BEST SAFETY NET IS COMPLETE REJECTION OF THE JPEPA

In contrast to their earlier hyperbolic claims, government negotiators are now at least finally acknowledging that the Japan-Philippines Economic Partnership Agreement (JPEPA) will have adverse effects, hence the need for “safety nets”. But no amount of safety nets will be enough precisely because Japan ’s intention is to create conditions for the maximum exploitation of the Philippines ’ natural and human resources through the JPEPA.

The country’s experience with the World Trade Organization (WTO) since 1995 also clearly shows that so-called safety nets are only token mechanisms that have completely failed to stop the disastrous effects of free trade. Anti-JPEPA group No Deal! reiterates that the best safety net against the JPEPA is to reject it completely.

The WTO was questioned before the Supreme Court in 1994. Although the high court eventually found the WTO agreement constitutional, the subsequent trade liberalization has had disastrous effects on the Philippine economy, severely damaging local agriculture and forcing millions of Filipinos to go abroad to seek work. The past decade of poor economic performance actually gives the Supreme Court a reason to revisit its arguments in Tañada, et al. vs. Angara , et al. (G.R. No. 118295) of May 2, 1997 .

That the main beneficiaries of trade liberalization are First World corporations is clearly shown by the fact that foreign firms have taken an increasingly larger share of manufacturing sales. Transnational corporations’ share of total manufacturing sales among the country’s top one thousand firms has grown from 56% in 1999 to 75% in 2004.

The negative effects of WTO-mandated trade liberalization on Third World countries has resulted in a breakdown in further trade talks since 2001 as underdeveloped countries are unable to accept the deeper liberalization being pushed by First World countries through the multilateral trade organization.

Thus, countries such as the US , Japan and the EU nations are seeking further liberalization through bilateral free trade agreements such as the JPEPA. These countries are also using such agreements to force countries to accept issues for liberalization such as investment, government procurement and competition policy, which were already rejected at WTO negotiations.

Government negotiators also appeared to have committed a grave abuse of discretion by entering into JPEPA motivated by a stubborn adherence to free trade dogma unsupported by sound scientific studies and economic reasoning. This is why they are having difficulty defending the JPEPA’s benefits before the Senate committee on foreign relations, forcing senators to continue scheduling hearings in a frantic attempt to find a pretext for sending the agreement before the body for ratification.

Indeed, government representatives have continuously played up the benefits to Japanese investors and domestic big business interests while glossing over the adverse effects on millions of Filipino fisherfolk, workers and farmers. This is a gross betrayal of government’s avowed duty to govern for the benefit of the majority.

The economy has only been weakened by free trade agreements such as under the WTO and like the proposed JPEPA. If the government is prepared to truly develop the domestic economy instead of surrender it to foreign traders and investors, then safety nets would not be needed. If it is not prepared, then no safety net will be good enough.

CONVENORS

Former Vice President Teofisto Guingona Former Senator Wigberto Tañada Anakpawis Representative Crispin Beltran Rafael Mariano, Kilusang Magbubukid ng Pilipinas Nitz Gonzaga, Kilusang Mayo Uno Fernando Hicap, Pamalakaya  Dr. Carol Pagaduan-Araullo, Bagong Alyansang Makabayan Jossel Ebesate, R.N., Alliance of Health Workers Connie Bragas-Regalado, Migrante Clemente Bautista Jr. Kalikasan People’s Network Rechielda Extremadura, Lila Filipina Arman Albarillo, Bayan-Southern Tagalog Roy Velez, Bayan-NCR Ed Cubelo, Toyoto workers union president Sonny Africa, Ibon Foundation Prof. Roland Simbulan, UP Arnold Padilla, spokesperson

JPEPA UNDERMINES RP CONSTITUTION, SHUTS DOOR TO REAL ECONOMIC DEV’T

The Japan Philippines Economic Partnership Agreement (JPEPA) violates provisions of the 1987 Constitution which are vital to the country’s future economic development, according to independent think-tank IBON Foundation.

The JPEPA directly undermines the intent of the Constitutional mandate to promote the “preferential use of Filipino labor, domestic materials and locally-produced goods”, IBON research head Sonny Africa said. The JPEPA’s various provisions on National Treatment in Articles 17 (goods), 73 (services), 89 (investment), 131 (government procurement) prevent the Philippines from actively supporting Filipino producers.

The JPEPA moreover severely restricts the country to pass laws setting economic policy by prohibiting performance requirements. This effectively prevents Congress from enacting laws that ensure that the country benefits from Japanese investments.

Africa pointed out that under the Agreement, the country would be prohibited from enacting local content requirements, local labor requirements and technology transfer provisions.

The JPEPA’s provisions on taxation expropriation also lay the groundwork for legal challenges to future tax measures, effectively protecting the profits of Japanese corporations at the expense of the country’s right to tax all economic activity within its jurisdiction.

The country’s past experience with free trade validates the wisdom of such economic protections guaranteed in the Constitution, Africa said. Trade as a share of gross domestic product (GDP) has doubled from in recent years. Over that same period, foreign investment quadrupled as a share of GDP, from 4% to some 15 percent. And yet joblessness has soared to historic highs with unemployment rates of 11% and some 11 million Filipinos either jobless or looking for more work. The share of domestic manufacturing to GDP has continued to fall to 23%, as has employment in the sector to 9%, while agricultural deficits have been high and rising since the mid-1990s.

According to Africa , the provisions in the Philippine Constitution are based on solid historical experience of countries that have reached any kind of industrial or agricultural development, including Japan itself. But the JPEPA enshrines a defeatist policy-making and in doing so violates the 1987 Constitution’s vital economic provisions.

As the Senate holds its final hearing on the JPEPA today, IBON urges the senators to consider the Agreement’s future impact on the country’s economic development. The free-trade pact, if ratified, would shut the door to any real industrial development and modernization.

IBON TO WTO HEAD LAMY: AID SHOULDN’T BE USED TO PROMOTE TRADE

Development aid should not be used to promote the developed countries’ ‘free trade’ agenda, independent think-tank IBON Foundation said today, as World Trade Organization (WTO) Director-General Pascal Lamy arrives in Manila to kick off an Asian Development Bank conference on Mobilizing Aid for Trade (AfT).

The WTO defines AfT as ‘donor funds’ channeled to finance trade-related technical assistance and infrastructure, plus aid used to develop productive (supply-side) capacity.

According to IBON research head Sonny Africa, development aid could be of assistance to resource-starved underdeveloped countries such as the Philippines . But this can only happen if aid is divorced from the ‘free trade’ economic agenda of rich donor countries and decisions over where it is channelled and how it is implemented are placed under the control of local shareholders.

Lamy’s intention of promoting aid for trade only affirms how the WTO dangles development instruments like aid to Third World countries such as the Philippines to force open their economies further.

‘BAD DEAL’ : JPEPA WORSE THAN JAPAN TRADE PACTS WITH INDONESIA, MALAYSIA

The Japan-Philippines Economic Partnership Agreement (JPEPA) is already a bad deal for the Philippines , but its flaws are highlighted further by comparing it with similar trade deals negotiated by Indonesia and Malaysia , according to independent think-tank IBON Foundation.

IBON research head Sonny Africa said that Indonesia and Malaysia were able to retain tariff protections on far more products and investment controls in far more sectors than the Philippines did under free trade deals with Japan .

Africa cited the fact that the Philippines only excludes two items – rice and salt – from tariff reduction or elimination in the JPEPA while Indonesia excludes 835 items in its economic partnership agreement (EPA) with Japan concluded in August 2007 Malaysia in turn excluded 38 items in its EPA with Japan of December 2005.

He pointed out that the advantages gained by the two Asian countries were not just in the number of exclusions but in the items they excluded from tariff reduction coverage. Indonesia ‘s exclusions among others include various items of livestock, poultry, fruits and iron and steel products while Malaysia ‘s include various items of livestock, poultry, dairy products, alcoholic beverages, tobacco, rubber and ammunition.

Africa further added that the unfairness in the JPEPA extends to provisions identifying sectors in which foreign investment is controlled or where “reservations” for existing and future protectionist measures are made. The Philippine effectively identifies only six sectors: fisheries, mining, firecrackers, domestic shipping, geothermal energy/natural gas/methane gas, and rice- and corn-related manufacturing.

By contrast, Indonesia identifies over 40 sectors including fisheries, tobacco and cigarettes, food manufacturing, handicrafts, textiles, agricultural machinery, pharmaceuticals, health, education, banking, insurance, construction, water transport, air transport, telecommunications, power, hotel, restaurants, wholesale and retail trade, film and other service activities. Malaysia only identifies at least 17 sectors, but it also asserts its economy-wide Bumiputera policy or affirmative action for Malaysia ‘s majority ethnic group. The wide-ranging industries Malaysia specifies include agriculture, fisheries and forestry, textiles and garments, tobacco and cigarettes, steel, cement, oil and gas, mining and quarrying, petroleum refining, motorcycle, cars, commercial vehicles, palm oil and sugar.

Malaysia and Indonesia continue to develop their domestic industries through active government protection and support over decades, which is why they continue to retain the right to use such measures even after entering into an EPA with Japan , said Africa . It is thus all the more ironic that the distant industrial laggard among the three, the Philippines, is the most eager to disarm itself of these measures which are among the minimum needed for any sort of real economic development, he said