Japan wants zero tariff on automotive exports to RP

Japan wants the government to immediately reduce to zero tariffs on automotive exports to the Philippines once the Japan-Philippines Economic Partnership Agreement (JPEPA) takes effect.

But Trade and Industry Secretary Peter B. Favila said yesterday the Philippines is only willing to effect a phased tariff reduction over a five-year period.

"The automotive issue is one of four issues holding up the completion of the JPEPA," Favila said.

The three other thorny issues are the movement of natural persons, trade in goods and trade in services.

However, Favila is still optimistic that negotiations and the signing of the JPEPA agreement would be completed by August.

Favila explained that while the JPEPA may still need to go through further legal review by Congress, he is still setting a target in August.

Favila assured that the government is taking into consideration the concerns of the local automotive sector in negotiating with the Japanese government.

Earlier, Senior Trade Undersecretary Thomas G. Aquino hinted at a possible delay in the signing of the JPEPA due to the need for further fine-tuning of certain provisions.

Aquino had explained that the Philippine panel does not want to rush the agreement.

"It has to be a good deal. We want to conclude it as soon as possible, but it (the agreement) cannot be born out of tension or we will not be able to live with it," Aquino explained.

Some of the provisions of the agreement that need further fine-tuning, Aquino cited, include the provisions of Rules of Origin, the automotive sector and the movement of natural persons.

The Philippine negotiating team is very careful in bargaining with their counterpart to ensure that the agreement that would be signed by both governments abides by Philippines Laws and that local business gain from the accord, Aquino said.

The proposed JPEPA seeks to enhance bilateral economic relations between the Philippines and Japan.

It will definitely increase foreign direct investments and spur economic growth and development for the country by generating employment, enable technology transfer and possibly make the Philippines a base for Japanese companies to export to other ASEAN countries.

The governments of Japan and the Philippines are still in the thick of negotiations as the final leg of the talks is underway. Both parties are reviewing the completed chapter provisions of the proposed accord and have assured that the final draft JPEPA text would be out soon.

The JPEPA, considered as a bilateral milestone between the two countries, seeks to promote freer trans-border flow of goods, persons, services and capital between the Philippines and Japan.