Potential for key PH sectors eyed as ASEAN-Japan trade Protocol signed
The Association of Southeast Asian Nations (ASEAN) and Japan successfully signed the First Protocol to Amend the ASEAN-Japan Comprehensive Economic Partnership (AJCEP) Agreement on 02 March 2019 at the sidelines of the 7th RCEP Intersessional Ministerial Meeting in Siem Reap, Cambodia.
The AJCEP is a free trade agreement between the 10-Member States of ASEAN and Japan that entered into force on 01 December 2008. The AJCEP Agreement contained commitments that eliminated and gradually reduced tariffs on products between ASEAN countries and Japan, to encourage the growth of two-way exports and production-sharing arrangements. The Agreement also includes an economic cooperation program to help Parties to maximize the ASEAN-Japan partnership through technical assistance and capacity-building.
A Celebration Ceremony was held to commemorate the signing, which was led by the Philippines’ Department of Trade and Industry Secretary Ramon M. Lopez on behalf of ASEAN Member States, together with Minister Hiroshige Seko of Japan. Both Ministers welcomed this development as a catalyst to further strengthen trade and investment ties between the two regions.
The Protocol incorporates provisions on Trade in Services, Movement of Natural Persons, and Investment into the AJCEP Agreement.
According to Secretary Lopez, “This new development will ensure that Japan continues to be a strong anchor in regional trade. With other initiatives that ASEAN and Japan are engaged in—such as the renewed ASEAN-Japan 10-year Strategic Economic Cooperation Roadmap—Japan remains an important partner of ASEAN in its economic integration agenda.”
“Under the protocol, several key features were agreed on that will facilitate the movement of service suppliers in the region,” Secretary Lopez said.
Filipinos can now be granted short-term to long-term business and investor visas to Japan. Filipino professionals in the fields of natural or human sciences, such as physical sciences, engineering, economics, law, business management and accounting, taxation, or specialists in the field of humanities are also granted of up to five years stay. Entry and temporary stay will also be granted to accompanying spouses and children as “dependents” of any Filipino business persons or professionals given permission to temporarily stay in Japan.
On investments, the provisions are anchored towards promotion, facilitation and protection of investments that will strengthen the economic relationship among the Parties. These will increase the attractiveness of the region and individual ASEAN countries as an investment destination for Japanese businesses, thereby creating more jobs in the region.
Japan is ASEAN’s fourth largest trading partner with total merchandise trade recorded at USD 218 billion in 2017. It is also ASEAN’s second largest source of external FDI, which amounted to USD 13.2 billion during the same period.
The signing of the Protocol is expected to further bolster promotion of PH services exports, FDIs, as well as open opportunities for Filipino professionals in Japan. As of 2017, Japan is the Philippines’ second major trading partner with merchandise trade amounting to USD 21.76 B in 2017. It is also the second highest East Asian country to employ Overseas Filipino Workers recorded at 112,700 in 2017. Approved FDIs was also at USD 634.67 M, with a number of PH companies in sectors such as manufacturing, IT/BPM, Electronic Design Services, PPP Projects, and SME (cluster and supply chain building projects).