Japan, Philippines sign free-trade agreement

HELSINKI (Kyodo) Japan and the Philippines signed a free-trade agreement Saturday that will scrap tariffs on 94 percent of bilateral trade value and allow Filipino nurses and other caregivers to work in Japan.

Prime Minister Junichiro Koizumi and President Gloria Macapagal Arroyo signed the FTA ahead of the two-day Asia-Europe Meeting that starts Sunday in Helsinki.

The FTA is the first for the Philippines and the fourth for Japan, which has signed pacts with Singapore, Mexico and Malaysia. The arrangement with the Philippines is the first for Japan that features provisions on the movement of labor.

The two leaders said in a joint statement at the signing ceremony that the two countries will "promote the development of our economies which will bring about prosperity and stability to both of our countries and help lay the foundations for building an East Asian community."

The accord is expected to take effect by the end of 2007 after ratification by each nation's legislatures. The number of Filipino nurses, caregivers and nursing-care trainees to be accepted by Japan will be determined later. At present, it is estimated that hundreds will be allowed to work in Japan.

Japanese officials said the Diet may take up bills on the treaty during an extraordinary session scheduled to start Sept. 26.

The two countries struck the basic FTA accord in November 2004, but negotiations to translate that agreement into a final treaty became bogged down mainly over how many Filipino workers Japan will accept and details on the liberalization of Manila's auto and steel sectors, the officials said.

The unstable political situation in the Philippines also helped prolong the FTA process, they added.

Under the FTA, a limited number of Filipino nurses and caregivers who meet certain qualifications designated by Manila will be allowed to work in Japan, on condition they pass Japanese examinations or graduate from specified training facilities in Japan.

Those who fail to pass the exams within three to four years will be required to return home, but successful applicants will be able to obtain three-year, renewable work permits.

To keep the negotiations moving forward, Japan ended up making concessions on the auto sector, the officials said.

The two countries finally agreed to put off the date for the Philippines to scrap import tariffs on Japanese vehicles from the originally agreed timing, they said.

Manila had said it would immediately abolish tariffs on vehicles with an engine displacement of more than 3,000cc, but the deadline for the removal of tariffs was set for 2010 instead.

For cars with a smaller engine capacity, the tariff end-date had been 2010 but was renegotiated to 2009 after a gradual tariff reduction in the Philippines.

The FTA also covers trade in services, investment, trade facilitation measures and the protection of intellectual property rights.

The accord is projected to push up Japan's gross domestic product by as much as 0.03 percent and the Philippines' by up to 3.03 percent, according to a bilateral panel.