RP-Japan tariff talks reach impasse

The second round of negotiations in the Japan-Philippines Economic Partnership Agreement (JPEPA) reached an impasse as both sides could not come to terms on the framework for tariff reductions for agriculture and industrial products.

Jaime Escober Jr., information officer of the non-government organization Tambuyog Development Center and adviser to the Department of Agriculture in the JPEPA negotiations, said the Philippines and Japan were both unyielding in their positions. The JPEPA negotiations were held in Tokyo last April 16.

The standoff resulted from Japan’s proposal two separate frameworks, one for the industrial sector that requires immediate tariff elimination on most industrial products, and another for agriculture that prescribes gradual tariff elimination for majority of agriculture products over a period of 10 years.

On the other hand, the Philippine delegation, insisted on "maximum flexibility" on industrial goods and immediate removal of tariffs for agricultural products. It also wanted a single framework to cover tariff reductions for both industrial and agricultural products.

"The Philippines’ position is anchored on the fact that the country is an exporter of agriculture, including fishery products, but at the same time it wants to protect its local industrial goods such as cement, shoes and even its recuperating national steel industry."

This was unacceptable to Japan, which wanted to shield its own rice and fisheries industries and indicated that it will just maintain the current levels of import quota from the Philippines and other ASEAN countries.

At the same time, Japan is also negotiating free trade agreements such as the JPEPA not only with the Philippines but also with other ASEAN countries.

Japan is one of the Philippines’ major markets for its agricultural products and has been asking the Japanese government to allow the country to have better market access to its billion-dollar market.

The country’s top agriculture exports to Japan include fishery products such as black tiger prawns, tuna, seaweed, and tropical fruits and vegetables.

Japan’s tariff rates for majority of Philippine agriculture and fishery exports ranged from 0-12 percent in 2003, but it maintained 20 and 23-percent tariff rates for banana and pineapple, respectively. Besides tariffs, Japan imposes tariff restrictions on Philippine meat and sugar exports, and continues to subsidize its agriculture products, including rice.

In the meantime, Escober scored what he called the weakness of the Philippine negotiating position in relation to issues of sustainability and national development.