PHILLIPINE INSTITUTE FOR DEVELOPMENT STUDIES Surian sa mga Pag-aaral Pangkaunlaran ng Pilipinas
November - December 2003
Vol. XXI No. 6
O
n December 4, 2002, Japan’s Prime Minister Junichiro Koizumi and the Philippines’ President Gloria Macapagal-Arroyo held a meeting in Tokyo during the latter’s visit to Japan and discussed the establishment of a Japan-Philippines Economic Partnership (JPEP). The envisaged JPEP would include a possible free trade agreement and other components covering services, investments, support for SMEs, human resource development and other forms of economic cooperation.
The outlook for a Philippine* Japan economic partnership
Why a Free Trade Agreement (FTA)? The worldwide trend is pointing toward regional integration or free trade agreements. In November 2001, the ASEAN and the People’s Republic of China (PRC) announced plans to establish the world’s biggest free trade area (FTA) by 2010. Two months after, Japan abandoned its “single track” approach to a multilateral World Trade Organization
What's Inside? 7
Courting the Japanese elderly:
(WTO) by promoting its own version of an FTA with the ASEAN. This rethinking on FTA by Japan, however, started as early as 1998 through its individual initiatives with Mexico, Korea and Chile. By January 13, 2001, Japan signed its very first bilateral free trade accord with Singapore through the JapanSingapore Economic Agreement for a New Age Partnership. The removal of trade and investment bariers in the FTAs would lower transaction costs, raise economic efficiency, improve economies of scale and upgrade product quality. It would further improve the external competitiveness of agreeing parties on top of substantial trade-creation effects and bigger flows of traderelated investments.
Prospects for the Philippines' retirement and medical tourism industry 13 Making science policy work in the Philippines
ISSN 0115-9097
* Condensed version of the situationer component of the Japan-Philippines Economic Partnership Agreement (JPEPA) research project of the Philippine Institute for Development Studies (PIDS). ** Senior Research Fellow and Research Analyst II, respectively, at the PIDS.
By Erlinda M. Medalla and Dorothea C. Lazaro**
Japan's importance as Philippines’ partner in an FTA Japan plays an important role in the economic as well as infrastructural development of the Philippines. Through the years, Japan has become one of the country’s largest trading partners even if there is no existing bilateral trade or economic agreement between the two countries. Thus, an economic partnership agreement seems to provide an opportunity for further economic expansion and development. Trade Japan is considered an economic hegemon not only in East Asia but also in the world. In 2000, it was the 5th largest exporter with a share of 4.55 percent of the total world exports which was equivalent to an estimated US $252 billion. During the same year, it was also the third largest importer with a 7.5 ) 3