JAPAN-PHILIPPINES ECONOMIC PARTNERSHIP AGREEMENT (JPEPA)

What is Japan-Philippines Economic Partnership Agreement (JPEPA)? The JPEPA aims to facilitate and promote the free trans-border flow of goods, persons, services and capital between the Philippines and Japan and strengthen the existing economic relations between the two countries. It is the Philippines’ most comprehensive bilateral agreement to date. The Agreement was signed by then President Gloria Macapagal- Arroyo and then Japan Prime Minister Junichiro Koizumi in Helsinki, Finland in 9 September 2006. The Agreement consists of (1) basic agreement with 16 chapters and eight annexes; and (2) implementing agreement, each providing provisions on various areas of trade and related aspects. How does the agreement benefit Philippine exporters? For our export industries, the Agreement will provide important advances in liberalizing access to a key market. With the Agreement, almost 95% of Philippine exports to Japan (in terms of value) will face zero duties on day one. There will be immediate positive impact on farmers, fishermen and food processors. To take advantage of these opportunities, Filipino exporters must always take into account the emphasis that the Japanese put on food quality and safety. To gain access to Japanese markets, we need to supply hormone free, even-sized, properly packed and hygienic products. However, the agriculture and fishery sector remains a sensitive issue for Japan with certain products such as, among others, rice, wheat, milk, herrings, sardines, mackerel and other fish being excluded from the JPEPA. Apart from fresh pineapples and dried pineapples, Japan made no commitments on other forms of Philippine pineapples (processed, canned, etc.) How can my product qualify for the JPEPA? (The Rules of Origin (ROO) confers origin to wholly obtained goods or products produced entirely in either Japan or the Philippines. It determines originating goods for which preferential tariff treatment under the JPEPA will be accorded.

In deciding the ROO for JPEPA, the following important guidelines were considered: (1) not creating unnecessary hindrances to trade; (2) developed and applied in impartiality, neutrality and consistency, and with due transparency, clarity and predictability; and (3) simple for customs authority to implement and easy for traders to understand.

The Chapter on ROO in the Agreement also gives details of the documentary requirements to claim such preferences.

In determining whether a good qualifies as an originating good of either Japan or the Philippines, an originating good of the other Party used as a material in the production of the good in the former Party may be regarded as an originating material of the former Party.) What is the documentation required for my shipments to Japan? Chapter 3 (Rules of Origin), Article 40-41 of the Agreement substantiates the documents necessary to avail the preferential treatment under the JPEPA. The Philippines’ Bureau of Customs is the competent authority on the matter.

In order to be eligible for preferential duty rates is it necessary to fill out a Certificate of Origin form?

It is always necessary to fill out a Certificate of Origin form in order to be eligible/ avail preferential duty rates.

What does “wholly-obtained” and “substantial transformation” mean? Kindly refer on Chapter 3 (Rules of Origin) Article 29 of the Agreement. Will the JPEPA Agreement create new opportunities in services? Services account for almost 70% of the Japanese economy, a market which is among the most difficult to access. The Agreement enhances Philippine service providers’ access to the Japanese market and guarantees non-discriminatory treatment with limited exceptions. In terms of movement of natural persons, Japan will allow Filipino nurses and care workers to work in Japan on the condition that they pass Japan’s examination requirements. This is important not only because of the expected increase in remittances of OCWs but also because it provides a venue for technology transfer and cooperation which could facilitate improvement in the competitiveness of our workers. Under JPEPA (Annex 8, Chapter 9), both countries will allow the movement of natural persons for short-term business and visits of 90 days, extendable; intra-corporate transferees, investors, natural persons who engage in Professional Services and specialized/ skilled workers one or three years extendable, depending on the classification; and nurse, one year, extendable and caregivers up to three years, extendable.

What about investment disputes? Article 107 (Further Negotiation) of the Agreement subjects the Parties to enter into negotiations after the date of entry into force of the Agreement to establish a mechanism for the settlement of an investment dispute between a Party and an investor of the other Party In the absence of the mechanism for the settlement of an investment dispute, the resort to international conciliation or arbitration tribunal is subject to mutual consent of the parties to the dispute. Where can I get additional information on JPEPA? Further concerns and issues can be addressed: Office of the Director BUREAU OF INTERNATIONAL TRADE RELATIONS Department of Trade and Industry 375 Senator Gil J. Puyat Avenue, Makati City Telephone: (02) 897-8289 / 897-8292 Fax: (02) 890-5149 (To consider other line government agencies which may include, among others, DTI-BOI, DOF, DFA, NEDA, BOC, BIR, etc.)