According to government sources, the dispute settlements clause specifies that all disputes must be settled domestically except for certain instances wherein the Secretary of Trade agrees to submit the dispute for international arbitration.
The dispute settlements clause, sources said, is now more favorable for the Philippines compared to previous arrangements which automatically submitted disputes to international arbitration.
The Philippines, sources explained, wants to avoid a situation similar to Argentina wherein at least 14 disputes were submitted to international arbitration.
International arbitration, the sources said, are very costly for the government.
Negotiations on the dispute settlement mechanisms was the last hurdle of the JPEPA talks.
The dispute settlement mechanism is intended to avoid another "Fraport-type" dispute which leads to costly litigation.
Formal signing of the JPEPA, the sources said, could be held between President Arroyo and Japanese Prime Minister Junichiro Koizumi when they meet at the Asia-Europe Summit (ASEM) in Helsinki, Finland next month.
Negotiations for the JPEPA were temporarily halted following the filing of a petition before the Supreme Court for a "mandamus, prohibition and a temporary restraining order" against the conclusion of the JPEPA.
Some lawmakers and civic groups want the Executive Branch to submit to Congress a copy of the agreement before concluding talks.
Civic groups led by Akbayan Citizen’s Action Party, Pambansang Katipunan ng mga Samahan sa Kanayunan, the Alliance of Progressive Labor and Representatives Lorenzo Tanada III, Etta Rosales, Rizza Hontiveros-Baraquel and Joel Villanueva had filed the petition for mandamus, prohibition and TRO with the Quezon City RTC.