Development Denied: JPEPA within AJCEPA

IBON FoundationDecember 8, 2009

The Philippines (2008) Population of 91 million

2nd largest in Southeast Asia 13th largest in the world

GNP (nominal) – $185.5 B GDP (PPP) – $317.5 B

5th largest in Southeast Asia 38th in the world

GDP (PPP) per capita – $3,300 163rd in the world

Background AJCEPA

signed - April 2008 entered into force - December 2008 implemented by Japan and seven ASEAN

countries: Singapore, Malaysia, Brunei, Vietnam, Laos, Myanmar, Thailand

JPEPA signed - September 2006 entered into force - December 2008.

Policy context of talks (1)

1. Strong bias for market-based foreign capital-driven and -defined ‘development’

Vigorously implemented since 1980s, now arguably among most formally open countries in region

Yet unfavorable outcomes Industrial & agricultural decline Record joblessness, rising poverty

Policy context of talks (2)

2. As a result, Philippine economy now has elements predisposing policy to further liberalization

Marked increase in presence of foreign capital with major export interests

Migration & remittances (i.e., cheap labor export) a major prop of the economy

Local industrial capital greatly diminished

Philippines vis-à-vis JPEPA/AJCEPA (1)

FTA strategy not underpinned by any coherent policy of domestic agricultural & industrial development

Even before JPEPA/AJCEPA, Japan & Philippines in general already quite open to each other

JPEPA more comprehensive and substantial of the two deals (“WTO+”)

Philippines vis-à-vis JPEPA/AJCEPA (2) JPEPA

concrete commitments in goods, services, investments, and movement of natural persons

provisions for further action in intellectual property, government procurement, competition policy, dispute settlement

AJCEPA concrete commitments only in goods provisions for further action in other areas explicitly recognizes SDT and flexibility for LDCs has chapters on SPS and on standards

Towards inclusive trade policies? Clear what advanced economies want from

the ASEAN countries – Yet less clear what kind of mutually beneficial

integration ASEAN countries can have with each other doesn’t just put them in a self-destructive race-to-the-bottom

Basic problem in the Philippines: retrograde political leadership opposed to alternative policies – How to build democratic momentum to expand

what is politically possible, and developmentally urgent, in the socioeconomic realm?

Salamat po