Unresolved issues seen to delay signing of RP-Japan trade agreement

The scheduled September signing of the Japan-Philippines Economic Partnership Agreement (JPEPA) may be slightly delayed if negotiators are not able to reach agreement regarding the two contentious issue of automotive and services, Trade and Industry Secretary Juan B. Santos said over the weekend.

In a press conference, Santos said that the negotiations are still on track.

However, he indicated that negotiators for both countries are finding the automotive and services issue to be "contentious."

Both sides, Santos admitted, are trying to secure as much concessions as they can get.

Japan is trying to secure the best concessions for the entry of its automotive exports, while the Philippines wants the Japanese government to allow more skilled and qualified Filipino workers to work in Japan.

The negotiations is supposed to be in its final stages with one of the remaining issues for the Philippines is to secure an airtight dispute settlement mechanism.

The Philippines wants the dispute settlement mechanism to ensure it is amply protected under a comprehensive dispute settlement agreement arising from its commitments in the JPEPA.

An example of a contentious dispute is the Japanese investment in the Philippine International Terminals Co. (PIATCO) in the still uncompleted Ninoy Aquino International Airport Terminal 3.

Conflicting claims by PIATCO and the German investor Fraport A.G. are now in arbitration proceedings before the International Center for the Settlement of Investment Disputes in Washington and the International Chamber of Commerce in Singapore.

To avoid similar disputes, the Philippine negotiating panel is ensuring the inclusion of a dispute settlement mechanism.

A legal team of experts from the Office of the Solicitor General, the Department of Justice, the Office of Chief Presidential Legal Counsel has been formed to "clean up the legal text" of the framework.

"All trade agreements have dispute settlements that have to be reviewed carefully. Once a dispute arises out of our commitments in the JPEPA, we have to be protected, so that we are not caught in between," According to Foreign Affairs Undersecretary Edsel Custodio.

The Philippines and Japan have set a September deadline for the completion of the JPEPA.

Negotiations in the services and agriculture sectors are also in the final stages.

On agriculture, the Philippine negotiating panel is ensuring that Japan allows the entry of Philippine produce since Japan is known to be protectionist while the Philippines does not see any problem on the issue of Japanese agricultural products entering the local market.