THE Department of Trade and Industry (DTI) said that the Japan-Philippines Economic Partnership Agreement (JPEPA) should be reviewed to account for developments in digital trade, among others.
At the National Exporters Weeks, Undersecretary Allan B. Gepty said an upgraded JPEPA may include rules and arrangements necessary to establish a resilient supply chain.
“(It may also) include a comprehensive chapter on digital trade, intellectual property, sustainable development, and even a forward-looking economic cooperation arrangement focused on innovation and technological development,” he added.
The JPEPA is the Philippines’ first bilateral free trade agreement (FTA), which entered into force in December 2008.
It covers trade goods, rules of origin, customs procedures, investment, movement of natural persons, intellectual property, and government procurement.
“Notably, this FTA has no provisions or elements relating to sustainable development, environment, e-commerce, or even the circular economy, which are critical in promoting sustainable trade and economic empowerment for our stakeholders,” he said.
“We can say that JPEPA is more focused on market access and the conventional rules and disciplines in conducting trade and investment,” he added.
Japan is the country’s third-largest export market and the third-largest source of imports. Total trade between the two countries amounted to $20.7 billion last year.
The Philippines’ top exports to Japan are digital monolithic integrated circuits, ignition wiring sets, and other wiring sets for vehicles, aircraft, or ships, bananas, nickel oxide sinters, and other vessels for the transport of goods and persons.
“Clearly, trade with Japan is anchored heavily on electronics and semiconductors. If the Philippines and Japan want to promote sustainable trade, I would say that it is imperative that we strengthen the supply chain for these key products,” he said.
“This means Japan should invest more in these sectors, especially product or design development and the production of high-technology-based products, especially as the Philippines positions itself now as a hub for smart and sustainable manufacturing,” he added.
Mr. Gepty said that the review of the JPEPA has been long overdue. Under the agreement, it was to have been reviewed after five years of implementation.
“I would like to stress that sustainability is not just about the environment. People also matter; thus, cooperation on talent and skills development means a forward-looking approach to sustainability,” he said.
“This is what the Philippines and Japan must do moving forward. This arrangement must be entrenched in an FTA or other international agreement. In fact, this will also complement Japan’s co-creation vision in Asia,” he added.
He said that the Philippines and Japan can also partner in food security and agriculture, particularly in developing Philippine agriculture to complement Japan’s own food security program.
“With the country’s proximity to Japan and through our strong collaboration, we can upgrade our JPEPA to include not just enhanced market access but clear, more transparent, and simplified sanitary and phytosanitary standards,” he said.
This will allow the two countries to trade agricultural products with ease, which may encourage more investment in agriculture.
The Philippines supplies agricultural products like bananas and other tropical fruits that are part of the basic diet of most Japanese.
Philippine exports of bananas to Japan currently enjoy tariff reductions in Japan of 8% and 18%, depending on the season.
“We want to reduce it to zero. We want to negotiate for its reduction. So that is what we are working on,” he said. — Justine Irish D. Tabile
