why no deal on jpepa?

Why no deal on JPEPA?

Prepared by

NO DEAL! Movement against unequal economic agreements

September 24, 2008

Background

• Jan 2002: PM Koizumi proposes “Initiative for Japan-Asean Comprehensive Economic Partnership”; GMA gives full support

• May 2002: GMA proposes working group to study Jpepa

• 2002 – 2003: informal consultations, working group, & joint committee meetings

Source: Ibon Foundation (2007)

• Dec 2003: PM Koizumi & GMA announce launching of formal negotiations

• Feb 2004 – Jul 2005: formal negotiating sessions• Jul – Oct 2005: legal review• Sep 9, 2006: signing of Jpepa in Helsinki, Finland• Dec 2006: ratification by Japanese Diet


JPEPA in the Senate

• Submitted to Senate Sep 2007• Committee hearings

• Foreign affairs (Santiago) and trade & commerce (Roxas)• Sep to Dec 2007 (9 public hearings)

• Drafting of committee report• Jan to Apr 2008

• SR No. 555 sponsorship by Santiago & Roxas• 6 Aug 2008

• Plenary deliberations and voting• Aug to Oct?

Supposed Jpepa “benefits”

• Increase in RP exports to Japan by as high as 20% in 2011; expansion in exports• Electronics, automotive, & other industrial

manufactures• Agricultural products (fresh & dried bananas, dried

& salted fish, etc)• Consumer manufactures

Source: Department of Trade and Industry (2006)

• More Japanese investments that will create jobs & raise revenues (2007-2016 projections)

• P559 B (almost P60 B per year)• 35,447 jobs• P4.7 B in revenues


• Higher deployment of OFWs, in particular nurses & caregivers• Easier entry of qualified Filipino nurses &

caregivers to Japan• Japanese health care labor force expected to reach

7.5 million workers by 2010• Japanese aged over 65 years old expected to reach

26% of population by 2015


Japan’s motives in Jpepa

• Japan is always in competition with the US, Europe, & other rich countries to control global markets (i.e. economy of poor countries)

• Bilateral free trade agreements (FTAs) have become an attractive option because of “slow developments” in the World Trade Organization (WTO)

• Japan wants to establish the Comprehensive East Asia Partnership Agreement (CEPEA)• Signed bilateral FTAs: RP, Singapore, Malaysia,

Thailand, Brunei, Indonesia• Under negotiations: Vietnam, Asean, S. Korea,

India, Australia• Under study: China, New Zealand


• Jpepa is thus a part of Japan’s larger plans for its corporations to have access to cheap labor, natural resources, and markets of East Asia

• Jpepa promotes the foreign policy objectives of Japan & not the development of RP as trade partner

Jpepa is a grossly unequal treaty

Jpepa indicators RP Japan

No. of products protected from partner’s competition

2 239

No. of sectors protected from partner’s investments

5 16

Estimated annual revenue losses due to trade liberalization

P10 B P8 B


… & worse than other countries

Country with Japanese FTA

No. of products protected from

Japanese competition

No. of sectors protected from

Japanese investments

RP (2006) 2 5

Malaysia (2005) 38 17+

Indonesia (2007) 835 40+


Jpepa weakens RP sovereignty

• National treatment (Art. 89) – treats Japanese investors as if they were Filipinos

• Most favored nation or MFN (Art. 90) – gives Japanese investors all perks enjoyed by other countries

• Prohibition of performance requirements (Art. 94) – limits the authority of RP government to impose conditions on Japanese investments such as:• Technology transfer• Use of local inputs in production• Hiring of Filipinos in certain positions• Etc

Jpepa will destroy jobs & livelihoodPartial list of economic sectors affected by direct competition from Japan under Jpepa

Employment

Electrical, electronic appliance, & their parts

Auto/transport equipment, & auto parts 30,000

Iron/steel 20,000

Petrochem 90,000

Cement 4,000

Textiles 45,000

Garments & apparel 160,000

Footwear 20,000

Fisheries (tuna industry only) 100,000

Sources: Ibon Foundation (2007), Pamalakaya (2007)

Jpepa offers false benefits

• Increased Japanese investments do not necessarily translate to economic growth & more jobs• $3.9 B Japanese FDI in RP, bulk in manufacturing• Manufacturing shrank bet. 1973 (27% of GDP)

and 2006 (23%)• Low local content: 10% in electronics & 15-20%

in automotive industry


• Increased exports to Japan will only benefit Japanese & other foreign corporations & their local corporate partners, not the workers & farmers• Exports of bananas & pineapples dominated by

Dole & Del Monte, + Sumitomo• Exports of electronic components dominated by

Toshiba, Fujitsu, Panasonic, Epson, & Hitachi• Exports of transport equipment & auto parts

dominated by Toyota, Honda, Mitsubishi, & Isuzu


• Does not guarantee more opportunities for Filipino nurses & caregivers in Japan; strict requirements (Annex 8, Sec 6)• Be qualified nurses & caregivers under RP laws• Be graduate of appropriate 4-yr. degree program

(in the case of caregivers, must be graduate of any 4-yr. degree program & recognized professional caregivers by the RP government)


• Proficient in both written & spoken Japanese language

• Qualified kangoshi (Japanese nurse) or kaigokofushishi (Japanese caregiver)

• Besides, Filipino health workers are not commodities for exports


Jpepa poses real threats

• Allows dumping of toxic wastes from Japan• Ash & residues containing aresenic, etc; ash &

residues from incineration of municipal wastes; waste pharmaceuticals; municipal wastes; sewage sludge; clinical wastes; waste organic solvents; chemical & industrial wastes; etc

Source: Kalikasan People’s Network for the Environment (2008)

• Japan is already notorious in dumping toxic materials in RP even before Jpepa• 1993: exported battery crap in violation of RA

6969 (on control of toxic & nuclear wastes)• 2000: illegally shipped 3,000 tons of toxic wastes• Funding of landfills: 684-ha lot in Ternate, Cavite

for Japanese e-waste

Issues that emerged during the public hearings

• Toxic waste dumping• Exchange of diplomatic notes (May 2007)

• Economic benefits• Increased exports?• Increased investments?• Increased access of nurses & health workers?• Increased transfer of technology?• Increased overall GDP growth?

• Impact on industries & sectors• Unfair competition?• Destruction of local industries?• Job losses?

• Constitutional issues

Constitutional issues

• National treatment• Japanese investors will enjoy the same rights & privileges

reserved to Filipinos

• Most favored nation (MFN)• Japanese investors will enjoy the same most favorable

treatment that RP gave to other countries

• Prohibition of performance requirements• i.e. Japanese investors could not be forced to transfer

technology or to procure locally their production needs

• Constitutional issues were first raised by former SC Justice Florentino Feliciano during one of the public hearings & proposed to amend the JPEPA to correct its constitutional defects

• Santiago initially proposed conditional concurrence• “It will be declared unconstitutional by the SC. That is my humble

opinion as a scholar of constitutional law”. (Dec 2007)

• “The JPEPA is very controversial. Amending or changing some of the provisions of the treaty is needed”. (Feb 2008)

• “Conditional concurrence is an absolute necessity” (Apr 2008)

• Conditional concurrence means Senate will ratify the JPEPA but will require a “side agreement” between RP & Japan to amend the unconstitutional provisions of the treaty

• JPEPA amendment is not acceptable to Japan• DTI has been negotiating with Japan for a side agreement to

amend the JPEPA since Dec 2007 but has failed to secure it• By Apr 2008, there was still no side agreement. Thus Santiago

proposed to sponsor conditional concurrence• Raised legal questions – i.e. Escudero (“not allowed by

Constitution and international laws”)• DFA asked for deferment of Santiago’s 28 Apr sponsorship to

continue negotiating for a side agreement• Jul – Tokyo rejected the side agreement and wanted only a

general statement of assurance that the JPEPA will not violate the Constitution

• 6 Aug Santiago sponsored SR No. 555 endorsing (unconditional) concurrence

• Constitutional defects supposedly already corrected by “exchange of notes” (Sep)

4. The present exchange serves only to confirm the interpretation of, and does not modify the rights and obligations of the Parties under, the provisions of the JPEPA.

Where do the senators stand?

• JPEPA needs 16 votes to get ratified (two-thirds of 23 senators); 8 “no” votes to get rejected

• Santiago claimed JPEPA has the “support” of 14 senators (Roxas, Angara, Arroyo, Enrile, Gordon, Lapid, Revilla, Zubiri, Biazon, Legarda, Estrada, Pangilinan, Pimentel, Santiago) – signatories to SR No. 555 + Lacson?

• Santiago expected no votes from: Madrigal, Pia Cayetano, Escudero, Honasan, Trillanes

• Uncounted: Villar, Alan Peter, Aquino

Miriam’s “allies” debunking Miriam

• Gordon: “Some senators could still not vote for it if the constitutional issues are not clarified”

• Arroyo: “I refuse to concur with the treaty because the two countries could not agree on the side agreement”

• Roxas: “A number of senators could still vote against ratification even if they signed the report. The objections are on constitutionality. My issue is also on constitutionality”

Emerging “renegotiation” bloc

• Pangilinan

• Aquino

• Madrigal

• Trillanes

• + Lacson?

JPEPA: Japanese Economic Invasion

WANTED: PATRIOTIC EIGHT

Pro-JPEPA Undecided/unclearLikely anti-JPEPA/renegotiation

Why no deal on JPEPA?

• It undermines RP sovereignty & patrimony

• It will destroy local industries & livelihood as well as the environment

• It offers speculative & downright questionable benefits

• It seriously violates the 1987 Constitution

• In other words, it is a BAD DEAL

Public pressure

• Education & information campaign (public forum, etc)

• Senate lobbying & trooping

• Signature drive

• Mass actions

Thank you!

http://nodeal.ibon.org

http://nodeal.ibon.org/

why no deal on jpepa?

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