No progress has been made with the general review of the Philippines-Japan Economic Partnership Agreement (PJEPA) this year due to concerns over market access for agricultural products, particularly bananas, which are major export products of the country. Trade Undersecretary Ceferino S. Rodoldo told the reporters in a recent news briefing that the Philippines is keen on negotiating better market access for bananas, especially because the local exporters still pay a substantial amount of duties for entry. Currently, the Philippine bananas are imposed with an 18-percent tariff during the winter season and a lower 8 percent during summer. The country’s banana exports to Japan reached 1.345 million metric tons (MT) last year, according to the Philippine Statistics Authority (PSA), making it the top export market for the local produce. As of end-July, banana shipments to Japan reached 508,590.569 MT. “Philippines-Japan FTA [free trade agreement] review and renegotiation has not moved forward, particularly because of Philippines’s insistence on discussing and negotiating for better market access for our agricultural product, including tropical fruits,” he said. On the contrary, Korea agreed to drop the tariffs for exports of Philippine bananas and canned pineapples in five years and seven years, respectively, during the recently concluded trade negotiations of the countries. The FTA of Manila and Seoul is expected to be signed by February next year. “As PJEPA is the first ever FTA of the Philippines, it is already due for upgrade, etc., to make it still up-to-date and maintain its preferential status vis-a-vis other trade agreements,” Rodolfo added.
This is not the first time the Philippines asked Japan to reduce or eliminate tariffs for its banana and other agricultural exports. In May 2016 during the 5th PJEPA Joint Committee Meeting in Manila, the country sought for more favorable terms for local farm products and other items, including bananas, pineapples, yakitori chicken and tuna, among others. The trade official, meanwhile, said that the Philippines is amenable to trade-off of market access on certain products. Rodolfo said that Tokyo will likely ask, in exchange, lower tariffs for industrial products, citing petrochemical and steel. Japan may also want to eliminate tariffs for vehicles below 3,000 cc as they are still slapped with a 20-percent duty, he added. “’Yun ’yung mga hihingin nila. Sige lang ako dun,” he said. [They will ask for these. I am okay with these.] Bureau of International Trade Relations Director Angelo Salvador M. Benedictos said that the FTA partners had only one meeting regarding the general review so far. Apart from the concerns over market access, he said that the pandemic also affected the negotiations. Trade Assistant Secretary Allan B. Gepty, for his part, said he is hoping that the discussions will resume already so they can discuss the pending issues. He added the FTA discussion should also consider the advancement in technology and changes in business models, among others. PJEPA was signed in 2006, entering into force about two years later. Article 161 of the trade agreement states that the FTA should undergo general review by both parties in 2011 and every five years thereafter, making 2021 a year for evaluation. Philippine exports to Japan grew by 10 percent to $8.11 billion in January to September from $7.37 billion in the same period last year, according to PSA. In the same period, Japanese imports to the country surged by 32.2 percent to $8.03 billion from $6.07 billion year-on-year.