Japan Pushing JPEPA due to WTO Collapse

The collapse of the World Trade Organization (WTO) talks last week are pushing Japan to become even more aggressive in seeking bilateral and regional trade deals that advance its big corporate interests.

Posted by Bulatlat
Vol. VIII, No. 27, August 10-16, 2008

The collapse of the World Trade Organization (WTO) talks last week are pushing Japan to become even more aggressive in seeking bilateral and regional trade deals that advance its big corporate interests, according to research group IBON Foundation.

More than ever, Japan will try to get through the Japan-Philippines Economic Partnership Agreement (JPEPA) and other such free trade deals what it could not get through the WTO.

It is ironic that the Philippines appears poised to ratify JPEPA even as the WTO talks broke down precisely because of questions on the supposed development gains to be achieved from trade and investment liberalization.

The Japanese economy has grappled with stagnant growth and high unemployment for nearly two decades and is aiming to further open up other economies to cope with its internal problems. It is trying to overcome the crisis of its “bubble economy” which has lingered since the early 1990s. While it claimed to be on the way to recovery in 2002 the emerging scenario of a United States (US) economic slowdown, financial disorder, soaring energy and food prices only make its situation more urgent.

As it is, Japanese corporations are already testing the political limits of what can be squeezed from its domestic labor force to support their profits. Hence they are now after the greatest possible access to the
cheap labor and natural resources of the region with the least intervention and taxes from foreign governments.

The JPEPA’s provisions even go far beyond what was proposed in the failed WTO talks. It includes issues such as investment, government procurement and competition policy which were already rejected at the WTO. The tariff cuts it demands are also far greater than in the WTO.

This is why the Philippines will be on the losing end of the JPEPA which is designed most of all to benefit big Japanese corporations even at the expense of Philippine workers, peasants and economic development. There will only be even more foreign-dominated industrial and service enclaves disconnected from and not benefiting the local economy. Millions of Filipinos already merely struggling to survive will remain impoverished as unequal deals such as JPEPA prevent the economy from developing.

Still a hollow victory

The Japan-Philippines Economic Partnership Agreement (JPEPA) will still be against the best interests of Filipinos and the economy even if Japan accepts the Senate’s proposed “side deal” or any similar legal maneuver to make the JPEPA formally constitutional.

The changes to JPEPA proposed by the Senate still do not transform the deal into a genuine economic partnership agreement that recognizes the vast inequalities between the two countries and takes genuine measures to develop the Philippines.

The “side deal” merely aims to align the JPEPA with the nationalist economic provisions of the 1987 Philippine Constitution. It does not signify a real shift in the country’s economic strategies and merely
asserts what is already formally contained in the charter. Unfortunately these potentially important provisions have in practice not been able to hinder the unprecedented implementation of “free market” policies of so-called “globalization” in the country and, indeed, have been observed more in the breach.

The “side deal” falls far short of transforming JPEPA into a truly developmental deal for the Philippines. Such a deal would begin from recognizing the vast inequality between advanced Japan and backward
Philippines. It would also acknowledge that Japan has become highly developed in part from decades of taking advantage of cheap Filipino labor and natural resources as well as from access to the domestic market.

On these premises, a genuine partnership deal would have Japan in solidarity with the Philippines and giving real support for its development. Among others this means the Philippines having open access to
Japan while still retaining its trade and investment protections, the Philippines maintaining its control over and capacity to regulate the domestic economy, and Japan providing untied financial aid and technical
assistance that the Philippines can freely use according to its development priorities.

Introducing reservations/exceptions for future/existing investment measures and introducing the possibility of changing tariff schedule commitments, as the Senate proposed for “conditional concurrence” previously, are only part of this.

The JPEPA signed by the government on the contrary is unequal, defeatist and destructive and will remain so even with the “side deal”. The only acceptable deal for the Philippines is one based on the principles of
solidarity, mutual benefit and development. Posted by (Bulatlat.com)

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