Left Flank

Resurrection has come for Japan-RP free trade in the form of the Japan-Philippines Economic Partnership Agreement, or JPEPA.

It looks as if anti-FTA forces struck too soon, and now even President Gloria Arroyo-Macapagal's support can't dent its aura. Senate President Manuel Villar cannot amend the treaty into palatable bites. Senators Santiago's measured support and Roxas' flip for JPEPA also seem to seal the deal.

At the risk of sounding trite and pedantic at the same time (because economics is about as much fun as calculus and dental surgery combined), but, notwithstanding, that bilateral deals often do proceed advances in multilateral trade rounds, bilateral FTAs are little more than shining a light on the private sector and its lobbies for brief moments. Voters can see how the feeding frenzy that usually ensues hidden in yawn-inducing plain view in government offices and outside of chambers. So, JPEPA is a rare chance for voters to take a little revenge, but not much. That said, it's not an economic victory, but rather GAM's swansong.

Philip Brasor writes a great piece about the conflict between the market and agricultural traditions and government trade policies. With only a change, from «rice» to «maize», a farmer in Iowa could feel a Japanese farmer's pain.

Though they paid lip service to the farmers' hard work, some of the studio participants wondered out loud if there wasn't something stone-headed about government support for rice. University of Tokyo Professor Masayoshi Honma said that the main reason the government promotes rice consumption right now is that rice is the only crop that holds up the self-sufficiency rate, as low as it is.

In response, the farmers' position in advocating the continuation of government protection through tariffs and subsidies became increasingly defensive. They said that if the Japanese rice market collapsed, the rural environment would deteriorate, small communities would disappear, and Japan's connection with its agrarian past would cease to exist. While these developments would certainly be dire, they have little to do with the problem's source, which is that Japanese people don't want to eat as much rice any more.

The government's rice protection policy was formulated during World War II, when the citizenry was starving. After the war, production increased and rice was pretty much all there was. The quality wasn't very good, but everybody ate it for breakfast, lunch and dinner. Consumption peaked in 1963, when the average Japanese person ate five bowls a day. That statistic decreased to 3 1/2 bowls by 1978 and now stands at 2 1/2.

There's a simple reason for this: more choice. Japan's standard of living is among the highest in the world. Japanese people can eat anything they want, and they famously do. There is no reason to eat as much rice as they once did, or any at all, for that matter; but as the arguments on the NHK program showed, rice has a powerful hold on the Japanese imagination.

Halfway through the three-hour marathon, the moderator put this question to the studio participants and the viewers: Should Japanese people eat more rice? Again, the voters at home overwhelmingly sided with the farmers: yes, they should. But a number of people in the studio took issue with the question itself.

«Why can't I eat anything I want?» asked one student, even though he said he ate more rice than the national average. And Honma seemed offended. «That question is pointless,» he said. Whether or not Japanese people «should» eat rice was irrelevant to the debate, since you couldn't do anything about people's preferences in a free society.

There's no PR in the world can compete against free choice and affluence.

Without resorting to the human rights card, the European Union business lobby has found a way to stymie FTA talks with the ROK, because of an unfair mix of politics and trade.

BusinessEurope fears EU employers would be at a disadvantage if goods produced at South Korean factories in Kaesong were classed as southern-made, it said.

In a letter, BusinessEurope's secretary-general Philippe de Buck, asked David O'Sullivan, head of the European Commission's trade directorate, which is leading trade talks with Seoul, to ensure Kaesong is excluded, it said.

«I would like to express our concerns about the risk of unfair competition from products manufactured in the Kaesong industrial zone in North Korea - an area which is likely to remain off-limits for European companies given the current political situation in that country,» de Buck was quoted as saying.

South Korea sees Kaesong as a flagship project to reform the North's moribund economy and ease the massive costs of any eventual reunification.

No matter what the ROK Constitution says about the boundaries of the Korean state, the EU still finds the DMZ more legitimate. Seoul will just have to reform its economy the hard way...by itself.

I'm almost certain Smith and Ricardo would agree. that a free-trade agreement that includes a provision about dumping hazardous waste, is not a win-win situation.

At Thursday?s hearing, groups opposed to the treaty even managed to impress Ambassador to Japan Domingo Siazon.

Siazon commended Junk JPEPA lawyer Golda Benjamin for her ?excellent, thorough, articulate and well-researched? arguments that the treaty would promote the entry into the Philippines of toxic and other hazardous waste from Japan.

Under JPEPA, the tariff rates for hazardous waste would be reduced to zero.

Siazon, who flew back to Tokyo after the hearing, said the Philippines needed the support of a ?technologically advanced? country like Japan to deal with its own hazardous waste.

Health Undersecretary Alexander Padilla, meanwhile, stunned the senators when he disproved the Department of Environment and Natural Resources? claim that Japan would not export hazardous waste to the Philippines.

Padilla said the Department of Health had ?concerns? that the treaty would allow for reciprocity, meaning that both the Philippines and Japan could export hazardous waste to each other.

?While we agree with the noble objectives of the JPEPA, we feel we do live in an imperfect world,? he said.

That's an understatement, indeed!