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  • Analysis
    The Jpepa jump-start: Dissecting a treaty
    By Dean de la Paz
    Special to BusinessMirror

    WHEN the Jpepa first entered our collective consciousness, its critics had the upper hand. The nightmares they etched into the public mind linger like disembodied ghosts even when our most potent statutes readily safeguard against imagined abuses.

                    The critical imagery conjured was an effective first blow. Antiglobalization activists, typically up in arms against nearly everything globalization has to offer, painted the country as a toxic wasteland should the Japan-Philippines Economic Partnership Agreement (Jpepa) be ratified. They noted that the Jpepa exposes the country to imports of “toxic and nuclear waste—including those ‘fit only for disposal.’ Never mind the potency of constitutional provisions that check these, and never mind that both countries issued definitive and compelling diplomatic exchanges allaying fears of toxic-waste dumping.

                    The next arena was even more passionate. Seeing that the agreement opened up a restricted labor market, one where, against specific Jpepa provisions, exported labor might receive equitable treatment, critical nongovernment organizations threw out another roadblock. Citing mostly cultural factors, they claimed that Filipino labor in Japan would be discriminated against. Pandering to the cultural stereotype is easy and is an effective way to conjure criticism by using stock clichés. However, in scrutinizing the Jpepa’s labor impacts, some specificity is important.

                    One, in the globalization order, the least mobile compared with capital and technology is labor. Capital and technology can go through cyberspace and immediately, they are globalized. Even real property can change hands at the click of a button on an electronic deed. But labor, for it to be globalized, requires gargantuan efforts. Such agreements that open up restricted markets are not only rare, but also the opportunities  they bring to an economy like ours, where labor exportation is a major contributor, cannot be taken lightly.

                    Two, Japan’s promotion of technical exchanges, one negotiated between a highly industrialized economy and one such as ours, revitalizes both and internationalizes economies and societies. This is not only contained in the agreement but is an integral policy of Japan worthy of emulation.

                    Three, the areas that Japan opens up are not likely to adversely affect its domestic labor market. Similarly, the experience with the Japanese expatriates in our economy shows little, if any, adverse impacts among local labor.

                    Moreover, Japan offers to open up additional labor commitments. We are not talking about more nurses and transvestites. Under the agreement it offers “to take commitments on the residency status of accounting, engineering, legal services, and specialists in humanities and international services”. It is also offering “to commit legal and taxation services sector in addition to the supply of services by natural persons as well as the removal of the limitation on the number of licenses conferred to service suppliers thus expanding the scope of occupations for which these services may be supplied.”

                    Four, under Jpepa, Filipino workers are granted “national treatment”. This means that foreign nationals are entitled to the same terms and conditions of work enjoyed by the Japanese doing the same type of work ceteris paribus. While it is true that there are strict language and training requirements, sans the emotionalism, we might see in this the upgrading of health-care labor where indeed language and training are critical.

                    The most nebulous attacks upon the bilateral agreement, however, were arguments that labeled the Jpepa unpatriotic. Invoking a cocktail of emotion, motherhood, flag and sovereignty issues, critics centered on uncontestable paradigms. One business publication constantly referred to Jpepa’s benefits as hyperbole. According to a constant editorial, “the benefits cannot match the loss of sovereignty and the massive inroads into the economy to be made by the Japanese as a result of being treated like Filipino nationals. Under Jpepa, the Japanese will act as if they owned the Philippines.”

                    The myopia might have been valid in the middle of the last century, but one wonders whether the emotionalism remains relevant in a global world.

                    There lie the foundations of the attacks upon Jpepa. Jpepa is a globalization proxy fight. Seeing that the agreement is a ticket that jump-starts our foray into the global economy, it is understandable why antiglobalists and other discontents are passionately against it. But then let us be fair. Labor exports and debt have been our tickets for too long. Seeing beyond disembodied ghosts, we might realize that, already, we’ve been in the global economy, ready or not, and Jpepa simply enhances our productivity.

                    As it is our global growth has already been linked to Japan. Japan is our second-largest trading partner. Where cost of capital is concerned the yen is relatively inexpensive and rivaled only by financing costs provided by China for developmental infrastructure. Should free trade and financing between our economies increase, each unit of financing requires debtors to warehouse a prorated amount within its treasury. This accomplishes two things.

                    It tempers the inordinate and detrimental strength of the peso against a weakened dollar thus improving our competitiveness. It also strengthens the inherent value of our current account by denominating reserves in a currency less affected by political flashpoints.

                    Thus, Jpepa not only increases trade between our economies but, in a very direct manner, jump-starts our economy in such a way that strengthens us against some of the most potent risks that globalization inherently carries.

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