Malaluan and Ofreneo’s article is a response to “JPEPA: Why the Need to Ratify” written by Josef Yap, Erlinda Medalla and Rafaelita Aldaba. The Yap paper asserts that failure to ratify the said treaty will result in the loss of opportunities like GDP growth, job generation and poverty reduction, which are expected to result from greater access to the Japanese market in terms of trade and movement of natural persons and from declining prices, rising incomes, and increased Japanese foreign direct investment (FDI).
Malaluan and Ofreneo criticized the paper for putting forward the “same kind of threat economics that economists deployed in the 1994 World Trade Organization (WTO) debate. In that debate, the executive, with the support of free trade economists, bamboozled everybody by saying that if we did not ratify the country’s membership in the WTO, we would lose the opportunity to create half a million new jobs in industry and another half million jobs in agriculture every year.” The projections of Yap et al. on JPEPA also “overemphasize the positive and hide the negative”. (1) Yap et al. fail to note the distributional effect and the fiscal effect of foregone tariff revenues once the treaty is implemented. (2) Rather than boost the competitiveness auto parts makers and car assemblers as Yap et al. argue, the treaty will allow second hand cars to flood the Philippine market. (3) The negative impact of Filipino nurse migration to Japan on our own healthcare system is not considered in the analysis. (4) The treaty’s provisions on tariff lines coverage does not put the Philippines and Japan on equal footing.
