The Philippines and Japan are set to resume this year the long-stalled general review of their bilateral free trade agreement (FTA).
Marie Sherylyn D. Aquia, director of the Bureau of International Trade Relations (BITR) of the Department of Trade and Industry (DTI), told reporters on the sidelines of the forum “Unlocking Growth in ASEAN: Strategic Insights in Cross-Border Transactions,” hosted by the European Chamber of Commerce of the Philippines, that the commitment was affirmed by President Ferdinand Marcos Jr. and Japanese Prime Minister Prime Minister Takaichi Sanae in a joint statement issued following the President’s recent visit to Japan for the 70th anniversary of the normalization of diplomatic relations between the Republic of the Philippines and Japan.
Aquia said both leaders acknowledged the importance of the review provisions of the Philippines-Japan Economic Partnership Agreement (PJEPA), as well as the ASEAN-Japan Comprehensive Economic Partnership (AJCEP) Agreement.
“The two leaders, while appreciating the strengthening of Philippines-Japan business relations, recognized the importance of further improving the business environment and reaffirmed the importance of upholding a free and open, and rules-based trade framework. From this perspective, the two leaders acknowledged that the Philippines-Japan Economic Partnership Agreement (PJEPA), the ASEAN-Japan Comprehensive Economic Partnership (AJCEP) Agreement and the Regional Comprehensive Economic Partnership (RCEP) Agreement, have promoted the liberalization of trade and investment between the two countries. They decided to work together towards the full and effective implementation and utilization of those Agreements to promote greater bilateral and regional trade and investments, foster innovation, and create growth opportunities. In this regard, they acknowledged the importance of the review provisions in these Agreements,” the joint statement said.
As head of the BITR, Aquia said she intends to push for the resumption of the general review as early as the second quarter, although she noted that completing the process within the year remains the more realistic target.
The PJEPA, which took effect in 2008, is the Philippines’ first bilateral free trade agreement. The comprehensive trade pact provides for a general review every five years after its entry into force. Although both countries have attempted to conduct the mandated review, discussions have stalled for several years.
Tokyo has been hesitant to grant the Philippines additional trade concessions, contributing to delays in concluding the review process. The prolonged impasse has largely stemmed from differing trade priorities between the two countries.
The Philippines has been pushing for the reduction or elimination of seasonal tariffs on key agricultural exports to Japan, particularly bananas, which face duties ranging from 8 percent during summer to 18 percent during winter, as well as pineapples. Japan’s reluctance to ease these tariffs has contributed to market-share losses for Philippine exporters against competitors such as Ecuador, Peru, and Vietnam, which enjoy lower or zero tariff rates.
In exchange for agricultural concessions, Japan has sought greater market access and tariff reductions for its industrial products and automotive parts entering the Philippine market.
The DTI and the Department of Agriculture have continuously lobbied Tokyo to accelerate discussions on the review. Philippine trade officials have also noted that the PJEPA has increasingly lagged behind newer trade agreements, including the Regional Comprehensive Economic Partnership (RCEP), in terms of market access and trade liberalization commitments.
