IBON ON JPEPA RATIFICATION: GOV’T HAS CLEARLY NOT LEARNED ITS LESSON

It is not surprising but still disappointing that the government has clearly not learned its lesson. The current global turmoil and its impact on the Philippines underscore the vulnerability of our economy. The country is extremely vulnerable because of nearly three decades of reckless “free market” policies of globalization.

Progressive groups warned in 1994 about the damage that a World Trade Organization (WTO) deal would cause. Yet the government insisted on ratifying the deal and even implemented policies opening up the economy beyond what the WTO agreement required. The so-called safety nets were ineffectual and local industry and agriculture has been devastated causing unprecedented joblessness.

The economy’s fundamentals are very weak and will be weakened further by JPEPA and other such deals to come. The country’s historic jobs crisis will worsen, more Filipinos will be forced to try and find work abroad, millions more will suffer poverty and deprivation.

We condemn the surrender of the country’s sovereignty and patrimony by the government through JPEPA. The country’s negotiators have absurdly given up nationalist and protectionist policy measures that Malaysia, Indonesia and Thailand for instance held on to in their respective trade deals with Japan.

The only acceptable deal for the Philippines is one based on the principles of solidarity, mutual benefit and development for those who have long suffered poverty and backwardness. The JPEPA however is a treasonous deal that must be completely rejected.

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CONSTITUTIONAL’ JPEPA A HOLLOW VICTORY

The Japan-Philippines Economic Partnership Agreement (JPEPA) will still be against the best interests of Filipinos and the economy even if Japan accepts the Senate’s proposed “side deal” or any similar legal maneuver to make the JPEPA formally constitutional.

The changes to JPEPA proposed by the Senate still do not transform the deal into a genuine economic partnership agreement that recognizes the vast inequalities between the two countries and takes genuine measures to develop the Philippines.

The “side deal” merely aims to align the JPEPA with the nationalist economic provisions of the 1987 Philippine Constitution. It does notsignify a real shift in the country’s economic strategies and merely asserts what is already formally contained in the charter. Unfortunately these potentially important provisions have in practice not been able to hinder the unprecedented implementation of “free market” policies of so-called “globalization” in the country and, indeed, have been observed more in the breach.

The “side deal” falls far short of transforming JPEPA into a truly developmental deal for the Philippines. Such a deal would begin from recognizing the vast inequality between advanced Japan and backward Philippines. It would also acknowledge that Japan has become highly developed in part from decades of taking advantage of cheap Filipino laborand natural resources as well as from access to the domestic market.

On these premises, a genuine partnership deal would have Japan in solidarity with the Philippines and giving real support for its development. Among others this means the Philippines having open access to Japan while still retaining its trade and investment protections, the Philippines maintaining its control over and capacity to regulate the domestic economy, and Japan providing untied financial aid and technical assistance that the Philippines can freely use according to its development priorities.

Introducing reservations/exceptions for future/existing investment measures and introducing the possibility of changing tariff schedule commitments, as the Senate proposed for “conditional concurrence” previously, are only part of this.

The JPEPA signed by the government on the contrary is unequal, defeatist and destructive and will remain so even with the “side deal”. The only acceptable deal for the Philippines is one based on the principles of
solidarity, mutual benefit and development.

JAPAN PUSHING JPEPA DUE TO WTO COLLAPSE

JAPAN PUSHING JPEPA DUE TO WTO COLLAPSE The collapse of the World Trade Organization (WTO) talks last week are pushing Japan to become even more aggressive in seeking bilateral and regional trade deals that advance its big corporate interests. More than ever, Japan will try to get through the Japan-Philippines Economic Partnership Agreement (JPEPA) and other such free trade deals what it could not get through the WTO. It is ironic that the Philippines appears poised to ratify JPEPA even as the WTO talks broke down precisely because of questions on the supposed development gains to be achieved from trade and investment liberalization.

The Japanese economy has grappled with stagnant growth and high unemployment for nearly two decades and is aiming to further open up other economies to cope with its internal problems. It is trying to overcome the crisis of its “bubble economy” which has lingered since the early 1990s. While it claimed to be on the way to recovery in 2002 the emerging scenario of a United States (US) economic slowdown, financial disorder, soaring energy and food prices only make its situation more urgent. As it is, Japanese corporations are already testing the political limits of what can be squeezed from its domestic labor force to support their profits. Hence they are now after the greatest possible access to the cheap labor and natural resources of the region with the least intervention and taxes from foreign governments.

The JPEPA’s provisions even go far beyond what was proposed in the failed WTO talks. It includes issues such as investment, government procurement and competition policy which were already rejected at the WTO. The tariff cuts it demands are also far greater than in the WTO.

This is why the Philippines will be on the losing end of the JPEPA which is designed most of all to benefit big Japanese corporations even at the expense of Philippine workers, peasants and economic development. There will only be even more foreign-dominated industrial and service enclaves disconnected from and not benefiting the local economy. Millions of Filipinos already merely struggling to survive will remain impoverished as unequal deals such as JPEPA prevents the economy from developing.

WITH OR WITHOUT SIDE DEAL, SENATE SHOULD REJECT JPEPA

Japan’s refusal to commit itself to a “side deal” on the Japan Philippines Economic Partnership Agreement (JPEPA) should be enough reason for senators to reject the controversial trade deal, according to independent think-tank IBON Foundation.

Japan reportedly just wants a “general statement” of assurance that the JPEPA will not violate existing constitutional constraints and international law commitments. But if the JPEPA is passed by the Senate in exchange for such an assurance, it would commit the Philippines to forever forego vital policy tools such as trade barriers and policy controls. Japan itself used these protectionist policies to develop its economy in the past, but would deny the Philippines the use of these tools in the future.

Further, ratification of the JPEPA would also mark the start of an era of defeatist economic policy-setting in the Philippines, as the country would be forced include in future free trade agreements concessions that it had given to Japan.

But even if Japan had agreed to the side deal, the JPEPA remains inherently an unfair trade agreement that is biased against the Philippines’ economic interests. If senators are genuinely concerned about the country’s economic welfare, they should reject the JPEPA. (end)

IBON is one of the convenors of No Deal! Movement Against Unequal Economic Agreements

SC decision on JPEPA sets dangerous precedent on future RP trade negotiations

The NO DEAL! Movement today said that the Supreme Court (SC) decision upholding the secrecy of the negotiations on the controversial Japan-Philippines Economic Partnership Agreement (JPEPA) will set a dangerous precedent on future economic pacts that the Philippines will enter into.

In effect, the SC is legitimizing the marginalization of ordinary Filipinos from having access to  pertinent information on economic treaties such as the JPEPA that will have a deep impact on their interest and livelihood, said the anti-JPEPA coalition.

This will embolden the executive branch to enter into more trade and investment agreements and make commitments without due regard to their harsh effects on various sectors, especially the poor and marginalized. Trends indicate that bilateral trade and investment agreements are on the rise in recent years, with the Philippines having pending negotiations with the European Union (UN), the US, China and others aside from its economic deal with Japan.

The coalition also hit executive secretary Eduardo Ermita’s statement that international agreements “should be handled with care” and with “confidentiality”. These diplomatic concerns should be secondary only with the paramount concerns of the people about their interest and livelihood and of the country’s national patrimony and sovereignty. It added that public access to information on economic treaties under negotiations is indispensable to protect the public and national interests.

But the SC ruling undermined the fundamental right of the people to know the “compromises” that the executive department is making on their behalf. Many of the questionable and controversial provisions of the JPEPA stemmed precisely from the lack of transparency and prior consultation with the concerned sectors, the coalition noted.

The NO DEAL! Movement has been lobbying the Senate to reject the JPEPA because of its negative effects on the country’s long-term economic development and sovereignty; livelihood of Filipino workers, fishers and farmers; violation of the Constitution; and disastrous environmental impact. The coalition added that the supposed benefits of the JPEPA such as increased access of Filipino nurses and health workers as well as commodity exports to the Japanese market are over-hyped claims to justify the indefensible treaty.

‘FEAR OF EXCLUSION’ A FLIMSY REASON TO RATIFY JPEPA

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

IBON On The JPEPA ‘Conditional Concurrence’: Still Unacceptable

The terms of the “conditional concurrence” of the Japan-Philippines Economic Partnership Agreement (JPEPA) proposed by the Senate committees on foreign relations and on trade improve the deal, but unfortunately, still do not go far enough.

Even if accepted by Japan , which is unlikely, they still do not transform the deal into a genuine economi c p artnership agreement that recognizes the vast inequalities between the two countries and takes genuine measures to develop the Philippines .

The conditions for concurrence with the JPEPA proposed by the Senate committees are potentially substantive. The proposed Annex “A” explicitly introduces reservations/exceptions for future/existing measures that are not in the original agreement. This may possibly protect investment areas and allows for performance requirements.

Meanwhile, the proposed Annex “B” explicitly introduces the possibility that subsequent changes in Philippine laws of a suitably high level– such as by a Supreme Court decision or legislation by Congress– could alter tariff schedule commitments. This could possibly allow for raising tariffs and other trade barriers.

These proposals aim to align the JPEPA with the nationalist economi c p rovisions of the 1987 Philippine Constitution and are positive as far as they go. However, they do not signify a real shift in the country’s economic strategies and merely assert what is already formally contained in the charter. Unfortunately, these potentially important provisions have in practice not really been able to hinder the unprecedented implementation of “free market” policies of so-called globalization in the country and, indeed, have been observed more in the breach.

In any case, the conditions for concurrence still fall far short of transforming JPEPA into a truly developmental deal for the Philippines . Such a deal would begin from recognizing the vast inequality between advanced Japan and backward Philippines . It would also acknowledge that Japan has become highly developed in part from decades of taking advantage of cheap Filipino labor and natural resources as well as from access to the domestic market.

On these premises, a genuine partnership deal would have Japan in solidarity with the Philippines and giving real support for its development. Among others, this means the Philippines having open access to Japan while still retaining its trade and investment protections, the Philippines maintaining its control over and capacity to regulate the domestic economy, and Japan providing untied financial aid and technical assistance that the Philippines can freely use according to its development priorities.

The JPEPA signed by the government on the contrary is unequal, defeatist and destructive. The “conditional concurrence” proposed is an improvement, but the only acceptable deal for the Philippines must be one based on the principles of solidarity, mutual benefit and development for those who have long suffered poverty and backwardness. Anything short of this must be rejected.

JPEPA HIGHLIGHTS GOV’T INSENSITIVITY TO NURSES

Apologists for the Japan-Philippines Economic Partnership Agreement (JPEPA) continue to claim that the treaty’s ratification will mean more employment and foreign remittances for Filipinos. But according to independent research group IBON, JPEPA highlights the Philippine government’s insensitivity to nurses and caregivers.

IBON research head Sonny Africa says that government is trying to portray that the JPEPA is a clear-cut benefit for a few hundred of the country’s health professionals. “In reality government is using them as fodder to cover up for its severe failure in generating jobs for Filipinos,” he said.

The Japanese government is facing the challenge of dealing with its aging population, and it is now state policy to reduce the costs of nursing and caregiving, said Africa . This situation has resulted in low wages and poor working conditions that even Japanese health professionals find intolerable.

The average annual income of nurses in Japan was just US$40,000 in 2004 compared for instance to US$54,000 in the United States . Caregivers’ annual income in Japan is much lower at US$25,200 for females and US$40,000 for males.

In May 2007, a survey conducted by the Health, Labor and Welfare Ministry found that 40% of Japanese nursing care license holders have turned down work in the industry because of low wages and poor working conditions. An earlier survey in 2006 found that 70% of Japanese nurses feel that they could quit their jobs at anytime due to chronic fatigue and professional disappointment.

The JPEPA and other similar deals lets Japan hire nurses and caregivers, for instance, from the Philippines and Indonesia , even more cheaply. After 6 months of language training, applicants can already have on-the-job training for up to 3-4 years while they try to pass the relevant national exams. Although they are already working during this time they will be receiving pay only as non-licensed workers or trainees or candidates– or as nurse’s aides and caregiver’s assistants. This goes far to cheapening the cost of Japan ’s health care, but at the clear expense of Filipino and other trained health professionals, said Africa .

“Using the so-called gains for nurses and caregivers to make acceptable a patently unequal deal like the JPEPA only shows an uncaring government that treats its labor force as mere commodities for export,” he said

Why Fear Japan ’s Ire Over Non-Ratification Of JPEPA? Think-Tank Asks Miriam

Independent think-tank IBON Foundation asks Sen. Miriam Santiago why she is more concerned over earning the ire of Japan if the country fails to ratify the Japan-Philippines Economic Partnership Agreement (JPEPA) than the damaging consequences the pact is likely to bring the economy.

Santiago , who chairs the foreign relations committee, filed a committee report endorsing conditional concurrence which requires Japan to comply with at least 15 specified constitutional provisions to avoid a no-approval vote.

But according to IBON research head Sonny Africa, “Asking for a conditional concurrence from Japan is foolish because these questionable provisions in JPEPA are precisely the ones Japan wants included in order to gain maximum advantage for its corporations.”

These unconstitutional provisions include the “national treatment” clause that gives Japanese investors the same rights as local entrepreneurs; and the lifting of performance requirements that would have required Japanese investors to use a certain level of local content in their production and the hiring of a certain number of local workers.

Africa added that JPEPA’s proponents in the Senate themselves admit that the problem with the pact is that the advantages “were in favor of Japan but not necessarily the Philippines ”.

“The proposal of conditional concurrence highlights the unconstitutionality of JPEPA, and no amount of modification can make the deal beneficial for Filipinos,” he said.

“We should not be afraid of earning the ire of Japan but rather demonstrate that the Philippines is not afraid of rejecting bad trade deals that don’t promote its economic interests.” (end)

IBON is a convenor of No Deal! Movement Against Unequal Economic Agreements.

GOV’T CLAIM OF BILLIONS OF INVESTMENTS FROM JPEPA TO SPELL DOOM FOR RP MANUFACTURING

As the Senate resumes its sessions today, independent think-tank IBON Foundation again urged senators to reject the Japan-Philippines Economic Partnership Agreement (JPEPA) saying that the P365 billion in investments that the deal will supposedly bring is too high a price to pay for the death of the local manufacturing sector.

As it is, the long-term liberalization of the economy has further weakened the country’s manufacturing base. But the implementation of the JPEPA, and the free trade pacts that will inevitably follow in its wake, would end any chance of improving the local manufacturing sector and will permanently reduce it to being a mere assembler of imported inputs for re-export.

This trend is already evident in recent export figures from the National Statistics Office, which showed that industries which use imported raw materials or assembled parts, have overtaken those sourcing chiefly domestic raw materials.

IBON research head Sonny Africa said the trade liberalization brought by the JPEPA would further worsen the already dire situation of the country’s manufacturing sector. The “national treatment” and “most-favored-nation (MFN)” provisions in the free trade pact would prevent the country from imposing policies to help local manufacturers, such as restrictions on imported products and local content requirements.

Africa pointed out that the JPEPA is merely a way for Japan to promote the interests of its transnational corporations along with their local elite partners. Japanese companies already dominate many of the sectors in the local electronics manufacturing export industry, with its three biggest electronic firms accounting for over 53% of total gross revenues in the computer manufacturing sector as of 2006.

Instead of passing exploitative free trade pacts like the JPEPA, Africa said the government should instead implement national industrialization policies, which would lead to the creation of millions of much-needed permanent jobs and the country’s long-term economic development.