from Japan in 2007, accounting for 41% of total equity inflows for the year. This implies that Japanese investors are already benefiting greatly from the country’s labor, resources and market even without JPEPA.
For another, the deals sealed by the country’s neighbors in Southeast Asia do not even completely open them up to Japanese investors and make the Philippines appear relatively closed.
The countries most comparable to the Philippines in the region are Malaysia , Indonesia and Thailand , and they have all kept nationalist and protectionist measures in their respective economic partnership agreements (EPAs) that Philippine negotiators have recklessly given up.
Malaysia protects 38 items with tariffs and at least 17 investment sectors, aside from maintaining its nationalist pro-Malaysian Bumiputera economi c p olicy. It has also not yet forsaken performance requirements on investment and only committed to “entering into consultations at the earliest possible time”.
Indonesia protects 835 items and over 40 investment sectors, as well as reserves the right to demand technology transfer and impose the hiring of nationals.
Thailand has the most liberal terms and protects just ten items and one sector. However, it maintains performance requirements on technology transfer, hiring of nationals, appointing of officials, research and development, linking domestic sales to exports, location of regional headquarters and overseas supply conditions.
In contrast, Philippine negotiators maintain protection on just two items and five sectors, while relinquishing all performance requirements that might have enabled genuine benefits from any Japanese investment in the country.
Aside from those that Thailand maintains, these include obligations regarding domestic content, local purchases, export requirements and import-export ratios. These policy measures are vital for the medium- and long-term growth of competitive industries. Without them, Japanese corporations will just be one-sidedly benefiting from their investment in the country– which is the sort of investment that the Philippines can and should do without.
The JPEPA is a bad deal that is much worse than reached by the country’s neighbors. The government only tries to divert from its failure to negotiate a better deal when it says that the Philippines will be a big loser in the region if it doesn’t ratify the JPEPA. IBON Features