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

Source: Ibon Foundation (2007)

 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

Source: Department of Trade and Industry (2006)

• 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

Source: Department of Trade and Industry (2006)

 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

Source: Ibon Foundation (2007)

• 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 2 239

partner’s competition
No. of sectors protected from 5 16
partner’s investments
Estimated annual revenue losses P10 B P8 B
due to trade liberalization

Source: Ibon Foundation (2007)

 … & worse than other countries

Country with No. of products No. of sectors

Japanese FTA protected from protected from
Japanese Japanese
competition investments
RP (2006) 2 5

Malaysia (2005) 38 17+

Indonesia (2007) 835 40+

Source: Ibon Foundation (2007)

 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 & livelihood
Partial list of economic sectors affected by direct Employment
competition from Japan under Jpepa
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

Source: Ibon Foundation (2007)

• 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

Source: Ibon Foundation (2007)

• 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)

Source: Ibon Foundation (2007)

• Proficient in both written & spoken Japanese
language
• Qualified kangoshi (Japanese nurse) or
kaigokofushishi (Japanese caregiver)
• Besides, Filipino health workers are not
commodities for exports

Source: Ibon Foundation (2007)

 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
Likely anti- Pro-JPEPA Undecided/unclear
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