Monday, December 01, 2008

JPEPA: President Arroyo's Coup d'Etat?

My favorite Fil-Aussie Benign0 subscribes to the notion that the specificities of those who occupy his former country's positions of power do not matter. He writes:
If we are not able to prove that our prospects for prosperity are a function of who is sitting in Malacanang, then why bother even wasting precious bandwidth on any discussion about whether Gloria is out to extend her term or not?

Now a more inane statement I have not read in a while. To claim that structure trumps agency, i.e. that the institutions matter and actors do not, is a view taken by people who are probably so brilliant they have foregone common sense.

Manong Benigs also claims the Philippines is in a "normal" state:
We are in a situation that is part and parcel of what it means to be a democracy.

According to Manong Benig's normative standards, a democracy does not need to address serious allegations of electoral cheating and massive graft and corruption among the country's top-level officials. A democracy does not need to address accusations of its armed forces making people disappear. Nevermind the trail of anomalous deals the Arroyo administration has pursued in the last four years. Nevermind the impeachable offences outlined yearly by those who are still outraged but still go through due process anyway. Nevermind that the law in this democratic society only applies when and if the law-makers and law-enforces deem them applicable.

So, Manong Benigs wants a concrete example of Gloria Arroyo's activities which can only be described as a "serious injury" to the Republic? If the allegations of the past four years are not enough to satisfy, then let me offer the case of the JPEPA - Arroyo's largely silent coup d'etat.

The JPEPA was signed by the President in September 2006 in Finland. It was signed under a cloak of secrecy as has been wont to do by the Arroyo administration. It is the country's first bilateral agreement of such an extensive scope, dealing with trade in commodities, investments, and labour. From 2004 to September 2006 (after the president signed the treaty), the initial drafts of the treaty were kept from public view.

The House of Represenatives, mandated by no less than the Constitution to participate in crafting trade agreements, had zero participation in the trade negotiations. The Supreme Court acceded to this secrecy by ruling in favour of "Executive Privilege." This privilege is normally invoked in diplomatically sensitive negotiations - understood to be security-related. The JPEPA is explicitly an economic treaty - divulging the nitty-gritty of negotations would in no way compromise 'national security.'

In a belated attempt civil society groups and certain representatives brought the issue on executive privilege to the Supreme Court. They cite three grounds to gain access to the full text of the treaty - it is of public interest, the right to participate in an agreement of such a wide scope, and a concern that disclosure of the full text to the Senate after the negotiations have been concluded would make the latter a mere 'rubberstamp' of the Executive.

So here is a "slice" of how the Arroyo executive works.

Owing to the ignorance and indifference of the general public, the co-opted legislative and judicial branches and the weakness of civil society groups, the Arroyo government has assumed such massive decision-making powers in violation of this country's own Consitution, laws and interests of various domestic sectors.

To humour Manong Benigs, how is JPEPA "injurious" to the republic?

1. It normalizes trade in toxic wastes. DTI Secretary Favila himself admitted in November 2006 that it was a necessary condition that the Philippines include the toxic waste provisions for Japan to open its services market in caregivers and nurses.

JPEPA provisions directly clash against domestic legislation which aim to protect the environment - the Clean Air Act, the Toxic Susbtances and Hazardous and Nuclear Wastes Control Act and the Solid Waste Management Act.

2. JPEPA will subject domestic industries to competition with Japanese goods through tariff elimination and through the most-favoured-nation clause - which means that Japanese investors should be treated the same way as Filipinos. This may well kill what is left of local industries.

Unthinkingly, due either to sheer incompetence or malicious side-deals (you can imagine a Filipino negotiator being susceptible to bribes), Philippine negotiators eliminated tariff lines unnecessarily - making reservations only for rice and salt. Japan on the other hand was able to uphold its tariff protection on 238 agricultural and manufactured products.

While Philippine exporters may well benefit from open Japanese markets, JPEPA also assures that each party should able to uphold standards, i.e. SPS requirements. SPS are known to be 'non-tarriff' barriers - which could include something as innocent as requiring Philippine bananas to be certain size and blemish free. To comply with these standards would cost domestic exporters money.

3. The agreement has not won any clear benefits for the Philippines in terms of foreign direct investments (FDI). Countries such as China and South Korea have demonstrated the capacity of FDI to transfer know-how and technologies to benefit their domestic firms specifically and to be integrated into national development plans generally.

Under JPEPA, the Philippine government cannot impose these transfers of technology to the Philippines. Under normal investment treaties, foreign corporations are required to hire a certain number of locals. This has also been scrapped in the agreement.

4. The provisions on trade in services short-change Philippine nurses. No less than the Philippine Nurses' Association has rejected the JPEPA. Their grounds for rejection include the very stringent requirements needed for Filipino nurses to enter the Japanese healthcare service market.

To illustrate, despite having four years of higher education, passing the Philippine Licensure Examination and three years of actual nursing practice, nurses will enter Japan as "trainees" to undergo training for two more years. If after these two years they do not pass the licensure exam in Nihonggo, they will be deported.

As trainees these nurses will not be paid the salary of professional nurses. They also forego employment rights under the Japanese Immigration Control Act.

5. JPEPA limits the Philippine legislature's space to maneuver. Again in a monumental oversight of disastrous proportions, the Philippine negotiating team did not make reservations for future legislation that would ostensibly protect Filipino interests, while allowing the Japanese the same privilege. This means that should the Philippines craft another treaty which extends certain benefits to a third country in the name of 'national interest' then the Philippines can be sued by Japan. In negotiating for JPEPA, the Arroyo executive branch compromised Congress' law-making power.

6. JPEPA sets a bad precedent for the Philippines' other bilateral agreements - all taking place outside the WTO regulatory framwork. The Philippines is no different from a host of countries entering these FTAs and EPAs as the WTO's Doha Round has failed to progress in the last six years. Philippine bilateral and multilateral agreements outside the WTO ambit are taking place in the context of an increasingly "deregulated" international trade regime - a race to the bottom, the survival of the fittest.

JPEPA will enter into force on December 11, ten days from now. The question we need to ask is this - was JPEPA an end product of the Arroyo Administration's sheer incompetence? A lapse in governance? A result of her neoliberal ideologue-advisors? Or was it a product of more malicious intentions - i.e. officials of the Arroyo government engaging in massive rent-seeking activities to enrich themselves?

Cross-posted at FilipinoVoices.

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