The general review of the Philippines-Japan Economic Partnership Agreement (PJEPA) has reached an impasse as Manila’s insistence that Tokyo includes in the renegotiation table - market access issue or preferential if not zero tariff rates for its agricultural products - fell on deaf ears.
During a virtual presscon, Trade and Industry Undersecretary Ceferino S. Rodolfo candidly admitted that the Philippines’ insistence for better tariff treatment on the country’s agricultural products has long been ignored by Japan. In fact, no substantive meeting between the two parties has occurred in the past two years.
Rodolfo noted that since PJEPA is the first ever bilateral free trade agreement of the Philippines and has been enforced for quite a number of years, the DTI believes that is already due for upgrade to make it up to date and relevant to other FTAs given new developments.
“We’re really prioritizing our review and to keep it (PJEPA) up-to-date with other FTAs whether regional or bilateral that the country has already been a party to,” he stressed adding that by doing so this will make the PJEPA relevant particularly on preferential access to each other’s markets.
It is imperative that both sides will sit down and review the agreement given the substantial conclusion of the Philippines-Korea FTA negotiation wherein Korea granted the request of the Philippines to allow the entry of pineapples and bananas at zero duty in five years for bananas from the current 30 percent pineapples in 7 years.
Japan currently imposes 18 percent tariff on Philippine bananas during the winter season and 8 percent during the summer. It is one of the countries where Philippine bananas are heavily taxed. In fact, Japan used to be the largest importer of Philippine bananas until China took the spot in 2018.
Instead of hearing out the Philippines, DTI’s Director at the Bureau of International Trade Relations Angelo Salvador Benedictos said that Japan would like to talk about lower tariffs for its industrial products exports to the country such as steel and petrochemicals.
On automotive tariff, Japan is not quite interested even if its 3,000 cc and above vehicles are still imposed with 30 percent tariff and below 3,000 cc at 20 percent.
Rodolfo could only surmise Japan’s disinterest on this issue because it has already content with its current position having been benefitting from the zero duty on its automotive exports to the Philippines from their production hubs in ASEAN, particularly Thailand and Indonesia.
As such, Benedictos said they told Japan that there could not be further talks unless they would see the inclusion of market access on Philippine agricultural products particularly, bananas, in the renegotiation.
Benedictos echoed the hope that Japan would make its rules on Philippine agricultural products less restrictive by granting better preferential treatment on the country’s agricultural exports, if not zero duty especially for tropical fruits.