JPEPA: What can we get out of it?

For poultry, the TRQ will provide an in-quota rate of 8.5 percent, against an MFN applied rate of 11.9 percent.

For beverages, there will be immediate tariff elimination for coffee, beer and fermented drinks made from aratiles, bignay, calamansi, coconut, dalandan, guava and marang, among others.

Most of this food items are new in the Japanese market and will require extensive marketing efforts. At the same time, product improvement and research and development have to be undertaken to make these foods acceptable to the Japanese consumer.

Gradual tariff eliminations toward zero will be implemented in products like frozen yellow fin tuna, canned tuna, fresh bananas, dried pineapples and fruits containing sugar.

Not just trade pact

JPEPA is unique in that it is not only a trade agreement. It is a framework for cooperation between Japan and the Philippines that includes assistance in human resources development, research and development, and technology development and transfer.

Through JPEPA, the farm sector can attain higher levels of production not only for exports but for our domestic needs—with Japanese technical assistance.

The agreement has sufficient provisions that will protect the environment and prevent any illegal trade in toxic waste. There are very stringent import controls and regulations on trade in hazardous waste. A careful reading of the agreement will show that it does not contain any provision explicitly allowing trade or liberalized entry of regulated or banned products in both countries.

Sustainable cooperation

The Philippine Institute of Development Studies (PIDS) says the agreement is based on sustainable and environmental cooperation. It binds the countries to the general principles of efficient use of energy, proper management of the environment and sustainable development, and the need to cooperate in the field of energy and environment.

Trade liberalization under JPEPA allows special exceptions for environmental protection. These articles state: “Nothing in this Chapter shall be construed to limit the authority of a party to take measures it considers appropriate, for protecting health, safety or the environment or prevention of deceptive practices.”

The bottom line is that JPEPA has sufficient provisions to protect the environment and prevent any illegal trade that may arise from the zero tariff imposed on hazardous and toxic waste. The PIDS notes that trade liberalization under JPEPA does not mean, or imply, that the ability of any of the two countries to take measures to control trade in hazardous and toxic waste or, more generally, to protect the environment is at issue.

Similar fears about the environment and health had been aired by some people in at least two Asian countries—Singapore and Malaysia—when they forged similar agreements with Japan.

In the economic partnership agreements signed by Japan with the two Southeast Asian countries, tariffs on ash, residues, waste pharmaceuticals, municipal waste, sewage sludge, clinical waste and other waste products have also been eliminated.

There have been no adverse effects on the environment of Singapore and Malaysia since these agreements took effect.

Services

Services account for about 70 percent of Japan’s economy. This sector is the most difficult for foreign companies to penetrate. Japan, for the first time, is opening this market through JPEPA to Filipino engineers, IT specialists and health workers.

Filipino technicians and professionals will be able to get outsourced jobs and contracts in engineering design, interior design, architectural services, motion picture production, particularly animation, to mention only a few.

The tourism market comprises not only hotel and restaurant services but also air transport services, computer reservation systems including call centers and the repair, maintenance, and servicing of airplanes. Most of these jobs and contracts will be outsourced to Filipino workers and companies.

Japan’s population is aging. It will need health workers, particularly nurses, physical therapists, occupational therapists, pharmacists and institutional and home-based caregivers. JPEPA will give Filipino professionals in these fields preferential and nondiscriminatory access to these occupations.

The immediate needs of Japan are in the medical and health-care fields. The Japanese Department of Labor estimates that by 2010—three short years hence—Japan will need about 7.5 million health professionals. Japan’s elderly population now account for 20 percent of its total population. This is expected to rise to 29 percent of the total by 2025.

The opportunities for well-paid jobs for Filipino health workers, is the most immediate benefit from JPEPA. Others will follow as the agreement is implemented.

Retirement communities

But over time this initial benefit can be expanded to retirement communities in both Japan and the Philippines, nursing homes that are owned by Filipino health workers, and medical tourism catering to Japanese clients.

The sea-borne trade of Japan is expected to increase. Hence, Japan will be needing service personnel for its cargo ships. These jobs will be available to Filipinos.

Telecommunications is the fastest growing sector in the Philippines. We have produced a well-trained work force that can now find jobs in Japan’s ICT-based industries and to service the needs of OFWs living and working in Japan.

JPEPA is an agreement anchored on close cooperation. Besides the trade gains and opportunities, JPEPA seeks to provide a more tangible framework of sustainable growth for industries like energy. Like Japan, the Philippines is heavily dependent on imports for fuel supply. Yet Japan stands today as an example of an economy weaned on the policy of clean, affordable energy. It has invested heavily in developing alternative sources of power such as solar and wind.

The Philippines continues to make inroads in the development of alternative energy sources. JPEPA will hasten this drive for clean, affordable energy. At the end of the day, the Philippines seeks to have an economy driven by affordable power, a regime which will benefit the consumers who will enjoy lower prices of goods. It will redound to the benefit of households as well since the cost of power generation will go down, bringing the cost of electricity with it.