Trade and climate change are issues that should be handled together in order to create a better economy in a sustainable environment. Whatever trade policy is pursued by countries engaged in trade agreements will have a direct impact on the state of the world’s environment. Trade policy may mitigate or aggravate climate change which in the long run will either improve or defeat trade activities.
What is climate change?
Climate change as defined by the United Nations Framework Convention on Climate Change (UNFCCC) is “a change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to the natural climate variability observed over comparable time periods.”
What is the effect of climate change?
A major evidence of climate change today is global warming. Global warming is the accumulation of greenhouse gases (GHG)—carbon dioxide, methane and nitrous oxides in the atmosphere; these trap the sun’s heat energy thus resulting in increases in the average global temperature. It is caused by GHG-emitting human activities such as excessive burning of fossil fuels, deforestation, and growing waste dumps.
Other effects of climate change are increase in sea levels, increase in temperature and acidity of oceans, melting of ice caps, spread of climate-related diseases such as malaria, higher incidence of hurricane and forest fires, and destruction of crops.
In the Philippines, the most affected sectors of climate change are agriculture, food security, and health. (Atty. Rommel J. Casis, Professorial Lecturer at the U.P. College of Law, and Program Director of the International Environmental Law Research Program)
Is climate change relevant to international trade? How can climate change impacts affect trade and investment flows?
Yes. The Stern Report put this into perspective by calculating that the costs of action on climate change were in fact less than the costs of inaction, and noting that failing to address the problem creates the equivalent of a 20% loss of GDP globally, now and forever, with losses falling disproportionately on poor countries. In such a context, delivering on the fundamental goals of the multilateral trading system becomes impossible.
Climate change will have significant impacts on trade flows, given its expected impacts on agriculture, forestry and a number of other highly traded sectors. In general, the impacts of this type will involve changes in comparative advantage based on environmental factors.
Another sort of impact involves climate change directly affecting trade‐related infrastructure, or trading routes. The Stern Report identified several of these sorts of impacts:
• Rising sea levels may endanger coastal infrastructure that supports trade, such as ports, as well as trade‐related facilities located close to ports such as steel mills, petrochemical plants and other energy facilities.
• Rising Arctic temperatures will make Arctic sea lanes safer and more reliable as transport routes. However, melting permafrost may damage high latitude oil and gas installations, pipelines, as well as railways.
• As well, extreme weather events can be expected to disrupt markets and infrastructure. Particularly vulnerable is infrastructure located near coastlines, such as oil refineries, nuclear power plants, and port facilities. One of the predicted effects—increased flooding—will affect infrastructure as well as transport routes.
How do trade liberalization, investment agreements or other sorts of trade policy changes alter the economy in ways that impact on climate change?
1. Lowering tariffs just on particularly GHG‐intensive goods (whether intensive in production or in their end use) is likely to aggravate climate change.
2. Agreement to restrict domestic subsidies will have a positive composition impact if the subsidies in question encourage the production or use of particularly GHG‐intensive goods. On the flip side, agreement to allow domestic subsidies to support climate‐friendly goods and technologies might have positive climate change impacts, though the wider long‐term impacts of any increased subsidies would demand careful consideration.
3. The very fact of increased trade, in and of itself, will lead directly to more global GHG emissions from increased transport of goods. The GHG‐intensity of transport varies enormously from marine transport to trucks to air freight, but in the end all modes of transport have some emissions.
4. It is also conceivable that changes in intellectual property rights law could have climate change impacts. Specifically, it is possible that weakening patent protection on climate friendly technologies could have immediate climate benefits, if it led to more widespread dissemination of those technologies. The longer term impacts, however, might be negative if weakened protection discouraged investment and innovation in sectors of promise from a climate change perspective.
Are there existing international agreements that address climate change?
Yes. The following international agreements address climate change:
1. The United Nations Framework Convention on Climate Change (UNFCCC)- This was established on March 21, 1994 to set an overall framework that will address issues on climate change. The convention intends to initiate strategies that will encourage GHG emission reduction and to contribute to the preparation for adaptation to the adverse effects of climate change.
2. Kyoto Protocol- The Kyoto protocol, which was put in force on February 16, 2005, is an international agreement that sets a target reduction of GHG (carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, HFCs, and PFCs) emissions for 37 industrialized countries and European communities starting from 2008 to 2012. Specifically, it requires an average reduction of five percent from the GHG emission recorded in 1990. National targets range from 8% reductions for the European Union and some others to 7% for the US, 6% for Japan, 0% for Russia, and permitted increases of 8% for Australia and 10% for Iceland."
Are these agreements effective in addressing climate change?
The UNFCC is just a framework agreement. As for the Kyoto Protocol, according to Atty. Antonio G.M. La Viña (Dean of the Ateneo School of Government, and Professorial Lecturer at the U.P. College of Law) the same is not a complete success because some of the member countries have failed to meet the agreed targets.
Are there efforts to resolve further the problem of climate change?
Yes. A number of negotiations addressing climate change are on-going. The most recent plan presented was the Bali Road Map, which consists of decisions and future measures against climate change. The Bali Road Map includes the creation of the Ad Hoc Working Group on Long-term Cooperative Action, the long-term goal of emission reduction, mitigation actions, and adaptation funding and cooperations.
What is the Philippines response to climate change?
Philippines has participated in the discussions and negotiations leading to the ratification of various international agreements:
1. United Nations Framework Convention on Climate Change (UNFCCC) ratified on August 2, 1994 and
2. Kyoto Protocol, which was ratified on November 20, 2003.
At the national level, the Medium Term Philippine Development Plan of 2004-2010 (MTDP) underscored the need to manage the environment more effectively in order for the country to address the problem of poverty particularly in the rural areas.
Under the Kyoto Protocol, developing countries such as the Philippines are called to pass and implement national measures that shall advance the international community’s agenda pertaining to environmental preservation through the reduction of greenhouse emissions (GHGs) in the atmosphere. Pursuant to the provisions in this treaty, the Philippines passed national legislations to uphold the agreements embedded in the Kyoto Protocol:
1. The Clean Air Act of 1999, otherwise known as Republic Act 8749, was enacted in order to arrive at an effective air quality management program that will mitigate the worsening problem of air pollution in the country.
2. Reinforcing the country’s drive towards a healthier environment was the enactment of the Solid Waste Management Act of 2000 (RA 9003) that aimed at providing a comprehensive solution to the country’s garbage problem.
At the institutional level, prior to the signing and ratification of the UN Framework Convention on Climate Change, the creation of the Inter-Agency Committee on Climate Change (IACC) in May 8, 1991 under the Environmental Management Bureau of the Department of Environment and Natural Resources (DENR) was a concrete manifestation of the Philippines’ attempt to promptly address the issue of climate change. IACC was created by virtue of Presidential Order No. 220 with the secretary of the DENR sitting as chair and the secretary of the DOST as co-chair.
The ultimate aim of the committee is to harness and synergize the various activities being undertaken by the national government and civil society in response to the crisis posed by growing problem on climate change. The IACC likewise formulates policy actions and recommendations while at the same time assumes a very significant role in terms of shaping the Philippines’ national positions in the various international negotiations that aim to mitigate the effects of global climate change and prevent the worse possible consequences of this.
The IACC therefore ensures the Philippines’ faithful compliance to the mandates and principles contained in the UNFCCC and the Kyoto Protocol and sees to it that adequate public awareness campaign and initiatives are held to bring the issue to all the sectors of the country.
What campaign on international trade can be done to address climate change?
1. Ensure that the country we are dealing with complies with the multilateral environmental agreements to which the country is a party and has in force adequate environmental laws and regulations, has devoted sufficient resources to implementing those laws and regulations, and has an adequate record of enforcement of those laws and regulations;
2. Trade in goods and services- call for the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services.
3. Push for provisions providing for non-actionable subsidies for the environment.
4. Push for provisions that shall provide for the reduction/removal of fossil fuel subsidies.
5. Trade agreements shall include environmental and public safety standard:
The environmental provisions shall—
(A) be included in the core text of the trade agreement;
(B) prohibit each country that is a party to the trade agreement from weakening, eliminating, or failing to enforce domestic environmental or other public health or safety standards to promote trade or attract investment;
(C) require each country that is a party to the trade agreement to implement and enforce fully and effectively, including through domestic law, the country’s obligations under multilateral environmental agreements and provide for the enforcement of such obligations under the trade agreement;
(D) prohibit the trade of goods derived from illegally harvested or extracted natural resources, at any stage of production, including timber and timber products, fish, wildlife, and associated products, mineral resources, and other environmentally sensitive goods; and
(E) allow each country that is a party to the trade agreement to adopt and implement environmental, health, and safety standards, recognizing the legitimate right of governments to protect the environment and public health and safety.
Sources:
1. Aaron Cosby, Trade and Climate Change Linkages, 2007
2. Aaron Cosby, Harnessing Globalization: Scaling Up Trade and Investment Policy’s Contribution to Climate Change Efforts.
3. Agnes Paculdar and Melissa Parreño, The Philippines’ Response to Climate Change, http://www.researchsea.com/html/article.php/aid/3638/cid/6
4. http://www.iisd.org/trade/crosscutting/bali_copenhagen.asp
5. 111th U.S Congress, 1st Session, H.R, 3012: To require a review of existing trade agreements and renegotiation of existing trade agreements based on the review, to set terms for future trade agreements, to express the sense of the Congress that the role of Congress in trade policymaking should be strengthened, and for other purposes.
Showing posts with label ISSUE: Economics. Show all posts
Showing posts with label ISSUE: Economics. Show all posts
Thursday, December 3, 2009
Thursday, April 30, 2009
THE ASEAN TRADE IN GOODS AGREEMENT
What is the ATIGA?
The ASEAN Trade in Goods Agreement (ATIGA) is an improvement over the current ASEAN Free Trade Area-Common Effective Preferential Tariff (AFTA CEPT) Scheme.
- The AFTA CEPT Scheme was focused on tariffs, the main component of which was the schedule for tariff reduction/elimination for trade in goods in ASEAN.
- The ATIGA is akin to a Trade-in-Goods (TIG) chapter of an FTA, which comprises both tariff and non-tariff elements (e.g. trade disciplines on Sanitary and Phytosanitary (SPS) measures, Customs Procedures, and Trade Facilitation, among others).
Why the ATIGA?
The AFTA CEPT Scheme was implemented in 1993. After 15 years, ASEAN has matured in the area of trade-in-goods. Given this, coupled with the changes in business processes and that ASEAN has negotiated and concluded FTAs with several Dialogue Partners, it is timely for the AFTA CEPT scheme to be upgraded, so that ASEAN remains current.
What is the objective of the ATIGA?
The objective of this Agreement is to achieve free flow of goods in ASEAN as one of the principal means to establish a single market and production base for the deeper economic integration of the region towards the realisation of the AEC by 2015.[1]
What are the features of this agreement?
1. Comprehensive coverage- it covers trade-related rules and regulations, including tariff liberalisation, non-tariff barrier liberalisation, rules of origin, trade facilitation, customs procedures, standards and conformance, and Sanitary and Phytosanitary (SPS) measures.
2. Consolidated and streamlined rights and obligations- To have an agreement that is more user-friendly for traders, the ATIGA consolidates all ASEAN’s existing initiatives, obligations and commitments made with regard to intra-ASEAN trade-in-goods into one comprehensive document.
3. Most-favoured nation treatment- if a Member State enters into any agreement with a non-Member State where commitments are more favourable than that accorded under this Agreement, the other Member States have the right to request for negotiations with that Member State to request for the incorporation herein of treatment no less favourable than that provided under the aforesaid agreement. The decision to extend such tariff preference will be on a unilateral basis. The extension of such tariff preference shall be accorded to all Member States.[2]
4. Full tariff reduction schedules- Member States shall eliminate import duties on all products traded between the Member States by 2010 for ASEAN-6[3] and by 2015, with flexibility to 2018, for CLMV[4].[5]
5. Streamlined and unified provisions on modification of concessions and trade remedies- In exceptional circumstances where a Member State faces unforeseen difficulties in implementing its tariff commitments, that Member State may temporarily modify or suspend a concession contained in its Schedules.[6]
6. Trade facilitation and related chapters- The ATIGA has taken into account, and dedicated chapters on Trade Facilitation and for each of the relevant sectors, i.e. (i) customs, (ii) standards, technical regulation and conformity assessment procedures; and (iii) SPS Measures. The ATIGA details disciplines in these areas to ensure clear and consistent application of trade procedures; and establishes formalised contact points of customs authorities to facilitate the resolution of customs-related issues that arise during import/export of goods.
7. Trade repository- An ASEAN Trade Repository containing trade and customs laws and procedures of all Member States shall be established and made accessible to the public through the internet. The ASEAN Trade Repository shall contain trade related information such as (i) tariff nomenclature; (ii) MFN tariffs, preferential tariffs offered under this Agreement and other Agreements of ASEAN with its Dialogue Partners; (iii) Rules of Origin; (iv) non-tariff measures; (v) national trade and customs laws and rules; (vi) procedures and documentary requirements; (vii) administrative rulings; (viii) best practices in trade facilitation applied by each Member State; and (ix) list of authorized traders of Member States.[7]
8. Issuance of Legal Enactments
- ATIGA provides for the issuance of a single legal enactment for the whole tariff reduction schedule
- No later than 90 days for ASEAN 6 and 6 months after entry into force for CLMV.
- Would have retroactive effect from 1 January of the year of entry into force
- In case where single legal enactment cannot be issued, legal enactment would be issued 3 months before tariff reduction takes into effect
What is the status of this agreement?
1. Draft text substantially concluded/legally scrubbed
2. Considered and endorsed by the 22nd AFTA Council, 26 August 2008
3. Signing by 14th ASEAN Summit, February 2009.
What are the concerns of various groups over this agreement?
1. Lack of public consultations- It is required under the Tariff and Customs and under the current set-up of the Committee and Trade Related Matter that before negotiating a trade policy position, public hearings should be made so that the people could register their concerns over a trade agreement. In the negotiation of this agreement, no prior public consultations were made. Public consultations, characterized by lack of transparency, were conducted only after the negotiation has been concluded;
2. The agreement should be submitted to the Senate for ratification given the direction of the agreement towards a legal framework and rules-based system;
3. The agreement should not be in conflict with Philippine domestic laws and international commitments; and
4. Philippines should not accelerate tariff reductions given the fiscal problem that it is facing and given the global financial crisis affecting US and Europe. The timelines for tariff reduction implementation should consider the development needs of the country with a view of revisiting and postponing even the accelerated timetables for zero tariff levels beyond 2010. Under ASEAN-CEPT, tariffs on the remaining 40% shall be eliminated not later than 2010. Accelerating said tariff elimination, ATIGA requires that Import duties of at least 80% tariff lines are eliminated even as early as 2009.
Sources:
1. Association of Petrochemical Manufacturers of the Philippines, Inc. (APMP)
2. ASEAN Economic Ministers 2008: Media Factsheet on ATIGA
3. Department of Trade and Industry
4. Final draft of the ASEAN Trade in Goods Agreement
5. Protocol to Amend the Agreement on the Common Effective Preferential Tariff (CEPT) Scheme for the ASEAN Free Trade Area (AFTA) for the Elimination of Import Duties, 31 January 2003
6. Tariff Commission
Endnotes:
[1] Article 1, ASEAN Trade on Goods Agreement
[2] Article 5, ATIGA
[3] “ASEAN-6” refers to Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and
Thailand.
[4] “CLMV” refers to Cambodia, Lao PDR, Myanmar and Viet Nam.
[5] Article 19, ATIGA
[6] Article 23, ATIGA
[7] Article 13, ATIGA
The ASEAN Trade in Goods Agreement (ATIGA) is an improvement over the current ASEAN Free Trade Area-Common Effective Preferential Tariff (AFTA CEPT) Scheme.
- The AFTA CEPT Scheme was focused on tariffs, the main component of which was the schedule for tariff reduction/elimination for trade in goods in ASEAN.
- The ATIGA is akin to a Trade-in-Goods (TIG) chapter of an FTA, which comprises both tariff and non-tariff elements (e.g. trade disciplines on Sanitary and Phytosanitary (SPS) measures, Customs Procedures, and Trade Facilitation, among others).
Why the ATIGA?
The AFTA CEPT Scheme was implemented in 1993. After 15 years, ASEAN has matured in the area of trade-in-goods. Given this, coupled with the changes in business processes and that ASEAN has negotiated and concluded FTAs with several Dialogue Partners, it is timely for the AFTA CEPT scheme to be upgraded, so that ASEAN remains current.
What is the objective of the ATIGA?
The objective of this Agreement is to achieve free flow of goods in ASEAN as one of the principal means to establish a single market and production base for the deeper economic integration of the region towards the realisation of the AEC by 2015.[1]
What are the features of this agreement?
1. Comprehensive coverage- it covers trade-related rules and regulations, including tariff liberalisation, non-tariff barrier liberalisation, rules of origin, trade facilitation, customs procedures, standards and conformance, and Sanitary and Phytosanitary (SPS) measures.
2. Consolidated and streamlined rights and obligations- To have an agreement that is more user-friendly for traders, the ATIGA consolidates all ASEAN’s existing initiatives, obligations and commitments made with regard to intra-ASEAN trade-in-goods into one comprehensive document.
3. Most-favoured nation treatment- if a Member State enters into any agreement with a non-Member State where commitments are more favourable than that accorded under this Agreement, the other Member States have the right to request for negotiations with that Member State to request for the incorporation herein of treatment no less favourable than that provided under the aforesaid agreement. The decision to extend such tariff preference will be on a unilateral basis. The extension of such tariff preference shall be accorded to all Member States.[2]
4. Full tariff reduction schedules- Member States shall eliminate import duties on all products traded between the Member States by 2010 for ASEAN-6[3] and by 2015, with flexibility to 2018, for CLMV[4].[5]
5. Streamlined and unified provisions on modification of concessions and trade remedies- In exceptional circumstances where a Member State faces unforeseen difficulties in implementing its tariff commitments, that Member State may temporarily modify or suspend a concession contained in its Schedules.[6]
6. Trade facilitation and related chapters- The ATIGA has taken into account, and dedicated chapters on Trade Facilitation and for each of the relevant sectors, i.e. (i) customs, (ii) standards, technical regulation and conformity assessment procedures; and (iii) SPS Measures. The ATIGA details disciplines in these areas to ensure clear and consistent application of trade procedures; and establishes formalised contact points of customs authorities to facilitate the resolution of customs-related issues that arise during import/export of goods.
7. Trade repository- An ASEAN Trade Repository containing trade and customs laws and procedures of all Member States shall be established and made accessible to the public through the internet. The ASEAN Trade Repository shall contain trade related information such as (i) tariff nomenclature; (ii) MFN tariffs, preferential tariffs offered under this Agreement and other Agreements of ASEAN with its Dialogue Partners; (iii) Rules of Origin; (iv) non-tariff measures; (v) national trade and customs laws and rules; (vi) procedures and documentary requirements; (vii) administrative rulings; (viii) best practices in trade facilitation applied by each Member State; and (ix) list of authorized traders of Member States.[7]
8. Issuance of Legal Enactments
- ATIGA provides for the issuance of a single legal enactment for the whole tariff reduction schedule
- No later than 90 days for ASEAN 6 and 6 months after entry into force for CLMV.
- Would have retroactive effect from 1 January of the year of entry into force
- In case where single legal enactment cannot be issued, legal enactment would be issued 3 months before tariff reduction takes into effect
What is the status of this agreement?
1. Draft text substantially concluded/legally scrubbed
2. Considered and endorsed by the 22nd AFTA Council, 26 August 2008
3. Signing by 14th ASEAN Summit, February 2009.
What are the concerns of various groups over this agreement?
1. Lack of public consultations- It is required under the Tariff and Customs and under the current set-up of the Committee and Trade Related Matter that before negotiating a trade policy position, public hearings should be made so that the people could register their concerns over a trade agreement. In the negotiation of this agreement, no prior public consultations were made. Public consultations, characterized by lack of transparency, were conducted only after the negotiation has been concluded;
2. The agreement should be submitted to the Senate for ratification given the direction of the agreement towards a legal framework and rules-based system;
3. The agreement should not be in conflict with Philippine domestic laws and international commitments; and
4. Philippines should not accelerate tariff reductions given the fiscal problem that it is facing and given the global financial crisis affecting US and Europe. The timelines for tariff reduction implementation should consider the development needs of the country with a view of revisiting and postponing even the accelerated timetables for zero tariff levels beyond 2010. Under ASEAN-CEPT, tariffs on the remaining 40% shall be eliminated not later than 2010. Accelerating said tariff elimination, ATIGA requires that Import duties of at least 80% tariff lines are eliminated even as early as 2009.
Sources:
1. Association of Petrochemical Manufacturers of the Philippines, Inc. (APMP)
2. ASEAN Economic Ministers 2008: Media Factsheet on ATIGA
3. Department of Trade and Industry
4. Final draft of the ASEAN Trade in Goods Agreement
5. Protocol to Amend the Agreement on the Common Effective Preferential Tariff (CEPT) Scheme for the ASEAN Free Trade Area (AFTA) for the Elimination of Import Duties, 31 January 2003
6. Tariff Commission
Endnotes:
[1] Article 1, ASEAN Trade on Goods Agreement
[2] Article 5, ATIGA
[3] “ASEAN-6” refers to Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and
Thailand.
[4] “CLMV” refers to Cambodia, Lao PDR, Myanmar and Viet Nam.
[5] Article 19, ATIGA
[6] Article 23, ATIGA
[7] Article 13, ATIGA
Philippine Perspective: Legal Issues and Objections to the ASEAN-Australia-New Zealand FTA
1. The agreement provides no assurance in the facilitation of trade in goods.
Chapter 6, Standards, Technical Regulations and Conformity Assessment Procedures, provides that nothing in this Chapter shall limit the right of a Party to prepare, adopt and apply standards, technical regulations and conformity assessment procedures only to the extent necessary to fulfill a legitimate objective. Such legitimate objectives are, inter alia, national security requirements; the prevention of deceptive practices; protection of human health or safety; animal or plant life or health; or the environment.
What is the limitation to this provision? What common standards shall be observed?
In interpreting the provisions of the agreement, it appears that parties have the right to adopt their own standards, technical regulations and conformity assessment procedure. Parties therefore have blanket authority to refuse market access of goods coming from another party on the basis and pretense of independent policy to fulfill legitimate objectives.
2. Contrary to what FTAs should be, the provisions of the AANZFTA in trade in services provide no preference to facilitate the free movement of natural persons of the parties.
Paragraph 3, Article 4, Chapter 9, of the agreement gives parties the right to deny entry of natural persons if they fail to follow immigration prescribed procedures and all the eligibility requirements for entry to the granting party. Article 7, Chapter 9, gives the State the full and wide discretion to discriminate the entry of natural persons by not preventing the Parties from applying measures to regulate the entry of natural persons of another Party into, or their temporary stay in, its territory, provided that such measures are not applied in such a manner as to nullify or impair the benefits accruing to another Party under said Chapter or to unduly impair or delay trade in goods or services or the conduct of investment activities under this Agreement.
As to what are considered nullification or impairment of the benefits under the Agreement, or unduly impairing or delaying trade in goods or services or the conduct of investment activities, are not clearly defined in said agreement. It only provides that the sole fact of requiring persons to meet eligibility requirements prior to entry to a Party shall not be regarded as nullifying or impairing benefits accruing to another Party, or of unduly impairing or delaying trade in goods or services or the conduct of investment activities under this Agreement.
3. The Agreement may directly violate investment provisions of the Constitution relating to acquisition and ownership of land, use of marine resources and the extraction and exploitation of natural resources.
Investment provisions of the agreement allow the acquisition and control by an investor of movable and immovable properties, and other property rights subject to reservations to be made by each government (Chapter 11). It also allows any concession to search for, cultivate, extract or exploit natural resources. And it provides for the application of national treatment in the acquisition, control and exploitation of said properties.
What are the limitations to this Chapter? What are the limitations reserved by the Philippine government? As of this moment, the government has not yet produced any reservation list.
In line with this, it is our position that the government shall reserve the following:
a. 1987 Constitution specifically but no limited to Article 12, the National Economy and Patrimony. The government shall reserve specific provisions of Article 12 but not limited to the following:
· Section 2- Natural resources shall not be alienated with the exception of agricultural land. The exploration development and utilization of natural resources shall be under the full control and supervision of the State. The State shall reserve the use and enjoyment of marine wealth exclusively to Filipino citizens.
· Section 3- Private corporation or association may not hold agricultural lands except by lease for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof by purchase, homestead or grant. And taking into account the requirements of conservation, ecology, and development, and subject to the requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the public domain which may be acquired, developed, held, or leased and the conditions therefor.
· Section 5- The State, subject to the provisions of this Constitution and national development policies and programs, shall protect the rights of indigenous cultural communities to their ancestral lands to ensure their economic, social, and cultural well-being. The Congress may provide for the applicability of customary laws governing property rights and relations in determining the ownership and extent of ancestral domain.
· Section 10- The Congress shall reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos. In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos. The State shall regulate and exercise authority over foreign investments within its national jurisdiction and in accordance with its national goals and priorities.
b. Philippine domestic laws specifically but not limited to the following:
· RA 8371, Indigenous Peoples’ Rights Act
· RA 7042 as amended by RA 8179, Foreign Investment Act
· Foreign Investment Negative List
· RA 7652, Investors’ Lease Act
4. As regards provisions on intellectual property rights, the agreement obliges a party to be bound to a number of international agreements on IPR even if they are not a signatory to said IPR international agreements.
Basic is the principle in law that contracts are binding only those who are privy to said contracts. Therefore, obligation arising from contracts cannot be enforce against parties who are not privy to said contracts.
Chapter 13 of the agreement, allows a party, who is a signatory to other international agreements on IPR, to seek other parties to support its implementation. Said IPR international agreements are as follows:
(a) the Patent Cooperation Treaty 1970; (Philippines is a signatory)
(b) the Strasbourg Agreement Concerning the International Patent Classification 1971; (Philippines is not a signatory)
(c) the Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the Purposes of Patent Procedure 1977; (Philippines is a signatory)
(d) the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks 1989; (Philippines is not a signatory)
(e) the Patent Law Treaty 2000; (Philippines is not a signatory)
(f) the International Convention for the Protection of New Varieties of Plants 1991; (Philippines is not a signatory)
(g) the TRIPS Agreement; (Philippines is a signatory)
(h) the Singapore Treaty on the Law of Trademarks 2006; (Philippines is not a signatory)
(i) the WIPO Copyright Treaty 1996; and
(j) the WIPO Performances and Phonograms Treaty 1996.
5. The agreement defines Intellectual Property Rights by including rights in plant varieties. This provision is inimical to the interests of farmers who have inherent rights as breeders of plants since time immemorial.
By including National Treatment provisions on intellectual property, laws such as RA 9168 or the Plant Variety Protection Act of 2002 will now be extended to parties under the AANZFTA. Thus, creating a monopoly on the development of seeds by transnational corporations.
6. The agreement sets limitation on the state’s power of taxation. The Chapter 15 provides that the agreement shall only grant rights or impose obligations with respect to taxation measures where:
(a) corresponding rights and obligations are also granted or imposed under the WTO Agreement;
(b) they are granted or imposed under Article 8 (Transfers) of Chapter 11 (Investment); or
(c) they are granted or imposed under Article 9 (Expropriation and Compensation) of Chapter 11 (Investment).
Parties are therefore not allowed to impose taxation measures outside these provisions.
Chapter 6, Standards, Technical Regulations and Conformity Assessment Procedures, provides that nothing in this Chapter shall limit the right of a Party to prepare, adopt and apply standards, technical regulations and conformity assessment procedures only to the extent necessary to fulfill a legitimate objective. Such legitimate objectives are, inter alia, national security requirements; the prevention of deceptive practices; protection of human health or safety; animal or plant life or health; or the environment.
What is the limitation to this provision? What common standards shall be observed?
In interpreting the provisions of the agreement, it appears that parties have the right to adopt their own standards, technical regulations and conformity assessment procedure. Parties therefore have blanket authority to refuse market access of goods coming from another party on the basis and pretense of independent policy to fulfill legitimate objectives.
2. Contrary to what FTAs should be, the provisions of the AANZFTA in trade in services provide no preference to facilitate the free movement of natural persons of the parties.
Paragraph 3, Article 4, Chapter 9, of the agreement gives parties the right to deny entry of natural persons if they fail to follow immigration prescribed procedures and all the eligibility requirements for entry to the granting party. Article 7, Chapter 9, gives the State the full and wide discretion to discriminate the entry of natural persons by not preventing the Parties from applying measures to regulate the entry of natural persons of another Party into, or their temporary stay in, its territory, provided that such measures are not applied in such a manner as to nullify or impair the benefits accruing to another Party under said Chapter or to unduly impair or delay trade in goods or services or the conduct of investment activities under this Agreement.
As to what are considered nullification or impairment of the benefits under the Agreement, or unduly impairing or delaying trade in goods or services or the conduct of investment activities, are not clearly defined in said agreement. It only provides that the sole fact of requiring persons to meet eligibility requirements prior to entry to a Party shall not be regarded as nullifying or impairing benefits accruing to another Party, or of unduly impairing or delaying trade in goods or services or the conduct of investment activities under this Agreement.
3. The Agreement may directly violate investment provisions of the Constitution relating to acquisition and ownership of land, use of marine resources and the extraction and exploitation of natural resources.
Investment provisions of the agreement allow the acquisition and control by an investor of movable and immovable properties, and other property rights subject to reservations to be made by each government (Chapter 11). It also allows any concession to search for, cultivate, extract or exploit natural resources. And it provides for the application of national treatment in the acquisition, control and exploitation of said properties.
What are the limitations to this Chapter? What are the limitations reserved by the Philippine government? As of this moment, the government has not yet produced any reservation list.
In line with this, it is our position that the government shall reserve the following:
a. 1987 Constitution specifically but no limited to Article 12, the National Economy and Patrimony. The government shall reserve specific provisions of Article 12 but not limited to the following:
· Section 2- Natural resources shall not be alienated with the exception of agricultural land. The exploration development and utilization of natural resources shall be under the full control and supervision of the State. The State shall reserve the use and enjoyment of marine wealth exclusively to Filipino citizens.
· Section 3- Private corporation or association may not hold agricultural lands except by lease for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof by purchase, homestead or grant. And taking into account the requirements of conservation, ecology, and development, and subject to the requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the public domain which may be acquired, developed, held, or leased and the conditions therefor.
· Section 5- The State, subject to the provisions of this Constitution and national development policies and programs, shall protect the rights of indigenous cultural communities to their ancestral lands to ensure their economic, social, and cultural well-being. The Congress may provide for the applicability of customary laws governing property rights and relations in determining the ownership and extent of ancestral domain.
· Section 10- The Congress shall reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos. In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos. The State shall regulate and exercise authority over foreign investments within its national jurisdiction and in accordance with its national goals and priorities.
b. Philippine domestic laws specifically but not limited to the following:
· RA 8371, Indigenous Peoples’ Rights Act
· RA 7042 as amended by RA 8179, Foreign Investment Act
· Foreign Investment Negative List
· RA 7652, Investors’ Lease Act
4. As regards provisions on intellectual property rights, the agreement obliges a party to be bound to a number of international agreements on IPR even if they are not a signatory to said IPR international agreements.
Basic is the principle in law that contracts are binding only those who are privy to said contracts. Therefore, obligation arising from contracts cannot be enforce against parties who are not privy to said contracts.
Chapter 13 of the agreement, allows a party, who is a signatory to other international agreements on IPR, to seek other parties to support its implementation. Said IPR international agreements are as follows:
(a) the Patent Cooperation Treaty 1970; (Philippines is a signatory)
(b) the Strasbourg Agreement Concerning the International Patent Classification 1971; (Philippines is not a signatory)
(c) the Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the Purposes of Patent Procedure 1977; (Philippines is a signatory)
(d) the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks 1989; (Philippines is not a signatory)
(e) the Patent Law Treaty 2000; (Philippines is not a signatory)
(f) the International Convention for the Protection of New Varieties of Plants 1991; (Philippines is not a signatory)
(g) the TRIPS Agreement; (Philippines is a signatory)
(h) the Singapore Treaty on the Law of Trademarks 2006; (Philippines is not a signatory)
(i) the WIPO Copyright Treaty 1996; and
(j) the WIPO Performances and Phonograms Treaty 1996.
5. The agreement defines Intellectual Property Rights by including rights in plant varieties. This provision is inimical to the interests of farmers who have inherent rights as breeders of plants since time immemorial.
By including National Treatment provisions on intellectual property, laws such as RA 9168 or the Plant Variety Protection Act of 2002 will now be extended to parties under the AANZFTA. Thus, creating a monopoly on the development of seeds by transnational corporations.
6. The agreement sets limitation on the state’s power of taxation. The Chapter 15 provides that the agreement shall only grant rights or impose obligations with respect to taxation measures where:
(a) corresponding rights and obligations are also granted or imposed under the WTO Agreement;
(b) they are granted or imposed under Article 8 (Transfers) of Chapter 11 (Investment); or
(c) they are granted or imposed under Article 9 (Expropriation and Compensation) of Chapter 11 (Investment).
Parties are therefore not allowed to impose taxation measures outside these provisions.
Wednesday, September 24, 2008
This house would nationalize oil distribution.
OUTLINE
Background:
President Hugo Chávez announced a measure to nationalize wholesale gasoline distribution in Venezuela—despite the lobbying of British Petroleum, Exxon Mobil and Chevron, whose local subsidiaries currently control the business. Under the measure, which received initial approval in the National Assembly Aug. 27, the state company PDVSA will control Venezuela's fuel distribution network, although privately owned gas stations will not be nationalized. Dominated by Chávez allies, the National Assembly is expected to give its final approval to the legislation soon. (http://ww4report.com/node/5962)
Many countries are considering the need to nationalize oil distribution.
Pros
1. To secure fuel supply and to solve oil crisis.
2. Prices could be lower if oil is traded between governments and not through private companies. “Service contracts for supplying oil usually involve private companies. And these companies profit from it. (Carmelito Tatlonghari, a climate change expert and former Energy Program Manager of the United States Agency for International Development (USAID) )
3. Oil giants are a clear and present danger to democracy and need to be put under state control. In an era of oil scarcity we no longer have the luxury of allowing a handful of corporate plutocrats to decide the fate of the global economy. (MIKE WHITNEY)
Cons
1. Legislation could cause fuel shortages, because the government is not prepared to take full control over distribution.
2. We’d be creating a false foundation for the economy. In effect, we’d be subsidizing petroleum use; the artificially low price would encourage more consumption at a time when conservation is necessary. (Jay Bookman)
3. In economic terms, it would send a false price signal. You simply can’t run the world’s biggest economy on heavily subsidized energy. Not for long, anyway. (Jay Bookman)
Background:
President Hugo Chávez announced a measure to nationalize wholesale gasoline distribution in Venezuela—despite the lobbying of British Petroleum, Exxon Mobil and Chevron, whose local subsidiaries currently control the business. Under the measure, which received initial approval in the National Assembly Aug. 27, the state company PDVSA will control Venezuela's fuel distribution network, although privately owned gas stations will not be nationalized. Dominated by Chávez allies, the National Assembly is expected to give its final approval to the legislation soon. (http://ww4report.com/node/5962)
Many countries are considering the need to nationalize oil distribution.
Pros
1. To secure fuel supply and to solve oil crisis.
2. Prices could be lower if oil is traded between governments and not through private companies. “Service contracts for supplying oil usually involve private companies. And these companies profit from it. (Carmelito Tatlonghari, a climate change expert and former Energy Program Manager of the United States Agency for International Development (USAID) )
3. Oil giants are a clear and present danger to democracy and need to be put under state control. In an era of oil scarcity we no longer have the luxury of allowing a handful of corporate plutocrats to decide the fate of the global economy. (MIKE WHITNEY)
Cons
1. Legislation could cause fuel shortages, because the government is not prepared to take full control over distribution.
2. We’d be creating a false foundation for the economy. In effect, we’d be subsidizing petroleum use; the artificially low price would encourage more consumption at a time when conservation is necessary. (Jay Bookman)
3. In economic terms, it would send a false price signal. You simply can’t run the world’s biggest economy on heavily subsidized energy. Not for long, anyway. (Jay Bookman)
Monday, August 4, 2008
Philippines "Down Under": Negotiating the ASEAN-Australia-New Zealand FTA
A number of treaties are now being negotiated by the government in its effort to promote trade liberalization. One of these is the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) that is expected to be concluded by the end of the year. Surprisingly, different Non-government Organizations got said information not from Philippine agencies but from the information available in the websites of New Zealand and Australia.
We’ve learned that this agreement will be comprehensive in nature and it will cover liberalization of investment, government procurement, competition policy and trade facilitation which will result to an unfair agreement as it threatens to eliminate the remaining powerful tools the Philippines still have in order to protect and develop its own domestic industries. The negotiation also seeks to eliminate all forms of barriers to trade including preferences given to Filipinos. The agreement seeks to give access to Australian and New Zealand miners the right to explore, develop and utilize Philippine natural resources as the agreement seek to give national treatment to these two countries.
New Zealand and Australia are demanding no limitation on the schedule of trade in services. The services offers of New Zealand and Australia seek 100% ownership and control of foreign investment opportunities in the Philippines which is against the pertinent provisions of Philippine laws. No 100 % ownership and control is allowed under Philippines laws in advertising services, public utilities, practice of engineering, architecture and mining, the practice of law, accountancy, and environmental planning, agriculture, fisheries, forestry, and education which are the services interests of the two foreign countries.
Question is, are consultations to domestic stakeholders being made by the government? How come that our government cannot provide said information about the negotiation if New Zealand and Australia can?
In the recent decision of the Supreme Court in AKBAYAN vs. Aquino in the disclosure of the JPEPA, the Supreme Court said that diplomatic negotiations are recognized as privilege in this jurisdiction. Only after a consideration of the context in which the claim is made may it be determined if there is a public interest that calls for the disclosure of the desired information, strong enough to overcome its traditionally privileged status.
What will warrant a strong public interest to overcome the privileged status of diplomatic negotiations? Based from said decision, it can be viewed that strong public interests can be shown only by those whose functions involve the right to be involved in treaty-negotiation. If we will study our law, and based on the decision, it says that negotiation is the sole power of the President. If that is the case, will there ever be a situation that other people will be involved in treaty-negotiations?
In light of the negotiation of the AANZFTA, what will happen now to the people’s right to participate at all levels of social, political and economic decision-making? How do we build a strong showing of need that will overcome the privileged status of diplomatic negotiations? How do we do effective and reasonable participation during the negotiation of treaties such as the AANZFTA?
We’ve learned that this agreement will be comprehensive in nature and it will cover liberalization of investment, government procurement, competition policy and trade facilitation which will result to an unfair agreement as it threatens to eliminate the remaining powerful tools the Philippines still have in order to protect and develop its own domestic industries. The negotiation also seeks to eliminate all forms of barriers to trade including preferences given to Filipinos. The agreement seeks to give access to Australian and New Zealand miners the right to explore, develop and utilize Philippine natural resources as the agreement seek to give national treatment to these two countries.
New Zealand and Australia are demanding no limitation on the schedule of trade in services. The services offers of New Zealand and Australia seek 100% ownership and control of foreign investment opportunities in the Philippines which is against the pertinent provisions of Philippine laws. No 100 % ownership and control is allowed under Philippines laws in advertising services, public utilities, practice of engineering, architecture and mining, the practice of law, accountancy, and environmental planning, agriculture, fisheries, forestry, and education which are the services interests of the two foreign countries.
Question is, are consultations to domestic stakeholders being made by the government? How come that our government cannot provide said information about the negotiation if New Zealand and Australia can?
In the recent decision of the Supreme Court in AKBAYAN vs. Aquino in the disclosure of the JPEPA, the Supreme Court said that diplomatic negotiations are recognized as privilege in this jurisdiction. Only after a consideration of the context in which the claim is made may it be determined if there is a public interest that calls for the disclosure of the desired information, strong enough to overcome its traditionally privileged status.
What will warrant a strong public interest to overcome the privileged status of diplomatic negotiations? Based from said decision, it can be viewed that strong public interests can be shown only by those whose functions involve the right to be involved in treaty-negotiation. If we will study our law, and based on the decision, it says that negotiation is the sole power of the President. If that is the case, will there ever be a situation that other people will be involved in treaty-negotiations?
In light of the negotiation of the AANZFTA, what will happen now to the people’s right to participate at all levels of social, political and economic decision-making? How do we build a strong showing of need that will overcome the privileged status of diplomatic negotiations? How do we do effective and reasonable participation during the negotiation of treaties such as the AANZFTA?
Friday, May 23, 2008
What should be the Basis for Assessing the Impact of Trade Agreements?
Envisioned Regional Trade Agreements and Bilateral Trade Agreements[1]
By: Arnel D. Mateo[2]
In order to assess the impact of an impending trade agreement, it is a must that we know how regional trade agreements and how bilateral trade agreements should operate. The rules provided for by the World Trade Organization provide flexibilities which can be utilized by the developing worlds. These rules are reflected in the Uruguay Round, in the Doha Declarations and in the succeeding WTO rounds.
By: Arnel D. Mateo[2]
In order to assess the impact of an impending trade agreement, it is a must that we know how regional trade agreements and how bilateral trade agreements should operate. The rules provided for by the World Trade Organization provide flexibilities which can be utilized by the developing worlds. These rules are reflected in the Uruguay Round, in the Doha Declarations and in the succeeding WTO rounds.
Here is an outline of how Regional Trade Agreements and Bilateral Trade Agreements should be which are geared toward economic development and alleviation of poverty. Entering into Regional Trade Agreements and Bilateral Trade Agreements is supposed to be the best way of negotiating trade between Developed Countries and Developing Countries.
I. An RTA or BTA…
..Must be WTO Compliant:
1. At initial stages, a level of flexibility is needed in eliminating/reducing tariff and non-tariff barriers to promote economic development of developing countries, to protect infant industries and to serve as source of government revenue. (GATS5, GATT28).
I. An RTA or BTA…
..Must be WTO Compliant:
1. At initial stages, a level of flexibility is needed in eliminating/reducing tariff and non-tariff barriers to promote economic development of developing countries, to protect infant industries and to serve as source of government revenue. (GATS5, GATT28).
2. RTAs/BTAs must provide increase market access with enabling clauses. Enabling clauses allow giving of favorable treatment to imported goods coming from developing countries.
3. Must provide transitional time periods for development.[3] The WTO Rules generally provide a 10 year transition period before a developing country could fully eliminate or remove its tariff and non-tariff barriers.
4. Must cover substantially all trade except sensitive sectors. (GATT24) Although full liberalization is the objective to increase competitiveness of industries, sensitive industries may be excluded in order to protect the crucial sectors of the State.
5. Must not have more restrictive measures than third party trade. A State or a region cannot restrict its trade base on sensitivity of the industry by excluding some of its sectors if the same has been opened to a third party. (ex. EU-ASEAN vs. EU-US on Airlines)
..Must protect developing countries domestic interest: Developing countries must be allowed to adopt or implement strategic trade policies or selective industrial trade policies that were utilized by the present industrialized countries.
6. Government subsidies for domestic and export for developing countries must be allowed at initial stages. Although this is discouraged for it will defeat the essence of full liberalization and will lower down efficiency of domestic industries, the same can be done during the initial stages of trade in an effort to protect infant industries.
..Must protect developing countries domestic interest: Developing countries must be allowed to adopt or implement strategic trade policies or selective industrial trade policies that were utilized by the present industrialized countries.
6. Government subsidies for domestic and export for developing countries must be allowed at initial stages. Although this is discouraged for it will defeat the essence of full liberalization and will lower down efficiency of domestic industries, the same can be done during the initial stages of trade in an effort to protect infant industries.
7. Must liberalize market access by imposing less restrictive rules of origin.[4] Setting lower content threshold for developing countries will avoid tariff discrimination.
8. Must incorporate special safeguards on agricultural products. It allows temporary application of an additional duty on top of applied tariffs in cases of import volume surges or import price falls.[5]
..Must involve a Process that engages the sectors:
9. There must be a clear trade policy agenda and institutional accountability. Direction must be set as to what concessions can be made and what cannot. Institutional framework must be transparent so as to clearly define the responsibilities of our trade negotiating team.
10.Must be constitutional. The RTA or BTA must be in line with the States’ national economy and patrimony principles.
11. Must recognize people’s right to effective and reasonable participation as well as right of access to information. An impending trade agreement can only be assessed by the stakeholders if negotiation exchanges are made available to them.
II. Before entering an RTA or BTA…
1. Policy makers have to consider which of their industries are ready to deal with international competition.
2. Determine if the products are along the country’s comparative advantage or if these are being produced by firms that realized economies of scale in production.
3. Policy makers must identify if these industries have ready access to infrastructures and that the educational system is able to produced skilled labor force over the next ten years or so.
4. Expenditures on social services must be made available.
5. There must be functioning financial system that will provide credit to domestic industries.
6. Government must extend support for technology, production management, organization, marketing, etc.
7. Government must provide market incentives, and
8. There must be State intervention.
Tuesday, May 20, 2008
WTO Principles: Foundation of Multilateral Trading System
International trade law is very important for us to understand in this era of globalization. To fully understand how it works, we basically need to understand how multilateral trading system operates.
Taking WTO as the model, it is important for us to know the principles that govern the economic activity of each nation with one another.
Trade without discrimination
1. Most-favoured-nation (MFN) : treating other people equally. Under the WTO agreements, countries cannot normally discriminate between their trading partners. Grant someone a special favour (such as a lower customs duty rate for one of their products) and you have to do the same for all other WTO members.
2. National treatment: Treating foreigners and locals equally. Imported and locally-produced goods should be treated equally — at least after the foreign goods have entered the market. The same should apply to foreign and domestic services, and to foreign and local trademarks, copyrights and patents.
Freer trade- barriers coming down through negotiation
Predictability- foreign companies, investors and governments should be confident that trade barriers (including tariffs and non-tariff barriers) should not be raised arbitrarily; tariff rates and market-opening commitments are “bound” in the WTO
Promoting fair competition— discouraging “unfair” practices such as export subsidies and dumping products at below cost to gain market share
Encouraging development and economic reform- more beneficial for less developed countries, giving them more time to adjust, greater flexibility, and special privileges.
Source: World Trade Organization
Taking WTO as the model, it is important for us to know the principles that govern the economic activity of each nation with one another.
Trade without discrimination
1. Most-favoured-nation (MFN) : treating other people equally. Under the WTO agreements, countries cannot normally discriminate between their trading partners. Grant someone a special favour (such as a lower customs duty rate for one of their products) and you have to do the same for all other WTO members.
2. National treatment: Treating foreigners and locals equally. Imported and locally-produced goods should be treated equally — at least after the foreign goods have entered the market. The same should apply to foreign and domestic services, and to foreign and local trademarks, copyrights and patents.
Freer trade- barriers coming down through negotiation
Predictability- foreign companies, investors and governments should be confident that trade barriers (including tariffs and non-tariff barriers) should not be raised arbitrarily; tariff rates and market-opening commitments are “bound” in the WTO
Promoting fair competition— discouraging “unfair” practices such as export subsidies and dumping products at below cost to gain market share
Encouraging development and economic reform- more beneficial for less developed countries, giving them more time to adjust, greater flexibility, and special privileges.
Source: World Trade Organization
Tuesday, February 5, 2008
Investment treaty: threat to sovereignty, environment
Press Release: Green Party
Investment treaty threat to sovereignty, environment
Investment treaty a threat to sovereignty and environmental standards
The Green Party is calling on Labour to halt discussions on an investment treaty because of the threat the treaty poses to our sovereignty and our environmental standards.
This follows the announcement today that the United States is seriously considering joining negotiations about an investment treaty between the P4 treaty partners of New Zealand, Chile, Singapore and Brunei.
“Investment treaties are the most dangerous parts of free trade agreements. They threaten our sovereignty and our environmental standards,” says Dr. Russel Norman, Green Co-leader and Trade Spokesperson.
“Investment treaties mean that corporations can sue governments if those governments pass laws that reduce the value of a corporation’s investment or future profits.
“If, for example, the New Zealand Government were to pass a law that improved pollution emission standards, with the result that a piece of industrial plant could no longer operate because it couldn’t meet the standards, the corporation that owned that plant could sue the government for the loss of its investment.
“This has already happened in Canada and Mexico under the investment provisions of the North American Free Trade Agreement (NAFTA).
“Under the investment chapter of NAFTA, a US corporation, Metalclad, successfully sued the Mexican Government after Metalclad was blocked from building a toxic waste dump on a community water supply. Metalclad said their investment and future profits had been detrimentally affected.
“The Canadian Government was forced to back down on its ban on the sale of a toxic fuel additive, MMT, because the corporation that manufactured the additive, Ethyl Corp, took at US$250m case against the Canadian Government under the investment provisions of NAFTA. Ethyl claimed that by banning the additive the Canadian Government was seizing its assets - its future profits.
“The world stood up against the Multilateral Investment Agreement (MAI) and stopped it. So now neo-liberal governments around the world are trying to achieve an MAI though the backdoor of bilateral and smaller scale investment agreements.
“Investment treaties threaten our right to regulate environmental standards and should not proceed.”
Investment treaty threat to sovereignty, environment
Investment treaty a threat to sovereignty and environmental standards
The Green Party is calling on Labour to halt discussions on an investment treaty because of the threat the treaty poses to our sovereignty and our environmental standards.
This follows the announcement today that the United States is seriously considering joining negotiations about an investment treaty between the P4 treaty partners of New Zealand, Chile, Singapore and Brunei.
“Investment treaties are the most dangerous parts of free trade agreements. They threaten our sovereignty and our environmental standards,” says Dr. Russel Norman, Green Co-leader and Trade Spokesperson.
“Investment treaties mean that corporations can sue governments if those governments pass laws that reduce the value of a corporation’s investment or future profits.
“If, for example, the New Zealand Government were to pass a law that improved pollution emission standards, with the result that a piece of industrial plant could no longer operate because it couldn’t meet the standards, the corporation that owned that plant could sue the government for the loss of its investment.
“This has already happened in Canada and Mexico under the investment provisions of the North American Free Trade Agreement (NAFTA).
“Under the investment chapter of NAFTA, a US corporation, Metalclad, successfully sued the Mexican Government after Metalclad was blocked from building a toxic waste dump on a community water supply. Metalclad said their investment and future profits had been detrimentally affected.
“The Canadian Government was forced to back down on its ban on the sale of a toxic fuel additive, MMT, because the corporation that manufactured the additive, Ethyl Corp, took at US$250m case against the Canadian Government under the investment provisions of NAFTA. Ethyl claimed that by banning the additive the Canadian Government was seizing its assets - its future profits.
“The world stood up against the Multilateral Investment Agreement (MAI) and stopped it. So now neo-liberal governments around the world are trying to achieve an MAI though the backdoor of bilateral and smaller scale investment agreements.
“Investment treaties threaten our right to regulate environmental standards and should not proceed.”
Friday, September 21, 2007
JPEPA
Notes from Prof. Merlin Magallona’s August 14 Senate Lecture on the
Constitutional and Legal Implications of the JPEPA1
Constitutional and Legal Implications of the JPEPA1
Quotes from Prof. Merlin Magallona
"JPEPA is one of the most atrocious treaties I’ve ever seen."
"Its provisions provide for arrangements which are highly anomalous."
"The JPEPA is a crude intrusion in domestic affairs."
General Observations:
1. "The JPEPA is a step towards the re-integration of Philippine economy into the
Japanese industrial system."
1. "The JPEPA is a step towards the re-integration of Philippine economy into the
Japanese industrial system."
• Japan has a national strategy of relocating its manufacturing industry from mainland Japan to East Asian countries; and now the Southeast Asian countries
• Industrial relocation is preferred instead of the importation of foreign labor. With this strategy, it is now a recorded fact that manufactured goods from its relocated industries exceed the imported goods sourced from non-Japanese producers of other countries.
* The Philippines’ extensive grant of the national treatment principle in the JPEPA raises an important question: if very little preference is extended to the Filipino vis-à-vis the Japanese investors, what is the value of being a Filipino in your own national economy?
2. "The Philippine government will function as an insurance company of the Japanese
investors."
investors."
• Note Article 96 of the JPEPA on the Protection from Strife
Protection from Strife
2. Any payments made pursuant to paragraph 1 above shall be effectively realizable, freely convertible and freely transferable.
Specific observations and legal concerns:
1. Several provisions in the JPEPA prove that the executive branch, in negotiating and concluding the JPEPA, actually exercised non-delegated powers or powers not belonging to the executive branch. Several provisions indicate a blatant usurpation of Congressional Power.
2. It severely restricts the Congressional power of taxation; which one must note is
a plenary power. It restricts the Congress’ legislative powers. The
legislators must be wary of the following provisions found in the JPEPA text:
a plenary power. It restricts the Congress’ legislative powers. The
legislators must be wary of the following provisions found in the JPEPA text:
Article 4: Review of Laws and Regulations: Each Party shall examine the possibility of amending or repealing laws and regulations that pertain to or affect the implementation and operation of this Agreement, if the circumstances or objectives giving rise to their adoption no longer exist or if such circumstances or objectives can be addressed in a less trade-restrictive
manner.
manner.
Article 18: Elimination of other duties (3)
Each Party shall eliminate other duties or charges of any kind imposed on or in connection with the importation of originating goods of the other Party, customs duties of which shall be eliminated or reduced in accordance with paragraph 1 above, if any. Neither Party shall introduce other duties or charges of any kind imposed on or in connection with the importation of those originating goods of the other Party.
Each Party shall eliminate other duties or charges of any kind imposed on or in connection with the importation of originating goods of the other Party, customs duties of which shall be eliminated or reduced in accordance with paragraph 1 above, if any. Neither Party shall introduce other duties or charges of any kind imposed on or in connection with the importation of those originating goods of the other Party.
Article 20: Export Duties
Each Party shall exert its best efforts to eliminate its duties on goods exported from the Party to the other Party.
Each Party shall exert its best efforts to eliminate its duties on goods exported from the Party to the other Party.
3. The Philippines’ extensive grant of national treatment, not only in the trade in goods chapter but also in the investments chapter, collides with Constitutional mandate on the preferential use of Phil products, labor, etc.
4. The Senate must be warned that Article 17 of the JPEPA integrates the GATT. With this provision, all concessions in the JPEPA will accrue to all members of the WTO via the MFN principle.
5. The Senate must be warned of JPEPA’s ability to enlarge Japan’s power of regulation over domestic affairs. All concessions made in favor of other trading partners, if more favourable to concessions made to Japan via the JPEPA, must be also be extended to Japan. Article 132 of the JPEPA provides:
Negotiations on Non-discrimination
In the event that a Party offers a non-Party any advantages of access to its government procurement market or any advantageous treatment concerning the measures regarding government procurement, the former Party shall consent to enter into negotiations with the other Party with a view to extending these advantages or advantageous treatment to the other Party.
Legal Problems in the JPEPA’s investment chapter:
JPEPA’s definition of a Party’s Area, has very dangerous implications. Note that Article 2 defines Area as:
with respect to the Philippines, the national territory as defined in Article I of its Constitution. The term "national territory" also includes the exclusive economic zone and the continental shelf to which the Philippines exercises sovereign rights or jurisdiction in accordance with its laws and regulations and international law;
and with respect to Japan, the territory of Japan, and the exclusive economic zone and the continental shelf with respect to which Japan exercise sovereign rights or jurisdiction in accordance with its laws and regulations and international law;
Note that the JPEPA does not qualify the meaning of the phrase " sovereign rights or jurisdiction." The United Nations Convention on the Law of the Sea provides:
Article56
Rights, jurisdiction and duties of the coastal State in the exclusive economic zone
1. In the exclusive economic zone, the coastal State has:
(a) sovereign rights for the purpose of exploring and exploiting, conserving and managing the natural resources, whether living or non-living, of the waters superjacent to the seabed and of the seabed and its subsoil, and with regard to other activities for the economic exploitation and exploration of the zone, such as the production of energy from the water, currents and winds;
(b) jurisdiction as provided for in the relevant provisions of this Convention with regard to:
(i) the establishment and use of artificial islands, installations and structures;
(ii) marine scientific research;
(iii) the protection and preservation of the marine environment;
(c) other rights and duties provided for in this Convention.
2. In exercising its rights and performing its duties under this Convention in the exclusive economic zone, the coastal State shall have due regard to the rights and duties of other States and shall act in a manner compatible with the provisions of this Convention.
3. The rights set out in this article with respect to the seabed and subsoil shall be exercised in accordance with Part VI.
** Despite the UNCLOS’ limitation of the coastal state’s rights over the exclusive economic zone, the JPEPA opens up the possibility of investments and the exercise of other rights by the Japanese in non-covered areas; on the ground that the EEZ and the continental shelf are defined as part of the national territory as defined in Article 2 of the JPEPA.
What is the binding power of the side agreement on the toxic waste provisions?
Professor Magallona stated that the binding power of the side agreement must be discussed by the Senate. He raised the fact that this so-called side agreement is a product of an exchange of notes (i.e. an executive agreement that requires no Senate concurrence). "This is a very peculiar situation." He also said that the Senate must request for a clarification of the provisions and scope of the side agreement because in its current state, the interpretation of what constitutes toxic wastes seems to depend on the definitions of an unidentified Japanese law.
1 Notes created by IDEALS, Inc. For the Magkaisa Junk JPEPA Coalition
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