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First, it was Intel, the world’s largest manufacturer of computer
chips, from which we heard news that it would have to make
China—not the Philippines—its base for expanded activities in
manufacturing more advanced products in Asia. Now, it is the United
Parcel Service (UPS), the world’s largest package delivery
company, which in 2010 will move its intra-Asian hub now at the
Clark Freeport also to China.
But what is the Philippines doing in the face of
all these setbacks? We are giving mixed signals to foreign
investors. We cannot seem to put our act together.
One item that could offset the departure of such
major investors as Intel and UPS is the Japan-Philippines Economic
Partnership Agreement (JPEPA). The executive branch crafted it, of
course with their Japanese counterparts, as a hedge in the event of
an economic slowdown in the US, our number one trading partner, and
throughout the world.
After protracted public hearings, which started
late last year, the Senate seems to have relegated the treaty to the
backburner.
This was done after the Japanese government
indicated that it was not inclined to sign side agreements to the
pact. Sen. Miriam Defensor-Santiago, chairman of the Senate foreign
relations committee, has said that the Senate was willing to adopt
the treaty but only through a “qualified concurrence” or subject
to additional side documents that the two countries must agree and
sign.
Of course this was not acceptable to the
Japanese government because the Japanese Diet has already ratified
the treaty without any side documents.
The Japanese government has earlier agreed to
sign an exchange of diplomatic notes assuring that it would not
export toxic waste or hazardous materials to the Philippines, an
issue that has been used by anti-JPEPA critics to scare the senators
from adopting the accord.
The diplomatic notes or protocols were signed by
Foreign Affairs Secretary Alberto Romulo and his Japanese
counterpart, then Foreign Minister Taro Aso during the official
visit of President Arroyo to Tokyo in May last year.
But that assurance notwithstanding, the Senate
asked for more side documents to correct what it termed as
constitutional infirmities in the treaty.
Now, nobody knows when the treaty will be
submitted to the Senate plenary for concurrence or whether it will
be ultimately junked.
If the JPEPA is junked, we would be missing a
great opportunity to cushion the impact of a full US and global
recession.
First, our exports to Japan, our second biggest
trading partner, will suffer. Japan would obviously prefer exports
from countries with which it has bilateral economic accords such as
Singapore, Malaysia, Thailand and Indonesia.
Second, direct foreign investments from Japan
will also go to these four countries. Under the JPEPA, the Board of
Investments has projected Japanese FDIs to increase to P222.5
billion by 2010. This additional investment could have generated
some 350,000 new jobs.
Third, opportunities for foreign health workers
would be opened to citizens from the four countries but not to the
Philippines. This means that our Filipino nurses and care givers
would not be able to take advantage of the higher salaries offered
by Japan to these workers.
Fourth, without the JPEPA, the country would
lose an expected increase in total tax revenues amounting to P7.7
billion as a result of increased economic activities and the surge
of exports to Japan.
At the core of the treaty is liberalized trade
in goods and services between Japan and Philippines. The effect of
liberalized trade on employment is obvious. As tariffs on our
agricultural and manufactured exports to Japan are eliminated or
lowered, production in our farms and factories will expand, creating
more jobs and helping solve the age-old problem of poverty in our
country.
Our senators do not seem to look at things that
way. Otherwise, they would do something about JPEPA right away. By
dilly-dallying action on the JPEPA, they have become unwitting tools
of the forces of retrogression and economic stagnation.
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