WORLD TRADE  
ORGANIZATION  WT/REG257/1 
19 March 2010 
 (10-1490) 
Committee on Regional Trade Agreements  
  
 
   
 
 
FACTUAL PRESENTATION 
 
Economic Partnership Agreement  
between  
Japan and the Philippines 
(Goods and Services) 
 
Report by the Secretariat 
 
 
 
 This report, prepared for the considera tion of the Economic Partnership Agreement 
between Japan and the Philippines has been drawn up by the WTO Secretariat on its 
own responsibility and in full consultation with the Parties.  The report has been 
drawn up in accordance with the rules and pr ocedures contained in the Decision for a 
Transparency Mechanism for Regiona l Trade Agreements (WT/L/671).  
 Any technical questions arising from this report may be addressed to Ms Juneyoung Lee (tel: +41 22 739 6791).  WT/REG257/1 
 Page iii 
 
 
  TABLE OF CONTENTS 
 
  Page 
I. TRADE ENVIRONMENT 1  
A. MERCHANDISE TRADE  1  
B. TRADE IN SERVICES AND INVESTMENT  5  
II. CHARACTERISTIC ELEMENTS OF THE AGREEMENT 9  
A. BACKGROUND INFORMATION  9  
III. TRADE IN GOODS 10  
A. IMPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  10  
1. General provisions 10  
2. Liberalization of trade and tariff lines 11  
3. Japan's liberalization schedule 12  
4. The Philippines' liberalization schedule 16  
5. Tariff-rate quotas 20  
(a) Japan 20  
(b) The Philippines 20  
B. RULES OF ORIGIN  21  
C. EXPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  22  
D. REGULATORY PROVISIONS ON TRADE IN GOODS  22  
1. Standards 22  
(a) Sanitary and phytosanitary measures 22  
(b) Technical barriers to trade 22  
2. Safeguard mechanisms 23  
(a) Global safeguards 23  
(b) Bilateral safeguards 23  
(c) Special safeguards 24  
(d) Balance of payments safeguards 24  
3. Anti-dumping and countervailing measures 24  
4. Subsidies and state-aid 24  
5. Customs-related procedures 24  
IV. TRADE IN SERVICES AND INVESTMENT 24  
A. SCOPE AND DEFINITIONS  24  
B. DENIAL OF BENEFITS  26  
C. GENERAL PROVISIONS  26  
1. Market access 26  
2. National and MFN treatment 26  
3. Commercial presence 27  
4. Movement of natural persons 27  
(a) Nurses, certified careworkers or other natural persons in related 
activities 29  
D. COMMITMENTS ON TRADE IN SERVICES  30  
1. Japan 30  
(a) Horizontal co mmitments 30  
(b) Sector specific commitments 31  
 
 WT/REG257/1 
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  2. The Philippines 33  
(a) Horizontal co mmitments 33  
(b) Sector specific commitments 34  
E. REGULATORY PROVISIONS ON TRADE IN SERVICES  36  
1. Domestic regulation 36  
2. Recognition 36  
3. Monopolies and exclusive service suppliers 37  
4. Safeguard measures 37  
5. Transparency/list of non-conforming measures 37  
F. NON-CONFORMING MEASURES ON INVESTMENT  37  
1. Japan 37  
2. The Philippines 39  
G. REGULATORY PROVISIONS ON INVESTMENT  39  
1. Prohibition of performance requirements 39  
2. Environment and labour 40  
3. Other provisions 40  
V. GENERAL PROVISIONS OF THE AGREEMENT 41  
A. TRANSPARENCY  41  
B. EXCEPTIONS  41  
C. ACCESSION AND TERMINATION  41  
D. INSTITUTIONAL FRAMEWORK  41  
E. DISPUTE SETTLEMENT  42  
F. RELATIONSHIP WITH OTHER AGREEMENTS CONCLUDED BY THE PARTIES  43  
G. GOVERNMENT PROCUREMENT  44  
H. INTELLECTUAL PROPERTY  45  
I. OTHERS  46 
1. Competition 46  
2. Improvement of the Business Environment 46  
ANNEX I 47 
ANNEX II 52 
 
  WT/REG257/1 
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  I. TRADE ENVIRONMENT 
1. The Economic Partnership Agreement (EPA) betw een Japan and the Philippines (hereinafter 
referred to as "the Agreement") is Japan's sixth's free trade agreement (FTA) with an Asian country 
belonging to the ASEAN (following its FTAs with  Singapore, Malaysia, Thailand, Indonesia and 
Brunei Darussalam).  The EPA is the Philippines's first bilateral FTA. 
2. The economies of the Parties are considerably di fferent in size and trade profiles.  In 2008 
Japan's GDP was estimated at US$4,909 billion whil e that of the Philippines was US$166.9 billion.  
With total merchandise exports of US$782 billion and imports of US$762.5 billion, Japan was the 
world's the fourth largest exporter and importer in 2008 compared to the Philippines ranking at 
56th and 46th exporter and importer (its merchandi se exports were US$49 billion and imports 
US$60.2 billion).  In commercial services also, while Japan ranked sixth and fourth in terms of 
exports and imports, (US$146.4 b illion and US$167.4 billion resp ectively), the Philippines ranked 
51st and 57th exporter and importer (exports at US$10.1 billion and imports at US$8.5 billion).  Their 
trade to GDP ratios averaged over 2006-2008 were  85.1 for the Philippines and 34.3 for Japan.1   
A. MERCHANDISE TRADE  
3. In 2008 Japan was the Philippines's second largest export market (15.7% of exports by the 
Philippines) and source of imports (11.8% of its  imports) for goods.  The Philippines was Japan's 
18th largest export market (1.3% of Japan's exports) and 21st largest source of imports (1.1% of its 
imports).2 
4. Recent developments in global and intra-Party trade are presented in Charts I.1 and I.2.  Over 
the period surveyed (1998-2008), Japan ran a consiste nt trade surplus both on a global basis and with 
the Philippines.  Imports from the Philippines have  tended to grow on average over the period while 
export growth has been less steady.  The Philippi nes has run a consistent deficit in its global 
merchandise trade since 2000 as well as in its bilateral trade with Japan except for in 2006-2008 when 
it registered a surplus.  
 
 
 
                                                      
1 WTO Statistics Database, Trade Profiles (October 2009). 
2 UNSD, Comtrade database (2008). WT/REG257/1 
Page 2  
 
  0100200300400500600700800
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20080510152025US$billion US$billionChart I.1 - Japan: Merchandise imports from and exports to world 
and the Philippines, 1998-2008
Source : UNSD, Comtrade database.Imports from the Philippines
Exports to the PhilippinesTotal imports
Total exportsLeft hand scale: Right hand scale:
 
 
 
010203040506070
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008051015202530US$billion US$billionChart I.2 - The Philippines: Merchandise imports from and exports 
to world and Japan, 1998-2008
Source : UNSD, Comtrade database.Imports from Japan
Exports to JapanTotal imports
Total exportsLeft hand scale: Right hand scale:
 
 
 
  WT/REG257/1 
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  5. The commodity structure of trade between the Par ties, as well as of their imports and exports 
to the world in the period of 2005-2007, is shown in Chart I.3 on the basis of the Harmonized System (HS) sections. 
6. Japan's four largest export product categori es – machinery, vehicles, base metals, and 
chemicals – made up 78.9% of its total exports  in 2005-2007 and accounted for 57.5% of the 
Philippines' imports from Japan;  a key difference is  vehicle exports which make up almost a quarter 
of Japan's exports to the world but only 4% of the Philippines imports from Japan, while minerals 
account for a significant share of its imports (16.5%) from Japan.  The Philippines' four largest export product categories – machinery, textiles, vehicles,  and base metals – made  up 68.5% of its total 
exports in 2005-2007 and accounted for 64.3% of Japan's imports  from the Philippines.  Other major 
imports from the Philippines were minerals (8.2% of its imports from the Phili ppines) and vegetables 
(7.8%).  WT/REG257/1 
Page 4  
 
  Chart I.3
Japan and Philippines: product compos ition of merchandise trade, annual 
average 2005-2007
Japan's imports from Philippines Philippines' imports from Japan
Source:  UNSD, Comtrade database.Per cent
Total:  US$8.1 billion Total:  US$7.8 billion
Total:  US$572 billion Total: US$53.9 billion
Total:  US$652 billion Total:  US$46.4 billionJapan's global exports Philippines' global exportsJapan's global imports Philippines' global imports Vehicles 2.3
Machinery
43.5
Vehicles 3.5
Textiles 5.1Chemicals 7.0Plastics 2.7
Machinery
39.4Other 
9.8Other 
18.1
Base metals 8.1Base metals 5.4
Textiles 5.0
Plastics 4.5
Machinery 
55.4 Plastics 2.7
Vehicles 24.4Vegetables 1.8Other
9.4Other 
13.8
Chemicals 1.4Other 
13.8Vehicles 4.0Machinery 43.5
Vehicles 4.2Minerals 31.0
Machinery 21.3Animals 3.5
Chemicals  6.4Prepared foods 3.3Vegetables 2.8Plastics 2.3
Base metals 5.5Textiles  2.4Articles of wood 2.1Other 
6.9
Minerals  16.5Prepared foods 2.7
Animals 1.4Chemicals  5.5
Base metals 3.8Machinery 55.2
Vegetables 7.8Articles of wood 3.6Optical 2.7
Minerals 8.2Optical 1.7
Optical 4.2Miscellaneous 2.2
Base metals 4.5Vehicles 4.0Optical 1.7
Vegetables 2.7
Optical 5.6Plastics 2.2Animals 1.8
Base metals 4.5
Chemicals 5.5
Textiles 1.3Minerals 16.5Prepared foods 2.7Vegetables 2.7Textiles  2.4
Minerals 3.4Prepared foods 2.1Optical 1.9Articles of wood  1.4Textiles 1.4
 
  WT/REG257/1 
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  B. TRADE IN SERVICES AND INVESTMENT3 
7. With respect to commercial services, in 2008 the Philippines was Japan's 12th largest export 
market and 12th largest source of import (respectively 1.1% and 1.2% of Japan' exports and imports).4  
Chart I.4 shows the breakdown of commercial servi ces trade for Japan in 1998-2008.  During this 
period, Japan has run a deficit in its global trade in commercial services.  However, while exports 
have risen steadily and especially since 2002, impor ts stagnated up to 2003 since when they have 
shown stronger growth.  The main contributors to  exports of services during this period were 
transportation and other business services, while th e main contributors to imports of services were 
transportation and travel services.   These sectors accounted for almost 59.2% of services exports and 
53.9% of imports in 2008. 
 
0102030405060708090100110120130140150160170180
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
20080102030405060708090100110120130140150160170180
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008Chart I.4
Japan, total commercial services trade, 1998-2008
Exports Imports
Transportation services
Travel services
Sourc e: IMF, BOP CD-Rom.Communications servicesUS$ billion
Construction servicesFinancial services
Computer and information services
Royalties and license Other business services
Personal and cultural services
Government servicesUS$ billion
 Insurance services
Note:     Exports of insurance services were ne gative in the following years: 1999 (US$ -80million),
              2001 (US$ -100 million), and 2002 (US$ -380 million).
 
 
                                                      
3 The exchange rate used for converting data in Japanese Yen to US dollars in this section was: 
107.77 Yen per US dollar (2000), 121.53 (2001), 125.39 (2002), 115.93 (2003), 108.19 (2004), 110.22 (2005), 116.30 (2006), 117.75 (2007), and 103.36 (2008). 
4 WTO International Trade Statistics, 2008. WT/REG257/1 
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  8. Chart I.5 shows the breakdown of commercial services trade for the Philippines in 1999-2007 
which has run an overall trade surplus in these servic es since 2004.  Travel services continue to be its 
largest exports with a significant share accounted fo r by government services .  Imports have been 
dominated mainly by transportation services. 
03691215
1999
2000
2001
2002
2003
2004
2005
2006
200703691215
1999
2000
2001
2002
20032004
2005
2006
2007Chart I.5
The Philippines, total commercial services trade, 1999-2007
Exports Imports
Transportation services
Travel services
Sourc e: IMF, BOP CD-Rom.Communications servicesUS$ billion
Construction servicesFinancial services
Computer and information services
Royalties and license Other business services
Personal and cultural services
Government servicesUS$ billion
 Insurance services
Note:    No data on exports of government services in 2006.
 
 
 9. Chart I.6 shows Japan's bilateral commercial serv ices trade with the Philippines in 2005-2007.  
Transportation services, construction services, and royalties and license fees were the largest categories in terms of exports of commercial serv ices, while transportation services, travel services, 
and construction services were the largest in terms of imports.  WT/REG257/1 
 Page 7 
 
 
  0.05.010.015.020.0
2005 2006 20070.05.010.015.020.0
2005 2006 2007Chart I.6
Japan, bilateral commercial services trade with the Philippines, 2005-2007
Exports Imports
Transportation services
Travel services
Source: WTO Secretariat estimates  based on data provided by Japan.Communications servicesUS$ million
Construction servicesFinancial services
Computer and information services
Royalties and license Other business services
Government servicesUS$ million
 Insurance services
Personal and cultural services
 
 
10. Japan's global investment position is depicted in  Chart 1.7.  With outward investment of 
almost US$600 billion in 2008, Japan remains an importa nt net provider of investment to the world.  
In comparison its stock of inward FDI was around three times less than outward FDI stock at US$178 billion in 2008.   
 
 WT/REG257/1 
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  050100150200250300350400450500550600650
2000 2001 2002 2003 2004 2005 2006 2007 2008050100150200250300350400450500550600650
2000 2001 2002 2003 2004 2005 2006 2007 2008Chart I.7 
Japan inward and outward foreign direct investment stock from  world, 2000-2008
Inward Outward
Source : WTO Secretariat estimates based on data at http://www.boj.or.jp/en.US$ billion US$ billion
 
 
 
11. Chart I.8 shows Japan's inward and outward stoc k of FDI with the Philippines over the period 
2000-2008.  In keeping with its global FDI position, Jap an is a significant investor in the Philippines.  
Its FDI stock in the Philippines was US$6.8 billion accounting for 1.1% of its total outward FDI in 
2008.  In contrast, inward investme nt from the Philippines is relativel y low and has remained constant 
over this period at between US$40 million and US$53 million.  WT/REG257/1 
 Page 9 
 
 
  0.00.10.20.30.40.50.60.70.80.91.0
2000 2001 2002 2003 2004 2005 2006 2007 20080.00.51.01.52.02.53.03.54.04.55.05.56.06.57.0
2000 2001 2002 2003 2004 2005 2006 2007 2008Chart I.8 
Japan inward and outward foreign direct  investment stock with Philippines, 
2000-2008
Inward Outward
Source : WTO Secretariat estimates based on data at http://www.boj.or.jp/en.US$ billion US$ billion
 
 
 II. CHARACTERISTIC ELEMENTS OF THE AGREEMENT 
A. B
ACKGROUND INFORMATION  
12. The Agreement was signed by the Parties on 9 September 2006 and entered into force on 11 
December 2008. 
13. The goods and services aspects of the Agreement were notified to the WTO by the Parties on 
11 December 2008 under Article XXIV:7(a) of th e GATT 1994, and Article V:7(a) of the GATS, 
respectively (document WT/REG/257/N/1 and S/C/N/470) .  The text of the Agreement is available, 
together with its related Annexes, on the following official websites: 
Japan:   http://www.mofa.go.jp/policy/economy/fta/philippines.html  
Philippines:  http://www.dti.gov.ph/dti/index.php?p=629 
 
    WT/REG257/1 
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  14. The Agreement is composed of 16 Chapte rs and has related Annexes, as follows: 
Box II.1:  Composition of the Agreement  
Chapters, Annexes and Letters Title/description 
Preamble  
Chapter 1 General Provisions 
Chapter 2 Trade in Goods 
Annex 1 referred to in Chapter 2 Sc hedules in relation to Article 18 
Chapter 3 Rules of Origin 
Annex 2 referred to in Chapter 3 Product Specific Rules 
Annex 3 referred to in Chapter 3 Minimum Da ta Requirement for Certificate of Origin 
Chapter 4 Customs Procedures 
Chapter 5 Paperless Trading 
Chapter 6 Mutual Recognition 
Annex 4 referred to in Chapter 6 Sect oral Annex in relation to Article 61 
Chapter 7 Trade in Services 
Annex 5 referred to in Chapter 7 Financial Services 
Annex 6 referred to in Chapter 7 Schedule of Specific Commitments a nd List of Most-Favoured-Nation 
Treatment Exemptions 
Chapter 8 Investment 
Annex 7 referred to in Chapter 8 Reserva tions for Existing and Future Measures 
Chapter 9 Movement of Natural Persons 
Annex 8 referred to in Chapter 9 Specific Comm itments for the Movement of Natural Persons 
Chapter 10 Intellectual Property 
Chapter 11 Government Procurement 
Chapter 12 Competition 
Chapter 13 Improvement of the Business Environment 
Chapter 14 Cooperation 
Chapter 15 Dispute Avoidance and Settlement 
Chapter 16 Final Provisions 
Source : Economic Partnership Agreement between Japan and the Philippines.  
 
 
III. TRADE IN GOODS 
A. IMPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  
1. General provisions 
15. Each Party accords national treatment to the goods from the other Party in accordance with 
Article III of the GATT 1994 (Article 17). 
16. The Parties agree to eliminate or reduce cust oms duties on originating goods as scheduled in 
Annex 1 of the Agreement (Article  18.1).  Annex 1 contains the following categories relating to tariff 
liberalization between the Parties: i) immediate elim ination of customs duties from the date of entry 
into force of the Agreement (category A);  ii) pr ogressive elimination of customs duties (categories 
B3, B4, B4*, B4**, B5, B5*, B5**, B7, B10, B10*, B10**, B15, and 'S with notes 4-5, and 7-10' for the Philippines);  iii) combination of progressive reduction and stand-still in  either 2013 or 2018 in 
accordance with notes specific to Jap an's schedule (category P), and combination of reduction and 
negotiation in accordance with note 6 for the Phili ppines (category S with note 6);  iv) tariff-rate  WT/REG257/1 
 Page 11 
 
 
  quotas (categories Q for Japan and 'S with note 2' for the Philippines);  and v) future negotiations 
(category R)5;  products in category X are excluded from any tariff concessions.   
17. Tariff reductions take place on the date of entr y into force of the Agreement, with the 
exception of categories B5*, B10*, and B10** (the se categories concern only the Philippines) for 
which tariff reductions take place either on the sec ond year (2009) or the seventh year (2014).  Apart 
from the first year (11 December 2008 – 31 Marc h 2009) subsequent a nnual reductions for all 
categories with few exceptions6 take place on 1 April of each year (Article 7, Part 1, Annex 1).  No 
overall implementation period is explicitly stated in the Agreement.  However, the Parties' schedules 
of concessions on trade in goods foresee an implemen tation period of ten year for the Philippines and 
15 years for Japan from the date of the entry into force of the Agreement. 
2. Liberalization of trade and tariff lines 
18. Trade in goods under the Agreement is classified under the 2002 nomenclature of the 
Harmonized System (HS) (Article 4, Part 1, Annex 1). 
19. The overall tariff elimination under the Agreem ent is depicted in Tables III.1.A-B.  
Table III.1.A shows duty elimination in terms of tari ff lines and trade, as applied by Japan to imports 
from the Philippines.  Before the entry into for ce of the Agreement, 3,714 tariff lines (41.7% of 
Japan's tariff) were already duty-free on an MFN basis.7  Upon entry into force of the Agreement, an 
additional 3,598 tariff lines (40.4% of the tariff) b ecame duty-free for import from the Philippines;  as 
a result, 82.1% of Japan's tariff lines became duty-free corresponding to 90% of imports by value from the Philippines.  The remaining tariffs are to be progressively eliminated in six additional stages 
starting in 2011 and ending in 2023.  By 2018, af ter ten years of implementation, a further 728 lines 
are to become duty-free (8.1% of the tariff lines) amo unting to 1.3% of the value of imports from the 
Philippines.  By the end of implementation in 2023,  90.9% of tariff lines and 91.2% imports by value 
from the Philippines will be duty-free. 
Table III.1 
Tariff elimination commitments under the Agreement and corresponding average trade 
A.  Japan 
Duty phase-out 
period Number of lines % of total lines in 
Japan's tariff schedule Value of Japan's imports 
from Philippines  
(2004-2006) 
in million US$ % of Japan's total 
imports from 
Philippines 
2004-2006 
MFN duty free 
(2008) 3,714 41.7 6,220.4 80.9 
2008-2010 3,598 40.4 699.8 9.1 
2011-2012 4 0.0 0.3 0.0 
2013-2014 175 2.0 60.5 0.8 
2015-2016 171 1.9 6.0 0.1 
2017 1 0.0 0.0 0.0 
2018-2022 377 4.2 32.3 0.4 
Table III.1 (Cont'd)  
                                                      
5 The Parties confirm that category R is pursuant to  Article 18.2, however, the Article does not only 
refer to category R.  Therefore, other categories may also  be subject to negotiations under the Article aiming for 
further liberalization. 
6 For category B4, the final elimination takes place on  1 January 2010 (Article 1.(c).(ii), Part 1 of 
Annex 1).  In addition, for category S which concerns on ly the Philippines, the date of tariff reduction varies 
according to the notes in Part 3 of Annex 1.  
7 Japan's MFN tariff schedule in the year of entr y into force of the Ag reement (2008) comprised 
8,890 tariff lines at the HS 9-digit level;  93.4% of this tariff is ad valorem, 2.3% relates to lines with specific 
duties;  0.6% relates to compound tariff lines;  3.7% relates to mixed tariff lines, and 0.2% to others.  For 
compound and mixed lines, only the ad valorem  component is taken into account in the calculation of averages. WT/REG257/1 
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  Duty phase-out 
period Number of lines % of total lines in 
Japan's tariff schedule Value of Japan's imports 
from Philippines  
(2004-2006) 
in million US$ % of Japan's total 
imports from 
Philippines 
2004-2006 
2023 58 0.7 0.1 0.0 
Remain dutiable 814 9.1 673.3 8.8 
Total 8,912 100.0 7,692.6 100.0 
 
Note: Based on the HS 2002 nomenclature.  Calculati ons exclude tariff lines having an in-quota rate. 
 
Source:  WTO estimates based on data provided by Japan. 
 
20. Table III.1.B shows the Philippines' duty eliminati on in terms of tariff lines and trade, applied 
to Japan.  Before the entry into force of the Agreement, 307 tariff lines (3.7% of the Philippines' 
tariff) were already duty-free on an MFN basis.8  Upon entry into force of the Agreement, an 
additional 4,762 tariff lines (57.4% of the tariff) became duty-free for import from Japan;  as a result, 
61.1% of the Philippines' tariff lines became duty-free corresponding to 71% of imports by value from 
Japan.  The remaining tariffs are to be progressively  eliminated in nine additional stages starting in 
2009 and ending in 2018.  On 2018, after ten years of implementation, a further 3,115 lines are to become duty-free (37.5% of the tariff lines) amounting to 26.2% of the value of imports from Japan.  By the end of implementation in 2018, 98.6% of tariff lines and 97.1% of imports by value from Japan will be duty-free. 
Table III.1 
Tariff elimination commitments under the Agreement and corresponding average trade 
B.  The Philippines 
Duty phase-out 
period Number of lines % of total lines in 
Philippines' tariff 
schedule Value of Philippines' 
imports from Japan 
(2005-2007) 
in million US$ % of Philippines' total 
imports from Japan  
2005-2007 
MFN duty free 
(2008) 307 3.7 2,892.0 43.6 
2008 4,762 57.4 1,815.6 27.4 
2009 4 0.0 0.8 0.0 
2010 72 0.9 72.8 1.1 
2011 64 0.8 35.4 0.5 
2012 3 0.0 23.4 0.4 
2013 944 11.4 575.3 8.7 
2014 2 0.0 0.0 0.0 
2015-2016 2 0.0 0.0 0.0 
2017 141 1.7 2.4 0.0 
2018 1,883 22.7 1,025.6 15.5 
Remain dutiable 115 1.4 189.7 2.9 
Total 8,299 100.0 6,632.9 a 100.0 
a Only trade falling under HS Chapter 1-97 is included. 
Note: Based on the HS 2007 nomenclature. 
 
Source:   WTO estimates based on data provide d by the Philippines and the WTO-IDB. 
 
3. Japan's liberalization schedule 
21. Table III.2 shows Japan's tariff elimination commitment vis-à-vis the Philippines by 
HS section product categories.  Of the 3,598 tariff lines liberalized upon entry into force of the 
Agreement, more than half fall under HS section XI  (textiles) while the others are distributed across 
the other HS sections with a majority falling unde r HS section VI (chemicals).  Of the 814 lines 
retaining a duty at the end of the implementation pe riod, the vast majority fall under HS sections I to 
                                                      
8 The Philippines' MFN tariff schedule in the year  of entry into force of  the Agreement (2008) 
comprised 8,299 tariff lines at the HS 8-digit level;  100% of this tariff is ad valorem .  WT/REG257/1 
 Page 13 
 
 
  IV.  The overall average tariff in 2023 on the lines re maining dutiable will be 19.2% with the highest 
rates for footwear (25.8%) and prepared foods (23.3%).   
Table III.2 
Japan:  Tariff elimination under the Agreement, by HS section 
Number of duty-free lines  
HS section  MFN 
avg.
% Total 
No. of 
lines  MFN 
2008  
2008-2010  
2011-2012  
2013-2014  
2015-2016  
2017  
2018-2022  
2023  
No. of lines 
remaining 
dutiable  
Avg. final tariff 
(dutiable)  
I Live animals and animal 
products 8.4 508 109 60 1 69 25  4  240 15.3a 
II Vegetable products 6.1 526 165 142  38 35  39 12 95 20.5a 
III Animal or vegetable 
fats and oils 3.8 85 20 21  6   2 2 34 14.8a 
IV Prepared foods etc. 16.4 761 77 56 3 43 70  133 44 335 23.3a 
V Minerals 0.5 219 166 27  7   18  1 - 
VI Chemicals and 
chemical products 2.3 1,034 403 620  1 1  3  6 13.2a 
VII Plastics and rubber 2.4 296 103 170  6   17    
VIII Hides and skins 10.4 196 66 3   32 1 66  28 17.7  
IX Wood and articles 3.4 233 83 72  3   37  38 6.6 
X Pulp, paper etc. 0.0 172 172          
XI Textiles and textiles 
articles 6.5 2,058 86 1,966       6 - 
XII Footwear, headgear 16.3 111 6 26   4  44  31 25.8 
XIII Articles of stone 1.1 160 100 59     1    
XIV Precious stones, etc. 1.3 80 58 17     5    
XV Base metals and base 
metals products 0.9 842 604 230  2   6    
XVI Machinery 0.1 959 945 14         
XVII Transport equipment 0.1 147 146 1         
XVIII Precision equipment 0.2 294 285 6   3      
XIX Arms and ammunition 6.9 24  24         
XX Misc. manufactured 
articles 1.7 200 113 84   1  2    
XXI Works of art, etc. 0.0 7 7          
Total 4.8 8,912 3,714 3,598 4 175 171 1 377 58 814 19.2 
 
Note: Based on the HS 2002 nomenclature;  for  tariff lines subject  to TRQs only the out-of-quota duty is included in the tarif f-related 
calculations. 
a Combination of ad valorem  and specific duties. 
- Specific duty. 
 
Source:  WTO estimates based on data provided by Japan. 
 
22. The 814 tariff lines that will remain dutiable at the end of the implementation period (2023) 
include products: i) excluded from liberalization (c ategory X) (522 tariff lines, mainly HS chapters 
3-4, 11, 19 and 21);  ii) subject to future negotiati on (category R) (248 tariff lines, mainly HS chapters 
2-3, 15-16 and 44);  iii) subject to progressive duty reduction up to 2013 or 2018 (category P) 
(29 tariff lines, mainly HS chapters 16, and 19 -21);  iv) subject to TRQs (11 tariff lines, 
HS chapters 2, 16-17 and 21);  and v) under other mixed categories9, for example, fresh bananas 
which are subject to seasonal duties (four tariff lines, HS chapters 8, 17 and 22).  Chart III.1 below 
shows the breakdown of these products.  
                                                      
9 Such mixed categories are: A/P (220600229);  B10/P (080300100);  and Q/X (080430010 and 
170111110). WT/REG257/1 
Page 14  
 
  Chart III.1 
Japan's Composition of Lines Remaining Dutiable
Excluded (Cate gory X) 
(64.1 %)
TRQs
(1.4 %)
Category P
(3.6 %)
Source :  WTO estimates based on data provided by Japan.Subject to Negotiations 
(Category R)
(30.5 %)
Mixed Categories 
(0.5 %)
 
 
 
23. Chart III.2 shows a comparison of average du tiable rates in those HS sections where 
preferential duties remain at the end of the implem entation period.  The comparison is made between 
the average preferential and MFN rates for lines subject to preferential duties only.  For those 
HS sections where tariff peaks remain after impl ementation of the Agreement is completed, the 
preferential duties are identical to the MFN duties for HS sections I, III, VI, VIII, IX and XII, whereas 
the preferential duties are lower than the MFN duti es for HS sections II and IV.  The average applied 
MFN rate in 2008 for HS sections II and IV was 21.1%  (compared to a preferential rate of 20.5%) and 
23.6% (compared to a preferential rate of 23.3%), respectively. 
  WT/REG257/1 
 Page 15 
 
 
  0 5 10 15 20 25 30XXIXXXIXXVIIIXVIIXVIXVXIVXIIIXIIXIXIXVIIIVIIVIVIVIIIIIIChart III.2
Japan:  Average of dutiable rates, by HS Section
HS Section  
Note: For tariff lines with non ad valorem components, only the ad valorem part of alternate rates are included in the calculati on.
Source :  WTO Secretariat estimates, based on data provided by Japan.Average rate of duty (%)
MFN Preferential
 
 
24. Chart III.3 shows a comparison of average du tiable rates in those HS chapters where 
preferential duties remain at the end of the implem entation period.  The comparison is made between 
the average preferential and MFN rates for lines subject to preferential duties only.  For those 
HS chapters where tariff peaks remain after impl ementation of the Agreement is completed, the 
preferential duties are to be identical to the MFN duti es for HS chapters 1-3, 10, 12, 15, 17, 22-24, 29, 
35, 41-44, and 64, whereas the preferential du ties will be lower than the MFN duties for 
HS chapters 4, 7-8, 11, 16, and 18-21. WT/REG257/1 
Page 16  
 
  05101520253035404550
1
2
3
47
8
1011
12
1516
17
1819
20
2122
23
2405101520253035404550
25
29
35
41
42
43
44
50
64Chart III.3
Japan: Average of dutiable rates, by HS Chapter
HS  01-24 HS 25-97Average rate of duty (%)  
Average rate of duty (%)  
HS Chapter HS Chapter
MFN Preferential**
Note: For tariff lines with non ad valorem  components, only the ad valorem  part of alternate rates are included in the calculation; 
          * HS Chapters 25 and 50 contain specific duties.Source :  WTO Secretariat estimates based on data provided by Japan.
 
 
4. The Philippines' liberalization schedule 
25. Table III.3 shows the Philippines' tariff elimination commitment vis-à-vis  Japan by 
HS section product categories.  Of the 4,762 tariff lines liberalized upon entry into force of the 
Agreement, most fall under HS sections XVI (machine ry), XI (textiles), and VI (chemicals) while the 
others are distributed across the other HS sections.  Of the 115 lines retaining a duty at the end of the implementation period, more than half fall under HS  sections VI (chemicals) and XV (base metals).  
The overall average tariff in 2018 on the lines remain ing dutiable will be 9.8% with the highest for 
vegetable products (47.2%). 
Table III.3 
The Philippines:  Tariff elimination under the Agreement, by HS section 
Number of duty-free lines 
HS section  MFN 
avg.
% Total 
No. of 
lines  MFN 
2008  
2008 
2009 
2010 
2011 
2012 
2013 
2014 
2015-2016 
2017 
2018 
No. of lines 
remaining 
dutiable  
Avg. final tariff 
(dutiable)  
I Live animals and 
animal products 10.6 344  159        28 157   
II Vegetable 
products 10.4 391  170        62 150 9 47.2 
III Animal or 
vegetable fats and oils 7.5 150  79        16 55   
IV Prepared foods 
etc. 11.5 386  74        30 282   
Table III.3 (Cont'd)   WT/REG257/1 
 Page 17 
 
 
  Number of duty-free lines 
HS section  MFN 
avg.
% Total 
No. of 
lines  MFN 
2008  
2008 
2009 
2010 
2011 
2012 
2013 
2014 
2015-2016 
2017 
2018 
No. of lines 
remaining 
dutiable  
Avg. final tariff 
(dutiable)  
V Minerals 2.6 197 3 77   3  109     5 1.0 
VI Chemicals and 
chemical products 3.3 1,098 9 759     209    85 36 4.0 
VII Plastics and 
rubber 7.3 392 2 115     136    123 16 13.1 
VIII Hides and 
skins 7.1 84  39     14 1  1 29   
IX Wood and 
articles 7.3 136 14 62     7    53   
X Pulp, paper etc. 4.8 224  96     42    86   
XI Textiles and 
textiles articles 10.7 928 3 903  2   11    9   
XII Footwear, 
headgear 9.5 63  20     6    37   
XIII Articles of 
stone 7.0 185 2 82  1   12    88   
XIV Precious 
stones, etc. 5.2 75  50     4    21   
XV Base metals 
and base metals products 5.6 825 10 435  2  3 40    286 49 7.0 
XVI Machinery 2.9 1,805 233 1,099  6 61  126 1  4 275   
XVII Transport 
equipment 13.5 427  171 4 60   182    10   
XVIII Precision 
equipment 2.5 339 31 286  1   14    7   
XIX Arms and 
ammunition 13.5 28  1         27   
XX Misc. 
manufactured 
articles 7.1 212  77     30  2  103   
XXI Works of art, 
etc. 7.6 10  8     2       
Total 6.5 8,299 307 4,762 4 72 64 3 944 2 2 141 1,883 115 9.8 
 
Note: Based on the HS 2007 nomenclature;  for tariff lines subj ect to TRQs only the out-of-quota duty is included in the tariff -related 
 calculations.  
Source:  WTO estimates based on data provided by the Philippines and the WTO-IDB. 
 
26. The 115 tariff lines that will remain dutiable at  the end of implementation period (2018) 
include products: i) excluded from liberalization (14 tariff lines in HS Chapters 10 and 25);  ii) subject 
to future negotiations (42 tariff lines in HS Chapte rs 28-29, 35, and 38-39);  iii) subject to TRQs 
(49 tariff lines in HS chapter 72);  and iv) under mixed categories, whose duties are to be partially 
liberalized (ten tariff lines in HS chapters 38 and 39).  Chart III.4 below shows the breakdown of 
these lines. 
 
 
 
   WT/REG257/1 
Page 18  
 
  Chart III.4  
The Philippines' Composition of Lines Remaining Dutiable
Excluded 
(Category X)
(12.2 %)
* Category composition is either A/R or A/B4/R.
Source :  WTO estimates based on data provided by the Philippines.Partial liberalization*
(Mixed Categories)
(8.7 %)
Subject to 
Negotiations 
(Category R)
(36.5 % )TRQ
(Cate gory S with Note 2)  
(42.6 %)
 
 
27. Chart III.5 shows a comparison of average du tiable rates in those HS sections where 
preferential duties remain at the end of the implem entation period.  The comparison is made between 
the average preferential and MFN rates for lines subject to preferential duties only.  For those 
HS sections where tariff peaks remain after impl ementation of the Agreement is completed, the 
preferential duties will be identical to the MFN du ties for HS sections II, V, and XV, whereas the 
preferential duties will be lower than the MFN dut ies for HS sections VI and VII.  The average 
applied MFN rate in 2008 for HS sections VI and V II was 4.3% (compared to a preferential rate of 
4%) and 13.5% (compared to a preferen tial rate of 13.1%), respectively. 
 
  WT/REG257/1 
 Page 19 
 
 
  0 5 10 15 20 25 30 35 40 45 50XXIXXXIXXVIIIXVIIXVIXVXIVXIIIXIIXIXIXVIIIVIIVIVIVIIIIIIChart III.5
The Philippines:  Average of dutiable rates, by HS Section
HS Section  
Source :  WTO Secretariat estimates, based on data provided by the Philippines and the WTO-IDB.Average rate of duty (%)
MFN Preferential
 
 
 28. Chart III.6 shows a comparison of average du tiable rates in those HS chapters where 
preferential duties remain at the end of the implem entation period.  The comparison is made between 
the average preferential and MFN rates for lines subject to preferential duties only.  For those 
HS chapters where tariff peaks remain after impl ementation of the Agreement is completed, the 
preferential duties will be identical to the MFN dut ies for HS chapters 10 (cereals) (over 45%), 25, 
28-29, 35, and 72, whereas the preferential du ties will be lower than the MFN duties for 
HS chapters 38 and 39. 
 
 
 WT/REG257/1 
Page 20  
 
  0 1 02 03 04 05 07239383529282510Chart III.6
The Philippines:  Average of dutiable rates, by HS Chapter
HS Chapter  
Source : WTO Secretariat estimates, based on data provided by the Philippines and the WTO-IDB.Average rate of duty (%)
MFN Preferential
 
 
 
5. Tariff-rate quotas 
(a) Japan 
29. In addition to tariff-rate quotas (TRQs) on an MFN basis, Japan maintains seven TRQs 
schemes for 13 tariff lines10 relating to agricultural products:  meat and edible meat offal (HS 
chapter 2 – four tariff lines);  fresh pineapples (HS chapter 8 – one tariff line);  preparations of meat 
(HS chapter 16 – three tariff lines);  sugars (H S chapter 17 – two tariff lines);  and ice cream 
(HS chapter 21 – three tariff lines).  Details of the quantities and rates applying to these lines are 
given in Table AII.1.  All products under the TRQs  are subject to positive in quota duties except fresh 
pineapples for which the in-quota rate is zero.  Imports above the quota quantity enter at the 
prevailing MFN rates for all products subject to a TR Q.  Pursuant to Article 18.2, these products are 
subject to negotiations aiming at improving market access conditions either in the fourth (sugars) or 
the fifth year (other than sugars). 
(b) The Philippines 
30. In addition to TRQs on an MFN basis, the Philippines maintains one TRQs scheme for 
55 tariff lines under one single HS chapter 72 – iron and steel.  Details of the quantities and rates 
applying to these lines are given in Table AII.2.  The in-quota rates for such pro ducts are all duty-free.  
The out-of-quota rates for six tariff lines have be come zero as a result of the MFN tariff being 
                                                      
10 The 13 tariff lines include 11 tariff lines in category Q and two tariff lines in category Q/X (see 
paragraph 22 and footnote 9 of the Factual Presentation).   WT/REG257/1 
 Page 21 
 
 
  eliminated.  Pursuant to Article 18.2, such produc ts are subject to negotiations aiming at improving 
market access conditions in the third year and every three years thereafter.  The Parties commit to not 
reduce the quota quantity for these products from that in the year when the negotiations take place 
(paragraph 2.(e) of Section 1, Part 3 of Annex 1).  
B. RULES OF ORIGIN  
31. Disciplines regarding rules of origin and custom s procedures are set out in Chapters 3 and 4, 
respectively.  Articles 28-49 deal with the ru les of origin, while Articles 50-56 cover other 
customs-related issues. 
32. The general requirements for a good of a Party to be considered originating (Article 29) is 
that it is: i) wholly obtained or produced entirely in  the Party, as defined in Article 29.2;  ii) produced 
entirely in the Party exclusively from originating mate rials of itself;  or iii) produced entirely in the 
Party using non-originating materials which satisfy  the product specific rules of Annex 2 and other 
applicable requirements of Chapter 3.   
33. Section 2 of Annex 2 sets out specific criteria for non-originating materials to meet so that the 
final product acquires originating status.  In most  cases in Annex 2, origin is granted if the 
non-originating materials have undergone a change  in tariff classification (CTC) on the basis of 
HS chapter, or HS headings or subheadings (i.e. at the four or six-digit level).  Except for those products under HS chapters 1-20, 24, 26, 41-44, 46, and 50-65, in many cases, the rule that no CTC is 
required if there is a qualifying value content of  a minimum of 40% of originating materials, is 
prescribed as an alternative to CTC.  For some products under HS chapters 18 (cocoa and cocoa 
preparations) and 24 (tobacco and manufactured tob acco substitutes), a CTC is applied provided that 
non-originating materials constitute no more than 50% or  30% of weight of the products, respectively.   
34. Annex 2 also contains rules relating to imports  from other member states of the Association 
of South East Asian Nations (ASEAN).  For some agricultural products in HS chapter 20 
(preparations of vegetables, fruit, nuts or othe r parts of plants), the rule provides that all 
non-originating materials used must originate in a no n-Party which is a member state of the ASEAN.  
For some products in HS chapter 50-63 (textiles a nd textiles articles), the technical test required, 
e.g. spinning, dyeing or weaving, may be performed either in one of the Parties or a non-Party which is a member state of the ASEAN. 
35. Bilateral cumulation between the Parties is po ssible (Article 30).  Article 31 establishes a 
de minimis  principle whereby a product is considered to be originating if all non-originating materials 
used in its production that do not undergo an app licable CTC do not exceed specific percentages in 
value, weight or volume of the good.  These pe rcentages are: 10% of the value of goods in 
HS chapters 28-49 and 64-97, and 7% of the weight of goods in HS chapters 50-63, (Section 1.(f), 
Annex 2). 
36. Articles 34-39 define how certain materials ( unassembled or disassembled goods;  fungible 
goods and materials;  indirect materials;  accessories , spare parts and tools;  packaging materials and 
containers or retail sale;  and packing materials a nd containers for shipment) are to be treated/valued 
when determining their origin.  Article 32 contains  a list of non-qualifying operations which do not 
confer origin. 
37. The Parties have established Sub-Committee on Rules of Origin responsible for the 
implementation and operation of  Chapter 3 (Article 49). WT/REG257/1 
Page 22  
 
  C. E
XPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  
38. The Parties shall endeavour to eliminate duties on their exports (Article 20).  Neither Party 
shall introduce or maintain any non-tariff measures on the export, or sale for export, of any good destined for the other Party which are inconsiste nt with its obligations under the WTO Agreement 
(Article 21). 
D. R
EGULATORY PROVISION S ON TRADE IN GOODS  
1. Standards 
(a) Sanitary and phytosanitary measures 
39. The Agreement contains no specific provisi on on sanitary and phytosanitary measures . 
(b) Technical barriers to trade 
40. Chapter 6 on mutual recognition allows the Pa rties to take measures that they consider 
appropriate to protect health, safety or the environm ent or to prevent deceptive practices (Article 66).  
The Chapter does not affect the Parties' rights a nd obligations in the WTO Agreement on Technical 
Barriers to Trade (Article 67.3). 
41. The Chapter applies to the registration of conformity assessment bodies and procedures for 
products or processes covered by Annex 4 on electr ical products.  Annex 4 lists the applicable 
domestic laws, regulations and ad ministrative provisions stipulating electrical products;  technical 
requirements and conformity assessment procedures;  th e criteria for registration;  and the registering 
authorities of each Party.  The list is subject to  modification to reflect any new or additional 
procedures for the same products (Article 69).  The Parties confirm that such modification is 
applicable to conformity assessment procedures, not  to registration of conformity assessment bodies. 
42. Each Party must allow the other Party's regist ered conformity assessment bodies to participate 
in its conformity assessment procedures system a nd accept the results of such conformity assessment 
conducted by the other Party which are pursuant to each Party's laws, regulations and administrative 
provisions.  Such results include certificates of c onformity conducted.  If a license is required by a 
Party in addition to the certificates of conformity, it should not be used as a means to avoid the 
Parties' obligations described in the first senten ce of this paragraph (Article 60).  However, the 
Chapter does not bind the Parties to accep t each others' standards (Article 67.2). 
43. Article 63 details the conduct by the registration authority of a Party of the registration and 
withdrawal of such registration of conformity assessment bodies of the other Party.  The Chapter 
establishes a Sub-Committee, inter alia , to exchange information on standards and conformity 
assessment procedures;  to review the implementati on and operation of the Chapter;  and to examine 
the possibility of negotiating mutual recognition in  additional products or processes (Article 64).11 
                                                      
11 According to the Parties as of December 2009, the Sub-Committ ee on Mutual Recognition had not 
met and there is no negotiation on additional products or processes for mutual recognition.  WT/REG257/1 
 Page 23 
 
 
  2. Safeguard mechanisms 
(a) Global safeguards 
44. The Parties may take measures in accordance with the provisions of Article XIX of 
GATT 1994 and the WTO Agreement on Safeguards (Article 22.11.(a)). 
(b) Bilateral safeguards12 
45. When invoking bilateral safeguards, each Part y shall ensure consistent, impartial and 
reasonable administration of their laws and regul ations governing such me asures (Article 22.8). 
46. As a result of the elimination or reduction of  customs duties under the Agreement, if a good 
originating in one Party is  imported by the other Party in such increased quantities, in absolute terms 
or relative to domestic production, and under such c onditions that the imports constitute "substantial" 
cause of serious injury, or threat thereof, to a domestic industry of the importing Party, it may apply a 
bilateral safeguard measure, to the minimum extent necessary to prevent or re medy the serious injury 
and to facilitate adjustment (Article 22.1).13 
47. After investigation, bilateral safeguards may ta ke the form of i) suspension of the further 
reduction of customs duty on the originating good;  or  ii) increased customs duty to the lesser of the 
applied MFN duty when the safeguard is taken an d on the day immediately preceding the date of 
entry into force of the Agreement (Article 22.1).  The investigation shall be completed within one 
year after its initiation (compared to no specified  period in the WTO Agreement on Safeguards).  
Bilateral safeguards cannot be a pplied to imports within the ta riff-rate quota quantities granted under 
Annex 1 of the Agreement (Article 22.2). 
48. Bilateral safeguards cannot be imposed for more than three years (compared to four years in 
the WTO Agreement on Safeguards), but can be extended up to a maximum period of four years in 
very exceptional circumstances (Article 22.5.(e)).14  The measures must not be applied to goods which 
have already been subject to a bilateral safeguard measure, for a period of time equal to the duration 
of the previous measure or one year, whichever is longer (Article 22.5.(f)). 
49. Although provisional measures may be taken in  critical circumstances where delay would 
cause damage difficult to repair, the customs duty imposed as a result of such measure shall be 
refunded if the subsequent investigation does not determine that increased imports caused or 
threatened to cause serious injury to a domestic i ndustry (Articles 22.4.(a) and (d)).  The time period 
within which the refund should take place is not mentioned in the Agreement.  The duration of 
provisional measure cannot exceed 200 days w ithin the overall period of the safeguard 
(Article 22.4.(c)). 
50. Compensation for proposing to apply or extend a measure shall be provided to the exporting 
Party (compared to the "endeavour" provision in th e WTO Agreement on Safeguards) in the form of 
concessions on customs duties that are substantially equivalent to the value of the additional customs 
duties expected from the measure (Article 22.6.(a)).   If an agreeable compensation cannot be reached 
                                                      
12 The Agreement uses 'emergency measures' to mean  bilateral safeguards.  For consistency purposes 
with other factual presentations, the Factua l Presentation uses 'bilateral safeguards'. 
13 Serious injury is defined in Article 15 as "a significant overall impairment in the position of a 
domestic industry" while threat of serious injury is defined as "serious injury that, on the basis of facts and not 
merely on allegation, conjecture or remo te possibility, is clearly imminent". 
14 Under the WTO Agreement on Safeguards, the maximum period of application of (global) safeguard 
measures is eight years (Article 7.3). WT/REG257/1 
Page 24  
 
  within 30 days from the initiation of consultations  on compensation, the exporting Party can suspend 
the application of concessions of customs duties under the Agreement, only for the minimum period necessary and during the period of the applied measur e (Article 22.6.(b)).  However, the suspension 
by the exporting Party cannot be initiated for th e first 12 months following the imposition of the 
measure, provided that the measure has been taken as a result of an absolute increase in imports and 
that it conforms to the provisions of Article 22 (Artic le 22.6.(c)).  The Parties clarify that in the case 
that the measure has been taken as a result of an increase in imports relative to domestic production, 
the right of suspension may also be exercised by th e exporting Party, provided that all the conditions 
under Article 22 of the Agreement are fulfilled.   
51. If necessary, the Parties shall review the bilateral safeguard provisions ten years after the 
entry into force of the Agreement (11 December 2018) (Article 22.12). 
(c) Special safeguards 
52. The Parties may take measures in accordance w ith the provisions of Article 5 of the WTO 
Agreement on Agriculture (Article 22.11.(b)). 
(d) Balance of payments safeguards 
53. The Parties can take measures for balan ce-of-payments purposes in accordance with 
Article XII;  Section B of Article XVIII of GATT 1994;  the Understanding on the 
Balance-of-Payments of GATT 1994;  and the Agre ement of the International Monetary Fund 
(Article 24).  
3. Anti-dumping and countervailing measures 
54. There are no anti-dumping and countervailing provisions per se  in the Agreement.  However, 
Article 18.4.(b) indicates that the Parties may impose any anti-dumping or countervailing duty which 
is consistent with the provisions of Artic le VI of the GATT 1994, the WTO Agreement on 
Implementation of Article VI of the GATT 1994 and the WTO Agreement on Subsidies and 
Countervailing Measures. 
4. Subsidies and state-aid 
55. The Agreement contains no specific provision on subsidies. 
5. Customs-related procedures 
56. Chapter 4 contains provisions on transparency, customs clearance, and cooperation as regards 
customs procedures.  Article 56 provides for th e establishment of a Sub-Committee on Customs 
Procedures which is responsible for, inter alia , the review of the implem entation and operation of the 
Chapter. 
IV. TRADE IN SERVICES AND INVESTMENT 
A. S
COPE AND DEFINITIONS  
57. A Party's measures affecting trade in services are mainly governed by Chapter 7, which 
covers GATS modes of supply 1 (cross-border), 2 (consumption abroad), 3 (commercial presence), 
and 4 (natural persons) (Article 71.(t)).  Co mmercial presence means any type of business or  WT/REG257/1 
 Page 25 
 
 
  professional establishment, including th rough: i) the constitution, acquisition15 or maintenance of a 
juridical person;  or ii) the creation or maintenance of a branch or a representative office;  within the 
Area of a Party for the purposes of supplying a service (Article 71.(b)).   
58. Chapter 7 does not apply to: i) measures affec ting air traffic rights or measures affecting 
services directly related to the exercise of air traffic rights other than measures affecting aircraft repair 
and maintenance, sales and marketing of air transport services, computer reservation systems;  
ii) cabotage in maritime transport services;  iii) s ubsidies provided by a Party or a state enterprise 
thereof, including grants, government-supported loan s, guarantees and insurance;  iv) measures 
pursuant to immigration laws and regulations;  and v) measures affecting natural persons seeking 
access to the employment market of a Party, or measures regarding national ity or citizenship, or 
residence or employment on a permanent basis (A rticle 70.2).  Financial services are covered by 
Annex 5 which is generally m odelled on the GATS Annex on Financ ial Services.  Section 3 on 
recognition, compared to 3.(a) of the GATS Annex on Financial Services, add itionally indicates that 
the Parties may recognize the prudential measures of any international regulatory body in determining 
how the Parties' measures relating to financial ser vices shall be applied.  Section 5 of the Annex 
provides that the Parties shall objectively examin e applications of any new financial service. 
59. Chapter 8 contains provisions on investment a nd the related Annex 7, following a "negative 
list" approach, schedules existing and future non-conforming measures in  relation to national 
treatment (Article 89), most-favoured nation treatme nt (Article 90), or pr ohibition of performance 
requirements (Article 93).  These Articles do not appl y to the Philippines' existing or future measures 
relating to Japanese investors and their invest ments in services sectors with respect to the 
establishment, acquisition or expansion of investment s (Article 87.4).  The Chapter on investment is 
not construed to expand the scope of specific commi tments by the Parties pursuant to the Chapter on 
trade in services (Article 87.3).  According to the Pa rties, the provision serves to reserve the Parties' 
right to adopt or maintain measures relating to i nvestments in services sectors that are not scheduled 
in the specific commitments of the Chapter on trad e in services, while there is no reservation in the 
same sectors in the Chapter on investment.   
60. The Chapter defines investments as every kind  of asset owned or controlled, directly or 
indirectly, by an investor of a Party;  a non-exhaus tive list of such investment is provided in Article 
88.(b).  Juridical persons are defined as persons duly constituted or otherwise organized under the law 
of a Party with their seat of control or substantia l business activities in the area of that Party (Article 
88.(e)).  In addition, the Agreemen t specifies that a branch of a juridical person of a non-Party, which 
is located in the Area of a Party, will not be regarded as an investor of that Party (Article 88.(c).(ii)).  
"Owned" and "controlled" are defined in both Ch apters on trade in services and investment.16 
61. A Sub-Committee on Trade in Services was establis hed to implement and operate the Chapter 
on trade in services (Article 86).  A Sub-Committee on Investment reviews, inter alia  the 
implementation and operation of the Chapter and reservations in Anne x 7 with a view to reducing or 
eliminating them (Article 106). 
                                                      
15 The Parties confirm that the term 'acquisition' incl udes partial acquisition of equity participation in a 
juridical person supplying a service. 
16 "Owned" by juridical persons if more than 50% of the equity interest in it is owned by such persons 
(Articles 71.(e).(i) and 88.(d).(i));  and "controlled" by juridical persons if such persons have the power to name a majority of its directors or otherwise to legally di rect its actions (Articles 71 .(e).(ii) and 88.(d).(ii)). 
 WT/REG257/1 
Page 26  
 
  B. D
ENIAL OF BENEFITS  
62. A Party may deny the benefits of Chapter 7 or 8 to a service supplier or an investor from the 
other Party and to an investment of such an invest or, respectively if that person is a juridical person 
owned or controlled by persons/investors of a non- Party, and the denying Party does not maintain 
diplomatic relations with the non-Party or adopts or maintains measures with respect the non-Party 
that prohibit transactions with the juridical person or  that would be violated or circumvented if the 
benefits of the Chapter were accorded to the juridical person (Articles 85.1 and 105). 
63. Subject to prior notification and consultation, a Party also may deny the benefits of Chapter 7 
to a service supplier of the other Party if the service is supplied by a juridical person owned or 
controlled by persons of a non-Party, and that has no substantial business activities in the Area of 
other Party (Article 85.2).  However, the provisi on does not apply to maritime transport services 
supplied by a vessel registered under the laws of the other Party. 
C. GENERAL PROVISIONS  
1. Market access 
64. The Chapter on trade in services contains provisions on market access along the lines of 
Article XVI of the GATS, providing that, where sp ecific commitments are undertaken, six types of 
limitations cannot be maintained or adopted by the Parties, unless otherwise specified in their 
schedules (Article 72).  Such provisions do not apply to any measure taken by the Parties with respect 
to government procurement (Article 70.3). 
2. National and MFN treatment 
65. Articles 73 and 76 provide, respectively, for a Party to accord to services and service 
suppliers of the other Party treatment no less favour able than it accords, to its own like services and 
service suppliers (national treatment) and to services and service suppliers of any non-Party.17  These 
MFN treatment obligations apply to all sectors, except for those listed in Part 2 of Annex 6.  Japan has 
inscribed maritime freight forwarding services;  in ternational shipping services (including passenger 
transportation and freight transportation services);  energy services;  and fisheries related services in 
its MFN exemptions list, to the extent of the m easures indicated therein.  The Philippines has listed 
entry and temporary stay of natural persons supplyi ng services for all sectors;  some financial services 
(commercial banking, financing companies, and invest ment houses);  and liner cargo trade services, to 
the extent of the measures indicated therein.  Nati onal treatment applies to those sectors inscribed in a 
Party's schedule of specific commitments in Part 1 of Annex 6, subject to any conditions or limitations set out therein.  Government procurem ent is not subject to national and MFN treatment 
(Article 70.3).  
66. Articles 89 and 90 provide, respectively, for a Party to accord to investors of the other Party 
and to their investments treatment no less favourable th an it accords, in like circumstances, to its own 
investors and their investments (national treatment ) and to investors of any non-Party and their 
investments (MFN treatment), in relation to "i nvestment activities" (establishment, acquisition, 
expansion, management, operation, maintenance, use, possession, liquidation, sale or other disposition 
of investments).  Articles 89 and 90 do not apply to  any measures that a Party adopts or maintains 
regarding government procurement nor to any me asures covered by exceptions to national and MFN 
                                                     
 
17 Article 76 on MFN treatment added the word "in like circumstances" which is not stated in Article II 
of the GATS.  WT/REG257/1 
 Page 27 
 
 
  treatment obligations under the WTO TRIPS Agreem ent (Articles 94.7-8).  The national treatment 
principle also applies to access to the courts of jus tice for investors of the other Party (Article 92). 
3. Commercial presence 
67. The Chapter on trade in services contains no specific provision on commercial presence, 
per se .  The limitations on commercial presence on the subscribed services sectors in the Parties' 
schedules of commitments are summarized under th e section on commitments on trade in services in 
this presentation. 
4. Movement of natural persons 
68. Chapter 9 contains additional provisions on the movement of natural persons, particularly 
categorized as: i) short-term business visitors;  ii) intra-corporate transferees;  iii) investors;  
iv) natural persons engaged in professional services;  v) natural persons enga ged in supplying services 
which require an advanced level of technology or knowledge or which require  specialized skills in 
particular fields of industry on the basis of a contract with public or private organizations;  and vi) natural persons engaged in supplying services  as nurses or certified careworkers or related 
activities, on the basis of a contract with public or private organizations or on the basis of admission 
to public or private training facilities (Article 110).   
69. The Parties indicate that the commitments in Ch apter 7 on trade in services and Chapter 9 on 
the movement of natural persons, do not directly in teract with each other and the Parties can make 
different commitments on the same services sector in  both Chapters.  For instance, it is possible to 
make a commitment on entry and temporary stay u nder Chapter 9 for a natural person of the other 
Party who supplies a specific service without a mode 4 commitment for the same service under 
Chapter 7, and vice versa.  Therefore, a mode 4 commitment indicating "none" in a specific service 
sector under Chapter 7 does not necessarily mean that entry and temporary stay is granted for service 
suppliers in the same sector under Chapter 9.   
70. The Parties grant entry and temporary stay to each others' nationals in accordance with 
Chapter 9 and its related Annex 8 which Annex details the term s and conditions for entry and 
temporary stay of the natural persons covered by the Chapter.  The requirements that each Party 
applies to the movement of other Party's natural pe rsons are summarized in Table IV.1 below.  More 
detailed information on the temporary movement of  nurses, certified careworkers or related activities 
is provided in para graphs 74-76 below. 
Table IV.1 
Specific requirements for the temporary movement of natural pers ons (except nurses, certified careworkers or related activities ) 
 Japan Philippines 
Each Party restricts remuneration by the other Party an d direct sales to the general public or the direct 
supply of services by the provider (Section 1, Parts 1- 2 of Annex 8, respectively). 
Short-term business visitors 
 Japanese natural persons are exempt from 
requirement of Alien Employment Permit issued 
by the Department of Labour and Employment.  
The category is defined in detail by Japan.  For example, Japan requires a bachelor's degree or at least ten years of experience for intra-corporate 
transferees (Section 2, Part 1 of Annex 8).   The definition of the category is general such as 
"a manager, executive or person with specialized technology or knowledge" without indicating the 
level of education or work experiences 
(Section 2, Part 2 of Annex 8).   
Intra-corporate transferees 
 Special permit to practice regulated professions 
or Alien Employment Permit required.   
Both Parties lists the same eligible activities for inve stors of the other Party (Section 3,  Parts 1-2 of 
Annex 8, respectively). 
Investors  Alien Employment Pe rmit required and for 
regulated professions a special permit to practice 
under the laws and regulations of the Philippines is required.  WT/REG257/1 
Page 28  
 
   
Japan Philippines 
Differences in the professional services designated by each Party (Section 4 of Parts 1-2 of Annex 8, 
respectively). 
Natural persons engaged in professional services Five professional services providers listed: i) 
lawyer ("Bengoshi" and "Gaikoku-Ho-Jimu-Bengoshi"); ii) patent attorney ("Benrishi");  iii) 
maritime procedure agent ("Kaijidairishi");  iv) 
accountant ("Koninkaikeishi");  and v) tax accountant ("Zeirishi"). One professional services provider listed, 
"engineer", including chemical, civil, electrical, electronics and communications, geodetic, 
mechanical, metallurgical, mining, or sanitary 
engineer. 
Detailed definition of this category by Japan.  For example, Japan requires a bachelor's degree or at 
least ten years of experience (Section 5, Part 1 of 
Annex 8) The definition of the category is general such as 
"who occupy a technical, advisory or supervisory 
position" without indicating the level of 
education or the work experience required (Section 5, Part 2 of Annex 8).   Natural persons engaged in supplying services, which 
require an advanced level of 
technology or knowledge  or  specialized skills in  
particular fields of industry 
on the basis of a contract with public or private organizations in the other 
Party  Alien Employment Permit is required. 
Source :  Sections 1-5, Parts 1-2, Annex 8 of the Agreement. 
71. The Parties cannot impose or maintain quantita tive restrictions on these services providers 
(Article 110.3).  They, however, maintain the ri ght to ask for a visa from each others' nationals 
requesting entry and temporary stay.  Further, a nati onal of a Party must comply with the other Party's 
immigration laws and regul ations (Article 110.2). 
72. The Parties shall establish and make publicly available the requirements and procedures for 
application to renew the period of temporary stay, change the status of the temporary stay or to issue a 
work permit (Article 111).  The period that natural pe rsons of a Party may stay in the other Party is 
summarized in Table IV.2 below. 
Table IV.2 
Duration of temporary stay by a natural person of a Party in other Party 
Japan Philippines  
Initial period of 
entry and stay Extension Initial period of 
entry and stay Extension 
Short-term business visitors 90 days  Yes – no indication of 
extension criteria.a 59 days Yes – every 2 months thereafter 
for a total period of stay of one 
year including the initial 59 days. 
Intra-corporate transferees One or three years Yes – no indication of 
criteria. One year Yes – no indication of the days 
and criteria.b 
Investors One or three years Yes – no indication of 
criteria. One year Yes – no indication of the days 
and criteria.b 
Natural persons of a Party engaged in professional services One or three years Yes – no indication of 
criteria. One year Yes – no indication of the days 
and criteria.
b 
Natural persons of a Party engaged in supplying services, 
requiring an advanced level of  
technology or knowledge or requiring specialized skills in 
particular fields of industry on 
the basis of a contract with public or private organizations 
in the other Party One or three years Yes – no indication of 
criteria. One year Yes – no indication of the days 
and criteria.
b 
Natural persons of a Party 
engaged in supplying services 
as nurses or certified careworkers or related 
activities, on the basis of: a 
contract with public or private organizations;  or admission to 
public or private training 
facilities in the other Party   Six months for 
language 
training May be extended for six months 
to one year (maximum duration of 
stay is one and a half years) for learning experience and 
preparation for taking the 
Philippine Proficiency Examination for Nurses.  WT/REG257/1 
 Page 29 
 
 
  Japan Philippines  
Initial period of 
entry and stay Extension Initial period of 
entry and stay Extension 
 a) qualified nurse 
under Japanese 
law - "Kangoshi" 
One year  May be extended for 
the same period each 
time and not more 
than twice   
 b) qualified 
careworker under Japanese law - 
"Kaigofukushishi" 
One year May be extended for 
the same period each time and not more 
than three times    
 c) obtaining a 
qualification as a "Kaigofukushishi" 
One year Up to the period 
necessary for the completion of a 
training course   
a According to Japan, although there is no indication in the Agre ement, relevant domestic laws  and regulations stipulate the 
 criteria. 
b According to the Philippines, the length of extension depends on the endorsement of appropriate government agencies regulating 
relevant natural persons.  
Source : Annex 8, the Agreement. 
73. The Agreement provides for the establishmen t of a Sub-Committee on the movement of 
natural persons responsible, inter alia , for reviewing the scope of commitments under Chapter 9 
including examining the possibility of new commitments  in the categories of services suppliers or of 
mutual interest to both Parties;  and the implem entation and operation of the Chapter (Article 113).  
Taking into account reports by the Sub-Committee, Ch apter 9 will be reviewed every five years after 
the entry into force of the Agreement and mo re frequently whenever agreed by the Parties 
(Article 116). 
(a) Nurses, certified careworkers or othe r natural persons in related activities 
74. Japan categorizes Philippine nurses, certified careworkers or other natural persons in related 
activities by education and work experience:  i) those who are qualified nurses under Philippine laws 
and regulations with at least three years working experience (referred to as "Kangoshi");  ii) those 
who graduated with bachelor's degrees from a higher education institution from which the minimum 
period required for graduation is four years and certi fied as a caregiver by the Philippines, or a person 
who graduated from a nursing school (referred to as "K aigofukushishi");  and iii) those who graduated 
with bachelor's degrees from a higher education institution from which the minimum period required 
for graduation is four years (Part 1, Appendix 2, Annex 8).  Japan requires training courses including in the Japanese language (1.(a)-(c).(i), Section 6, Pa rt 1, Annex 8), a requirement which can be totally 
or partially exempted if the authorities judge th at the language abilities of a natural person from the 
Philippines is sufficient to engage in the relevant  activities (note 2, Section 6, Part 1, Annex 8). 
75. In contrast to Japan which has differentiated cat egories of nurses, careworkers or other natural 
persons in related activities from the Philippines, the Philippines has made commitments only in the 
category of nurses.   The Philippines accepts a qualified Japan ese nurse as a Japanese natural person 
licensed under Japanese law and who has complete d a nursing course and has the equivalent of a 
bachelor's degree in nursing in the Philippines, and at least three years of wo rk experience with such a 
license in a hospital.  Such nurses also must unde rtake language training in English and Filipino, 
cultural orientation and related learning experience, prior to taking the Philippines Proficiency 
Examination for Nurses.  The exam can be taken up  to three times during the maximum stay of one 
and a half years.  However, the requirement can be  partially or totally exempted if the Philippines 
authorities so decide.  Apart from the language re quirement, the Philippines also requires that the 
person obtain a special permit from the Professiona l Regulation Commission to practice nursing 
(Section 6, Part 2, Annex 8).  Within three years from the date of the entry into force of the Agreement, the Parties shall discu ss the possibility of reducing the burden imposed on natural persons WT/REG257/1 
Page 30  
 
  of Japan who departs from the Philippines (specific commitments under Article 110,  Section 6, Part 2, 
Annex 8).   
76. Chapter 2 of the Implementing Agreement outlines the commitments of both Parties 
regarding for the Philippines the re cruitment process and issuance of proper travel documents for the 
immediate return of Filipino nurses and careworkers  working in Japan (Articles 9 and 11 of the 
Implementing Agreement);  and for Japan on no tifying the modalities and information on Japanese 
language training (Article 10 of the Implementing Agreement).  Table IV.3 below shows the number 
of grants of Filipino's entry and temporary stay in Japan.  The Philippines is not in a position to 
submit the relevant data to the Secretariat.   
Table IV.3 
A:  Movement of natural persons of the Philippines to Japan 
Categories 
Year Intra-corporate 
transferees Service sellers/ persons responsible for 
setting up commercial presence Other categories of relevance in the 
context of the Agreement Total 
2005 290 15,704 1 15,995 
2006 375 15,916 5 16,296 
2007 417 17,263 3 17,683 
Note: Data on nurses, certified carewor kers or other natural persons in related activities is not available. 
Source: WTO Secretariat, based on data provided by Japan. 
 
D. COMMITMENTS ON TRADE IN SERVICES  
77. The schedule of commitments is contained in  Annex 6 with individual schedules for each 
Party.  The Annex follows a "positive-list appro ach" whereby the obligations of market access 
(Article 72), national treatment (Article 73) and addi tional commitments (Article  74) apply only to the 
sectors listed therein, subject to limitations and conditions.  For the majority of sectors or sub-sectors in which the Parties have taken specific commitment s in Annex 6 and which are indicated with "SS", 
the Parties' specified terms, limitations, conditions and qualifications with respect to market access or 
national treatment are limited to those based on existing non-conforming measures (Article 75.3).  
The scope of the limitations or conditions may be reviewed in the future aiming at further 
liberalization (Article 86.2.(a)).  This rule only applies for modes 1-3 and mode 4, respectively for 
sectors and sub-sectors indicated with "SS*"
18 or "SS**"19, in Japan's schedule.20   
1. Japan 
(a) Horizontal commitments 
78. Japan has not made any horizontal commitments under the Agreement. 
                                                      
18 Security guard services and financial services. 
19 Pre-school education services supplied by nursery schools, child day-care services, hospital services, 
medical services delivered in the ambulance, residential health facilities services other than hospital services, 
blood collection services, and social services. 
20 The Parties explain that the idea of specifying "SS*" or "SS**" was proposed by Japan and as a 
result of the negotiations, "SS*" or "SS**" concessions are not utilized for the Philippines.  WT/REG257/1 
 Page 31 
 
 
  (b) Sector specific commitments 
79. For business services, Japan has added a number of new commitments for:  i) some legal 
services21, ii) urban planning and landscape architectural  services, iii) medical and dental services,  
iv) veterinary services, v) services provided by midw ives, nurses, physiotherapists and para-medical 
personnel, vi) research and development services, vii) rental and leasing services without operators 
relating to ships and aircraft, and viii) a number of sub-sectors under other business services.22  
Regarding legal services, there are some commitments which are different with those in its GATS schedule.  For legal services supplied by quali fied lawyers such as "bengoshi" and "benrishi", 
Japan has broadened its commitments to cover le gal profession corporations  and patent business 
corporations in addition to natura l persons.  For legal advisory services on law of jurisdiction, it has 
removed mode 2 limitations, practice of third country law and representation in international 
arbitration are permitted, and the minimum period of  work experience for lawyers has been shortened 
to three years from five years in the GATS schedule.   In research and development services, Japan has 
added two sub-sectors compared to its GATS schedule.   In terms of placement services of personnel 
in Japan, the Agreement takes a negative-list approa ch indicating exempted occupations whereas its 
GATS schedule lists the eligible occupations  for placement services of personnel. 
80. In communication services, Japan has fully liberalized courier services subject to 
permission/registration requirements for related modes of transport services.  It has taken 
commitments across the full range of basic and value-added telecommunication services, with no limitations under modes 1 to 4 except a foreign owne rship ceiling (maximum one-third, compared to 
one-fifth in its GATS schedule) and a nationality re quirement for board members and auditors in 
Nippon Telegraph and Telephone Cor poration (NTT) (including for the regional companies).  It 
incorporates and expands upon the reference paper of the GATS by adding examples of prohibited 
anti-competitive practices and through additional requirements in connecti on with the reference 
interconnection offer.  It has added new sub-sector s - telegraph services, radio and television services 
and their transmission services – sectors uncommitted  in its GATS schedule, but only for mode 2. 
81. For construction and related engineering services;   and tourism and travel related services, 
mode 3 limitations for national treatment have b een abolished, as in Japan's GATS revised offer. 
82. For distribution services, it has undertaken commitm ents with some limitations in franchising 
services related to petroleum and petroleum produc ts;  alcoholic beverages;  and these services 
supplied at public wholesale market, retail sales of motor fuel, and wholesale trade and retailing services of steam and hot water, sectors uncommitted to in its GATS schedule. 
83. In education services, Japan has taken new commi tments in child day-care services, which are 
uncommitted to in its GATS schedule.  For pre-school education services supplied by nursery 
services, Japan does not inscribe any limitation in  mode 3 under the Agreement compared to its 
GATS schedule where requirements of establishment of formal education institutions by school 
juridical persons exist.  
                                                     
 
21 Legal services supplied by judicial and administ rative scriveners, certified social insurance and 
labour consultants, and land and house surveyors. 
22 Compared to its GATS schedule, the newly added other business services under the Agreement are: 
i) technical testing and analysis services for manufactured goods, excluding services covered by the 
Measurement Law;  ii) services incidental to agriculture, mining, manufacturing, and energy distribution;  iii) investigation services;  iv) security guard services;  v) related scientific and technical consulting services 
related to petroleum, petroleum products, gas and mineral;  vi) credit reporting services;  vii) collection agency 
services;  viii) telephone answering services;  ix) dup licating services;  x) mailing list compilation and mailing 
services;  xi) trade fair and exhibition organization se rvices;  and xii) services incidental to energy 
manufacturing related to heat supply industry and oil industry.   WT/REG257/1 
Page 32  
 
  84. For environmental services, Japan has rem oved the limitation on the number of licenses 
issued for service suppliers of waste oil disposal  at sea which it maintain s in its GATS schedule. 
85. In financial services, Japan incorporates the GATS Understanding on Commitments in 
Financial Services into its schedule under the Ag reement.  While no commitments in additional 
sub-sectors have been taken under the Agreement, so me changes have been made compared to its 
GATS schedule.  Under insurance and insurance-re lated services, Japan has removed the obligation 
for compulsory coverage by the Government in modes 1-3 and opened the sub-sector to insurance 
intermediation services albeit subject to a commerc ial presence requirement.  For banking and other 
financial services, it has removed the requirement that investment trust management services must be provided by juridical persons established in Japan.  Japan's financial services concessions are subject 
to a stand-still for modes 1 to 3. 
86. In health related and social services, GATS commitments in hospital services have been 
replicated except that under the Agreement mode 4 commitments for national treatment have been 
made.  Moreover, the current concession by Japan may not be withdrawn.
23  It has taken new 
commitments in other human health services24, a sector in which it has no GATS commitments, with a 
mode 4 commitment for national treatment, for whic h it also commits not to withdraw concessions. 
87. For recreational, cultural and sporting services,  Japan has fully liberalized museum services 
including preservation services for historical sites and buildings, other cultural services, and other recreational services not included in its GATS schedule.  
88. Japan has undertaken commitments in sub-sect ors uncommitted in its GATS schedule in a 
number of transport services.
25  In particular, it has fully committed in rental of vessels with crew, and 
rental of commercial vehicles with operator.  Rega rding international maritime transport services, a 
sub-sector fully unbound in its GATS schedule across the four modes, Japan has made commitments, albeit subject to nationality requirements, in modes 3 and 4.  
89. In other services not included elsewhere, it h as added home helper services (excluding the 
service classified under social servi ces) with full commitments in modes 2 and 3, but no commitment 
in mode 4.  
90.  Table IV.4 below summarizes Japan's sp ecific commitments under Annex 6 of the 
Agreement and compares them with its GATS schedule excluding mode 4 commitments.  Improvements in its existing GATS commitments are mainly represented by new sub-sectors of services (see paragraphs 79-89 for a detailed descripti on of the changes).  Compared to the GATS, 
Japan has undertaken new commitments  in areas such as i) courier services;  ii) space services;  and 
                                                     
 
23 As of December 2009, Japan confirms that it has no intention to withdraw  the current concession. 
24 Medical services delivered in the ambulance;  residential health facilities services other than hospital 
services;  blood collection services;  and social  services (excluding child day-care services). 
25 Compared to its GATS schedule, the following CPCs have been added to the bracketed sub-sectors: 
(maritime transport services) rental of  vessels with crew excluding vessels flying the Japanese flag;  (maritime 
auxiliary transport services) maintenance and repair of  vessels;  maritime cargo handling services;  container 
station and depot services;  maritime freight forwarding services;  (internal waterways transport) maintenance 
and repair of vessels;  (space transport);  (rail tr ansport services) passenger transportation;  freight 
transportation;  pushing and towing se rvices;  supporting services for rail transport services;  (road transport 
services) passenger transportation;  rental of commercial vehicles with operator;  su pporting services for road 
transport services;  (pipeline transport)  transportation of fuels;  (services auxiliary to all modes of transport) 
cargo-handling services;  storage and warehouse services relating to petroleum and petroleum products;  freight 
transport agency services;  and customs clearance  agent services related to Japanese customs.  WT/REG257/1 
 Page 33 
 
 
  iii) home helper services (excluding the servi ce classified under social services), sub-sectors 
uncommitted in the GATS.  
Table IV.4 
Japan:  Comparison between the GATS and the Agreement specific commitments in trade in services (excluding mode 4) 
Sectors GATS FTA 
1. BUSINESS SERVICES   
A. Professional services √ Improved 
B. Computer and related services  √ Improved 
C. Research and development √ Improved 
D. Real estate √ Improved 
E. Rental/Leasing services without operators √ Improved 
F. Other √ Improved 
2. COMMUNICATION SERVICES   
A. Postal - - 
B. Courier - New 
C. Telecommunication  √ Improved 
D. Audiovisual √ Improved 
E. Other - - 
3. CONSTRUCTION AND RELATED ENGINEERING SERVICES √ Improved 
4. DISTRIBUTION SERVICES √ Improved 
5. EDUCATION SERVICES √ Improved 
6. ENVIRONMENTAL SERVICES √ Improved 
7. FINANCIAL SERVICES   
A. All insurance and insurance-related services √ Improved 
B. Banking and other financial services √ Improved 
8. HEALTH RELATED AND SOCIAL SERVICES √ Improved 
9. TOURISM AND TRAVEL RELATED SERVICES   
A. Hotels and restaurants √ Improved 
B. Travel agencies and tour operators √ Improved 
C. Tourist guides √ Improved 
D. Other - - 
10. RECREATIONAL, CULTURAL AND SPORTING SERVICES √ Improved 
11. TRANSPORT SERVICES   
A. Maritime √ Improved 
B. Internal waterways √ Improved 
C. Air  √ Improved 
D. Space - New 
E. Rail  √ Improved 
F. Road √ Improved 
G. Pipeline √ Improved 
H. Services auxiliary to all modes of transport √ Improved 
I. Other - - 
12. OTHER SERVICES NOT INCLUDED ELSEWHERE - New 
Note: 
√: Commitments in the GATS schedule. 
-: No commitments either under the GATS or the Agreement. 
Improved: Improved commitments made under the Agreement compared to those under the GATS. 
New: New commitments made under the Agreement. 
 
Source :  Japan’s Schedule of Specific Commitments under the GATS (S/DCS/W/JPN) and Anne x under the Agreement.  
The comparison only concerns market access and na tional treatment for mode s 1-3 and not mode 4. 
 
2. The Philippines 
(a) Horizontal commitments 
91. Compared with its GATS schedule, the Phili ppines, under the Agreement, has introduced 
market access requirements under mode 3 that the co mposition of the board of directors or the amount 
of the paid-in equity are differentiated based on the foreign equity ceiling of 40%. WT/REG257/1 
Page 34  
 
  (b) Sector specific commitments 
92. The Philippines has made commitments in busin ess services, a sector not inscribed in its 
GATS schedule, with some exclusions, such as lega l, taxation, research a nd development, and real 
estate services.  In particular, a number of engineering services
26 are committed to subject to modes 3 
and 4 limitations.  A range of sub-sect ors supplied by health professionals27 are listed subject to a 
mode 3 limitation that corporate practice is not allowed.   
93. Under communication services, the Philippines main ly incorporates the reference paper of the 
GATS on basic telecommunication services.  The scope of services commitments is broader than under the GATS as commitments in postal services are added under the Agreement, but the Agreement contains limitations e.g., the Government to operate private express and/or messengerial 
delivery services.  It has new commitments in value added telecommunication services with 
limitations on foreign equity of up to 40% and na tionality requirements for executives, managers and 
service suppliers.  It also has added motion pict ure or video tape production services, but only for 
animated cartoons, with no limitations under mode s 1 and 2 and partial commitments under modes 3 
and 4. 
94. For distribution, education and environmental services, for which the Philippines has no 
commitments in the GATS, it has taken commitments.  For distribution it has made commitments in commission agents' services except the rice and ma ize industries with a number of limitations in 
modes 3 and 4.  In education services, it has taken commitments in primary, secondary, higher and adult education with a number of limitations in  modes 1, 3 and 4.  For sewage services, under 
environmental services, it allows maximum foreign equi ty participation of up to 40%.  The provision 
of public or private sewage services in Metro Manila  is subject to negotiatio ns with and approval by 
authorities.  In addition, it requires partnership or corporation for entry for the provision of such services supplied outside Metro Manila.    
95. For banking and other financial services (excludi ng insurance), certain limitations have been 
relaxed.  For example, the maximum foreign acqui sition of the voting stock of an existing bank was 
raised to 60% compared to 49% in the GATS.  Pursua nt to paragraph 2.(d), Section 1 of Annex 5, the 
definition of "existing" under Article 2.(b) of the Ag reement is not the same as the term "existing" in 
the description of banking and other financial ser vices (excluding insurance) in the Philippines' 
specific commitments.  In addition, non-Filipino citizens may become members of the board of 
directors of a bank to the extent of their participation in the equity of the bank.  
96. In health and social services, for which th e Philippines has no commitment in the GATS, it 
has made commitments in hospital services subject to mode 3 limitations allowing either maximum 
40% foreign equity participation without any conditions or 100% pa rticipation subject to conditions. 
97. Under tourism accommodation facilities servic es, the Philippines has lifted some 
requirements for modes 3 and 4.  For example, forei gn equity limitations of 40% for pensions, tourist 
inns and apartels and quotas on managerial posts in a hotel or resort, which are in its GATS schedule, 
have been removed.  Regarding restaurant servi ces, compared with the GATS, the Agreement has 
relaxed mode 3 limitations, so that foreign nationa ls may wholly operate a restaurant with some 
limitations.  It also has relaxed modes 3 and 4 limitations in travel agencies and tour operator services, for which have limitations of foreign equity ce iling and nationality requirements for managers and 
                                                     
 
26 Aeronautical, agricultural, chem ical, civil, mechanical, sanitary , electrical, naval architecture and 
marine, metallurgical, electronics, mining, and geodetic engineering. 
27 Medicine, nursing, dentistry, optometry, midwifery, medical technology, veterinary medicine, 
physical and occupational therapy, and radiologic technology.  WT/REG257/1 
 Page 35 
 
 
  executives in its GATS schedule.  In addition, it h as added a new sub-sector, tourist guide services 
subject to modes 3 and 4 limitations.  Professional congress organizers' services which are inscribed in its GATS schedule are not listed under the Agreement. 
98. For transport services, the Philippines added maritime agency services, pushing and towing 
services for maritime transport, support services fo r maritime transport, off-line carriers for air 
transport, support services for railroad, street ra ilway, transaction railway, rental of commercial 
vehicles with operator, and pipeline transport.  In addition, leasing/rental of aircraft without crew, 
maintenance and repair of rail transport equipment,  maintenance and repair of road vehicles, and 
container yard and depot services, which are co mmitted under the GATS, are not included in the 
Philippines' commitments in the Agreement. 
99. Table IV.5 below summarizes the Philippines' specific commitments under Annex 6 of the 
Agreement and compares them with its GATS schedule excluding mode 4 commitments.  Improvements in its existing GATS commitments are mainly represented by new sectors/sub-sectors of services or a relaxation of certain limitations ( see paragraphs 92-98 for a detailed description of the 
changes).  Like in the GATS, th e Philippines took no commitments in i) research and development 
services;  ii) real estate services;  iii) construction and related engineering services;  iv) recreational, 
cultural and sporting services;  v) internal waterways transport services;  and vi) space transport services.  In other services not included elsewhere, it has added energy services.  
Table IV.5 
Philippines: comparison between the GATS and the Agreement specific commitments in trade in services (excluding mode 4) 
Sectors GATS FTA 
1. BUSINESS SERVICES   
A. Professional services - New 
B. Computer and related services  - New 
C. Research and development - - 
D. Real estate - - 
E. Rental/Leasing services con cerning vessels without operators 
(the Agreement classifies the sub-sector under business services, 
whereas in the GATS it is scheduled under maritime transport services) √ Same 
F. Other - New 
2. COMMUNICATION SERVICES   
A. Postal - New 
B. Courier √ More restricted limitations compared to its 
GATS  
C. Telecommunication  √ Improved 
D. Audiovisual - New 
E. Other - - 
3. CONSTRUCTION AND RELATED ENGINEERING SERVICES - - 
4. DISTRIBUTION SERVICES - New 
5. EDUCATION SERVICES - New 
6. ENVIRONMENTAL SERVICES - New 
7. FINANCIAL SERVICES   
A. All insurance and insurance-related services √ Same 
B. Banking and other financial services √ Improved 
8. HEALTH RELATED AND SOCIAL SERVICES - New 
9. TOURISM AND TRAVEL RELATED SERVICES   
A. Hotels and restaurants √ Improved 
B. Travel agencies and tour operators √ Improved 
C. Tourist guides - New 
D. Other √ Not scheduled 
10. RECREATIONAL, CULTURAL AND SPORTING SERVICES - - 
11. TRANSPORT SERVICES   
A. Maritime √ Improved 
Table IV.5 (Cont'd)  WT/REG257/1 
Page 36  
 
  Sectors GATS FTA 
B. Internal waterways - - 
C. Air  √ A new sub-sector (off-line carriers). 
A sub-sector (leasing/rental of aircraft 
without crew) which is included in the 
Philippines' GATS commitments not 
scheduled  
D. Space - - 
E. Rail  √ A new sub-sector (support services for 
railroad, street railway, and transaction 
railway).    
A sub-sector (maintenance and repair of rail 
transport equipment) which is included in the 
Philippines' GATS commitments not 
scheduled 
F. Road √ A new sub-sector (rental of commercial 
vehicles with operator).    
A sub-sector (maintenance and repair of road 
vehicles) which is included in the Philippines' 
GATS commitments not scheduled 
G. Pipeline - New 
H. Services auxiliary to all modes of transport √ A sub-sector (container yard and depot 
services) which is included in the Philippines' 
GATS commitments not scheduled 
I. Other - - 
12. OTHER SERVICES NOT INCLUDED ELSEWHERE - New (energy services) 
Note: 
√: Commitments in the GATS schedule. 
-: No commitments either under the GATS or the Agreement. 
Improved: Improved commitments made under the Agreement compared to those under the GATS. 
New: New commitments made under the Agreement. 
Not scheduled:  Commitment in the GATS schedule, but not under the Agreement. 
Same: Same commitments made under the Agreement as those under the GATS. 
 
Source :  Philippines’ Schedule of Spec ific Commitments under the GATS (S /DCS/W/PHL) and Annex under the 
Agreement.  The comparison only concerns market acce ss and national treatment for modes 1-3 and not mode 4. 
 
E. REGULATORY PROVISIONS ON TRADE IN SERVICES  
1. Domestic regulation 
100. With a view not to establish unnecessary barriers, ea ch Party shall endeavour to ensure that its 
measures relating to authorization, licensing or qua lification of service suppliers of the other Party 
are: based on objective and transparent criteria;  not more burdensome than necessary to ensure the 
quality of the service;  and not constituting a disg uised restriction on the supply of the services 
(Article 77). 
2. Recognition 
101. Article 78 on mutual recognition is based on Artic le VII of the GATS.  It authorizes a Party to 
recognize the education or experience obtained, requirements met, or licenses or certifications 
granted, in whole or in part (compared to no indicatio n of such scope in the GATS), in the other Party.  
Recognition may be achieved through harmonizati on or based on an agreement or arrangement 
between the Parties or may be accorded 'unilate rally' ('autonomously' in the GATS).  Concerning 
recognition granted by a Party to a non-Party, adequate  opportunity shall be given to the other Party to 
demonstrate its qualification for such recognition.  However, Article 76 on MFN provisions shall not 
be regarded as a requirement for a Party to  accord such recognition to the other Party 
(Article 78.3.(a)).  Chapter 9 on the movement of natural persons also restates such mutual 
recognition provisions (Article 112)  and establishes a special Sub-Co mmittee on Mutual Recognition 
(Article 113).  WT/REG257/1 
 Page 37 
 
 
  3. Monopolies and exclusive service suppliers 
102. The Agreement has a provision governing monopoli es and exclusive service suppliers, which 
reproduces Articles VIII 1-2, 5 of the GATS (Article 80). 
4. Safeguard measures 
103. If serious balance of payments and external fina ncial difficulties or threat thereof arise, the 
Parties may adopt or maintain restrictions on, incl uding payments or transfers for transactions.  Such 
restrictions are: to ensure that the other Party is treated as favourably as any non-Party;  to be 
consistent with the Articles of Agreement of the International Monetary F und;  to avoid unnecessary 
damage to the commercial, economic and financial interests of the other Party;  not to exceed those 
necessary;  and be temporary and progressively phased out as the situation improves.  For such 
restrictions, priority can be given to more essential supply of services in line with the Parties' 
economic or development programmes, however such pr iority shall not be used as a means to protect 
a particular service sector  (Article 82). 
5. Transparency/list of non-conforming measures 
104. Pursuant to the provision on transparency (Article  79), the Parties are required to list all their 
existing measures which are inconsistent with ma rket access and national treatment provisions in 
Chapter 7, whether or not these measure are included in  the Parties' specific commitments in Part 1 of 
Annex 6.28  The list covering Japan's central and prefec tural governments and the Philippines' central 
and provincial governments includes: i) sector and sub- sector or matter;  ii) type of inconsistency;  
iii) legal source or authority of the measure;  and iv) description of the measure.  The list is subject to 
annual review and revision as necessary.   
F. NON-CONFORMING MEASURES ON INVESTMENT  
105. The investment Chapter adopts a negative-list a pproach to the scheduling of liberalization 
commitments, where national and MFN treatment, and performance requirement obligations apply 
fully, except for sectors, sub-sectors or activiti es listed in Annex 7.  Existing or future 
non-conforming measures maintained by the Parties' central governments are set out in Parts 1 and 2 
of Annex 7, respectively. 
106. The Parties will notify each other within one year  from the date of entry into force of the 
Agreement of any existing non-c onforming measures maintained by a prefecture or a province 
(Article 94.2).29  They will endeavour to reduce or eliminate the reservations in Annex 7 
(Article 94.6).  The reservations and exceptions under the Agreement shall not derogate from the 
Parties' rights and obligations under th e WTO TRIMs Agreement (Article 94.9). 
1. Japan 
107. Japan's reservations on existing measures cover 22 sectors or sub-sectors mostly relating to 
national treatment and to a lesser extent  MFN treatment or performance requirements 
                                                      
28 According to the Parties, the Sub-Committee on Trad e in Services discussed the issue in April 2009, 
and the list is being drawn up and will be made public. 
29 Japan does not have any existing non-conforming measures maintained by a prefecture or a province. WT/REG257/1 
Page 38  
 
  (See Table IV.6).  It has also taken reservations on future measures for ten sectors or sub-sectors all 
for national treatment combined with MFN a nd/or performance requirements (See Table IV.7).
30 
Table IV.6 
Existing non-conforming measures listed by Japan in Annex 7 
Sector or sub-sector Reservation Description 
Agriculture, Forestry and Fisheries NT/MFN Domicile, reside nce requirement - establishment in case of a legal person 
Agriculture, Forestry and Fisheries and 
related services NT Prior notification requirement 
Finance: 
− Banking; deposit insurance system NT Commercial presence (head offices) in Japan 
Heat Supply NT Prior notification requirement 
Information and Communication:   
− Telecommunications; and NT/PR Nationality requirement on: i) vot ing rights for Nippon Telegraph and 
Telephone (NTT) Corporation to enter th e name and address in its register 
of shareholders;  ii) being director or auditor of NTT, NTT 
East Corporation and NTT West Corporation 
− Telecommunications and Internet 
based services NT Prior notification requirement 
Manufacturing:   
− Drugs and medicines 
− Leather and leather products NT Prior notification requirement 
Matters related to the nationality of a 
ship NT/PR Japanese nationality shall be given to  a ship whose owner is a Japanese 
national, or a company established under Japanese law, of which all 
representatives and at least two-thirds  of executives are Japanese nationals 
Mining NT Nationality requirement 
Oil Industry NT Prior notification requirement 
Security guard services NT Prior notification requirement 
Transport:   
− Air transport NT/MFN/PR Prior notification/nationality requi rement for permission/permission 
requirement for foreign air carriers 
− Aircraft service NT/PR Prior notification/nationa lity requirement for permission 
− Registration of aircraft  NT/PR Registration in the national regist ry subject to nationality requirement 
− Freight forwarding business NT/MFN/PR Registration requirement – permission shall be granted to non-nationals on 
the basis of reciprocity 
− Freight forwarding business using 
air transportation only NT/MFN/PR Freight forwarding businesses using a) air transportation within Japan are 
subject to nationality requirement; b) international air transportation is 
subject to registration/authorization requirement granted on the basis of 
reciprocity 
− Railway transport NT Prior notification requirement 
− Road passenger transport NT Prior notification requirement 
− Water transport; coastwise transport, 
inland water transport, coastwise 
ship leasing NT Prior notification requirement except oceangoing/seagoing transport and 
ship leasing industry excluding coastwise ship leasing industry 
− Water transport NT/MFN Unless otherwise specified in laws  and regulations of Japan, or 
international agreements to which Ja pan is a party, ships not flying the 
Japanese flag are prohibited from entering Japanese ports not open to 
foreign commerce and from carry ing cargo or passengers between 
Japanese ports 
Water supply and waterworks NT Prior notification requirement 
Note:  NT: National treatment rest riction;  MFN: Most favoured nation treatment restriction;  and PR: Performance requirement 
restriction. 
Source:  Part 1, Annex 7 of the Agreement. 
 
                                                      
30 Japan confirms that the reservations apply specifically to the Philippines under the Agreement.  
although almost the same treatment is accorded to investors from countries that have Economic Partnership 
Agreements or International Investment Agreements including a reservation list with Japan.  WT/REG257/1 
 Page 39 
 
 
  Table IV.7 
Future non-conforming measures  listed by Japan in Annex 7 
Sector or sub-sector Reservation Description 
NT/PR When transferring or disposing of its equity  interests in, or the assets of, a state 
enterprise or a government entity, Japan ma y: (a) prohibit or impose limitations on the 
ownership of such interests or  assets or on the ability to c ontrol any resulting enterprise 
by investors from the Philippi nes or their investments; or (b) adopt or maintain any 
measure relating to the nationality of executiv es, managers or members of the board of 
directors of any resulting enterprise 
NT7PR Right to adopt or maintain any measur e relating to specific activities (supply of 
telegraph, postal and betting and gambling services, manufacture of tobacco products, 
manufacture of Bank of Japan notes, minti ng and sale of coinage in Japan), if 
liberalized for entities other than the designa ted enterprises or governmental entities, or 
in the event where such designated entitie s no longer operate on a non-commercial basis All 
NT/MFN NT and MFN may not be accorded to i nvestors from the Philippines and their 
investments with respect to subsid ies for research and development 
Aerospace industry: 
− Aircraft/space industry 
Arms and Explosive 
industry: 
− Arms industry 
− Explosive manufacturing 
Energy: 
− Electricity utility industry 
− Gas utility industry 
− Nuclear energy industry 
Information and 
communication: 
− Broadcasting industry NT/PR Right to adopt or maintain any measur e relating to investments in these industries 
Fisheries NT/MFN/PR Right to adopt or maintain any measure re lating to investment in fisheries in the 
territorial sea, internal waters, exclusive economic zone and contin ental shelf of Japan 
Land transaction NT/MFN With respect to acquisition or lease of land properties in Japa n, prohibitions or 
restrictions may be imposed by Cabinet Order on the Philippines nationals or legal 
persons, where Japanese nationals or legal persons are placed under identical or similar 
prohibitions or restrictions in the Philippines 
Public law enforcement and 
correctional services and social services NT/MFN/PR Right to adopt or maintain any meas ure relating to investme nt in these services 
Source:  Part 2, Annex 7 of the Agreement. 
 
2. The Philippines 
108. The Philippines has taken reservations on ex isting measures for 18 sectors or sub-sectors 
mostly for national treatment, and to a lesser extent performance requirements as well as one MFN reservation in manufacturing.  It has also taken rese rvations for future measures for nine sectors or 
sub-sectors.  Such reservations, which apply on an MF N basis, are in the form of national treatment 
with one reservation on performance requirements in the manufacture and distribution of toy firearms 
and explosives. 
G. R
EGULATORY PROVISI ONS ON INVESTMENT  
1. Prohibition of performance requirements 
109. A Party cannot impose performance requirements on an investor of the other Party as 
conditions for the investor's invest ment activities in the Party.  Accordingly, the Parties do not impose 
or enforce any of the following requirements (Article 93): 
(a) to export a given level or percentage of goods or services; 
(b) to achieve a given level or pe rcentage of domestic content; WT/REG257/1 
Page 40  
 
  (c) to purchase, use or accord a preference to goods produced or services provided in its 
Area, or to or from persons in its Area; 
(d) to relate the volume or value of imports to exports or to the amount of foreign 
exchange inflows associated with the investment;  
(e) to restrict sales of goods or services in its Area by relating them to the volume or 
value of its exports or foreign exchange earnings; 
(f) to appoint, as executives, managers or members of boards of directors, individuals of 
any particular nationality; 
(g) to hire a given level of its nationals; 
(h) to transfer technology, a production process  or other proprietary knowledge to a 
person in its Area; 
(i) to locate the headquarters of that investor for a specific region or the world market in 
its Area;  
(j) to achieve a given level or value of r esearch and development in its Area;  or 
(k) to supply exclusively its goods or services fro m its Area to a specific region or world 
market. 
110. These requirements do not preclude the Parties from conditioning the receipt or continued 
receipt of an advantage on compliance with any of the requirements under (g)-(k) above (Article 93.2).  Articles 93 does not apply to any m easures that a Party adopts or maintains regarding 
government procurement (Article 94.7). 
2. Environment and labour 
111. Recognizing the inappropriateness of encour aging investment by relaxing environmental 
measures, the Parties agree not to waive or otherw ise derogate from environmental measures as an 
encouragement for the establishment, acquisition or e xpansion in its Area of investments by investors 
of the other Party (Article 102).
31   
112. The Parties shall endeavour not to waive or ot herwise derogate from, or offer to waive or 
otherwise derogate from national labour laws l eading to weakened or reduced adherence to 
internationally recognized labour rights as an en couragement for the estab lishment, acquisition, 
expansion or retention of an investment in their Area.  Five internationally recognized labour rights 
are defined under Article 103.2.  If a Party considers th at the other Party has encouraged investment in 
an inappropriate manner, it may re quest consultations (Article 103).  
3. Other provisions 
113. The Chapter on investment also contains provisions on expropriation and compensation 
(Article 95), protection from strife (Article 96), and genera l and security exceptions (Article 99).  In 
addition, measures taken for prudential reasons ar e exempt (Article 101), as in the GATS Annex on 
Financial Services.  In addition, as per Article 97, al l transfers relating to an investment of a Party are 
                                                      
31 According to the Parties, the provision mainly a pplies to the pre-establishment stage of investment.  WT/REG257/1 
 Page 41 
 
 
  freely permitted by the other Party.  The Chapter al so permits derogations from this Article in certain 
circumstances for i) situations of serious balance of payments and external financial difficulties or 
threat thereof, or ii) serious difficulties in macr oeconomic management, par ticularly, monetary and 
exchange rate policies (Article 100.1).  Under such circumstances, a Party may take temporary 
safeguard measures subject to the conditions in Article 100.2. 
114. The Parties shall further negotiate to establish a mechanism to settle disputes between a Party 
and an investor of the other Party, which is curre ntly not defined by the Agreement (Article 107.1) 
and the Parties confirm that as of December 2009, th ere is no development in this regard.  Until then, 
mutual consent between parties to a dispute is required to utilize international conciliation or 
arbitration tribunals (Article 107.2). 
V. GENERAL PROVISIONS OF THE AGREEMENT  
A. TRANSPARENCY  
115. The Parties must promptly publish laws, regul ations, administrative procedures and rulings 
and judicial decisions of general application as well  as international agreements to which they are a 
party for any matter covered by the Agreement (A rticle 3).  The Parties agree to examine the 
possibility of amending or repealing laws and regula tions relating to or affecting implementation and 
operation of the Agreement, if the circumstanc es and objectives of such laws and regulations no 
longer exist, or such circumstances or objectives can be addressed in a less trade-restrictive manner 
(Article 4).  Provisions are also made for public  comment procedures (Article 5);  administrative 
procedures (Article 6);  review and appeal (Article  7);  measures against corruption (Article 8);  and 
the disclosure of confidential information (Article 8). 
B. EXCEPTIONS  
116. General exceptions for goods and services ar e maintained by incorporating into the 
Agreement mutatis mutandis  Article XX of the GATT 1994 for g oods and Article XIV of the GATS 
for services.  Article XXI of GATT 1994 on secur ity exceptions for goods is incorporated into 
Article 23 while security exceptions on services pursuant to Article XIV bis of GATS are 
incorporated into Article 84.  However, in compar ison to the GATS the Agreement allows the Parties 
to take any action they consider necessary for th e protection of their essential security interests 
relating to the implementation of national polici es or international agreements respecting the 
non-proliferation of weapons (Article 84.1.(b).(ii)).  
C. ACCESSION AND TERMINATION  
117. There are no accession provisions in the Agre ement.  Either Party may terminate the 
Agreement but must first notify the other Party in writing one year in advance (Article 165).  
D. INSTITUTIONAL FRAMEWORK  
118. A Joint Committee composed of Government re presentatives from the Parties was established 
to, inter alia , review the implementation and operation of  the Agreement;  consider and recommend 
any amendments to the Agreement;  and supervi se and coordinate the work of sub-committees 
established under Article 13.4.  The Parties ha ve established a contact point to facilitate 
communications (Article 14).  The Parties agree to  review the Agreement and its implementation and 
operation in 2011, and thereafter every five years, unless otherwise agreed (Article 161). WT/REG257/1 
Page 42  
 
  E. D
ISPUTE SETTLEMENT  
119. Chapter 15 sets out procedures on the avoidance and settlement of disputes relating to the 
interpretation or application of the Agreement.  The Agreement permits the Parties to utilize dispute 
settlement procedures under any other international agreement to which both Parties are signatories 
(Article 149.2).  Once a dispute settlement proced ure has been initiated, the procedure shall be 
exclusively used for that dispute.  However, the forum exclusive clause will not apply where a dispute 
involves substantially separate and distinct right s or obligations under different international 
agreements (Article 149.3).  In addition, the clause shall not apply where the Parties agree to use more 
than one dispute settlement procedure (Article 149.4).   
120. Priority shall be given to using the WTO Ag reement dispute settlement procedure whenever 
an infringement of the obligations assumed under th e Agreement is also an infringement of those 
assumed under the WTO Agreement (Article 149.5).  
121. Noting that the Parties shall make efforts to avoid disputes through consultations, a Party may 
request consultations in writing with the other Party on matters that it considers to be inconsistent 
with the Agreement.  In that event, the Party requested shall reply promptly and conduct good faith 
consultations (Article 150). 
122. If a Party considers that any benefit under th e Agreement is being nullified or impaired 
(directly or indirectly), then it may make a written re quest for consultations to the other Party.  Unless 
otherwise agreed, the Party requested must enter into  consultations within 30 days of receipt of the 
written request.  However, i) if the dispute at i ssue was the subject of consultations pursuant to 
Article 150;  and ii) at least 60 days have elapsed from the initiation of consultations under 
Article 150, then the requested Party must enter into  consultations within ten days of receipt of the 
written request (Article 152).   
123. A Party may request the establishment of an arbitral tribunal (Article 153).  If a Party has 
requested consultations regarding a dispute pursuant to Article 152.2.(a) and su ch consultations failed 
to resolve the dispute, then either Party may requ est the establishment of an arbitral tribunal after 
90 days of receipt of the request by the other Part y (the period may be exte nded up to 180 days upon 
the request of the requested Party).  However, if  a Party has requested consultations regarding a 
dispute pursuant to Article 152.2.(b), then either Party may request the estab lishment of an arbitral 
tribunal after 60 days (the period may be extended up  to 150 days upon the request of the requested 
Party).  The tribunal shall endeavour to take its deci sion, including any award by consensus but if that 
is not possible, a decision can be taken by majority vote (Article 154.8);  any award shall be final and 
binding on the Parties (Article 154.2).  Within 45 days after issuing of the original award, the Party 
complained against shall notify the complaining Pa rty of the implementation period (Article 157.1). 
124. When the Party complained against finds it im possible to comply with the original award 
within the implementation period,  it will hold consultations with the complaining Party to find 
compensation that is mutually acceptable.  If agreem ent cannot be reached within 45 days after the  
expiry date of the implementation period, the co mplaining Party may notify the Party complained 
against of its intention to suspend obligations unde r the Agreement (Article 157.2).  The complaining 
Party also may suspend its obligations under the Agre ement when the arbitral tribunal confirms that 
the Party complained against has failed to comply w ith the original arbitral award (Article 157.5).  
The conditions for suspensions listed in Article  157.6 are similar to Article 22 of the WTO 
Understanding on Rules and Procedures Governing the Settlement of Disputes.  However, the 
Agreement is more stringent than Article 22.3.(a) of the WTO Understanding in that such suspension 
must cover the same sector or sectors to which the nullification or impairment relates unless it is not 
practical or effective to suspend obligations in such sector or sectors.   WT/REG257/1 
 Page 43 
 
 
  125. The steps to be taken in the dispute settleme nt process are described below.  During the 
process, the Parties may request good offices, c onciliation or mediation in writing at any time 
(Article 151).  They shall share the costs of the ar bitral tribunal equally (Article 158).  The Parties 
may also terminate the proceedings at any time by join t notification to the chair of the arbitral tribunal 
during its proceedings (Article 156).  In the case of  disputes on prudential issues and other financial 
matters, arbitral tribunals must have the necessary e xpertise relevant to the specific financial service 
under dispute (section 4, Annex 5). 
Table V.1 
Synopsis of Dispute Settlement Provisions under the Agreement 
 
F. RELATIONSHIP WITH OTHER AGREEMENTS CONCLUDED BY THE PARTIES  
126. The Agreement's relationship with other agreemen ts concluded by the Parties is defined in 
Article 11, where the Parties reaffirm their rights and obligations under the WTO Agreement.  When 
there are inconsistencies in the Agreement and th e WTO Agreement, the latter prevails, whereas on 
inconsistencies in the Agreement and the Treaty of Amity, Commerce and Navigation between the 
Parties, the Agreement prevails.   Request for Consultations (Art.152.1)
Establishment of Arbitral Tribunals (Art.153) 
Issuance of Award (Art.154.7)
Notification of Implementation Period (Art.157.1)
Consultation on Compensation (Art.157.2) Referral to Arbitral Tribunal (Art.157.4) 
Suspension of Concession (Art.157.6)Consultations (Art.152.2)
Consultation (Art.157.7)
Referral to Arbitral Tribunal (Art.157.7)Issuance of Award (Art.157.8)
Issuance of Award (Art.157.8)WT/REG257/1 
Page 44  
 
  127. Table V.2 lists all other regional trade agreem ents (RTAs) notified and not notified to the 
GATT/WTO and in force to which Japan  and the Philippines are party. 
Table V.2 
Japan and the Philippines:  Participation in other RTAs  (notified and non-notified in force), as of March 2010  
GATT/WTO Notification Partner/ 
Agreement Date of 
entry 
into force Type of 
agreement Year WTO Provision 
JAPAN 
Vietnam 01.10.09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
Switzerland 01.09.09 Goods & Services  2009 GATT Art. XXIV & GATS Art. V 
ASEAN 01.12.08a Goods 2009 GATT Art. XXIV 
Brunei Darussalam 31.07.08 Goods & Services 2008 GATT Art. XXIV & GATS Art. V 
Indonesia 01.07.08 Goods & Services 2008 GATT Art. XXIV & GATS Art. V 
Thailand 01.11.07 Goods & Services 2007 GATT Art. XXIV & GATS Art. V 
Chile 03.09.07 Goods & Services 2007 GATT Art. XXIV & GATS Art. V 
Malaysia 13.07.06 Goods & Services 2006 GATT Art. XXIV & GATS Art. V 
Mexico 01.04.05 Goods & Services 2005 GATT Art. XXIV & GATS Art. V 
Singapore 30.11.02 Goods & Services 2002 GATT Art. XXIV & GATS Art. V 
THE  PHILIPPINES 
ASEAN-Japan 01.12.08a Goods  2009 GATT Art. XXIV 
ASEAN-China 01.07.07 Services 2008 GATS Art. V 
ASEAN-China 01.07.03 Goods 2004 Enabling Clause 
AFTA 28.01.92 Goods 1992 Enabling Clause 
GSTP 19.04.89 Goods 1989 Enabling Clause 
PTN 11.02.73 Goods 1971 Enabling Clause 
ASEAN-Rep. of Korea * Goods & Services Not notified 
 
a Only for Japan, the Lao People's Democratic Republic, My anmar, Singapore, and Vietnam.  Entered into force for 
 Brunei Darussalam on 1 January 2009;  for Malaysia on 1 February 2009;  and for Thailand on 1 June 2009. 
* Not yet in force for all member states of th e ASEAN.  Dates of entry into force differ. 
 
AFTA: ASEAN Free Trade Area 
GSTP: Global System of Trade Preferences PTN: Protocol relating to Trade Ne gotiations among deve loping countries 
 
Source: WTO Secretariat.  
 
G. GOVERNMENT PROCUREMENT  
128. The Parties recognize the importance of mutual  accordance of national and MFN treatments 
regarding measures on government procurement with a view to achieving greater mutual 
liberalization and expansion of trad e.  In addition, the development, financial and trade needs of the 
Parties have been recognized (Article 131).  A Sub-Committee on Government Procurement, 
discusses, inter alia , the possibility of according national a nd MFN treatments to goods, services, and 
suppliers of the other Party and consistency of each Party's government procurement measures with 
international principles on government procuremen t, such as the WTO Agreement on Government 
Procurement (GPA) (Article 133). 
129. In case a Party offers any advantages for accessi ng its government procurement market or any 
advantageous treatment on government  procurement to third Parties, it shall enter into negotiations 
with the other Party with a view to extending this treatment to the other Party (Article 132).  Further  WT/REG257/1 
 Page 45 
 
 
  negotiations on government procurement are to be c onducted no later than five years after the entry 
into force of the Agreement with a view to liber alizing the Parties' government procurement markets 
(Article 134). 
H. INTELLECTUAL PROPERTY  
130. The Agreement recognizes intellectual property as a means to promote trade and investment 
between the Parties (Article 1.(d)).  Intellectual pr operty is defined by Chapter 10 as: i) patents;  
ii) industrial designs;  iii) trademarks for goods and ser vices;  iv) copyright and related rights;  v) new 
varieties of plants;  vi) unfair competition;  and vii) those that are under the WTO TRIPS Agreement and/or the relevant international agreements referred to in the TR IPS Agreement (Article 117.3).  The 
areas of future cooperation in intellectual propert y are identified in Article 119 with the possibilities 
of expanding their scope.  However, these are not  subject to the dispute settlement mechanism under 
the Agreement, but rather to the Sub-Committee on Intellectual Property upon agreement by the 
Parties (Article 119.4).  The Sub-Committee discusses, inter alia , i) the scope of patentable 
inventions, prior art and registrable industrial desi gns;  ii) protection of well-known trademarks and 
their international registration system;  iii) liability  of internet service providers;  iv)collective 
management organizations for copy right and related rights;  and v)  protection of new varieties of 
plants (Article 130.2.(b)).  According to the Parti es, the list in Article 130.2.(b) is exhaustive unless 
other issues are delegated to the Sub-Committee by the Joint Committee pursuant to Article 13. 
131. The provision on patents does not detail, for exam ple, patentable subject matter or other use 
without authorization of the right holder, but rather states that any applicant for a patent may file a 
request to the competent authority that its applica tion be promptly examined  in accordance with the 
laws and regulations of each respective Party  (Article 123).  Industria l designs and undisclosed 
information are to be protected in accordance with the WTO TRIPS Agreement (Articles 124 and 
128.3).  For the protection of trademarks for goods and services, the Parties shall also abide by the 
Paris Convention in addition to the WTO TRIPS Agreement (Article 125). 
132. As regards copyright and related rights, aut hors, performers and producers of phonograms of 
each Party have the exclusive right to authorize how their works shall be made available to the public, 
by wire or wireless means.  Works, performance s or phonograms which are not authorized by the 
authors, performers or producers, shall be given adeq uate legal protection and effective legal remedies 
against the circumvention of the rights of such au thors, performers or producers of phonograms by the 
Parties (Article 126).   
133. In comparison with Article 27.3.(b) of the TRIPS Agreement, which acknowledges a 
possibility of exclusion of patentability in plants other than micro-organisms, the Agreement directs 
the Parties to endeavour to increase the number of plant genera and species that can be protected 
under their laws and regulations.  In addition, each Pa rty shall consider the concerns of the other Party 
in this regard (Article 127).  Under the provision on unfair competition (Article 128), the Agreement 
instructs the Parties to prohibit, inter alia , i) acts of selling imitated goods;  and ii) acts of creating 
confusion by any means on any services of a competitor. 
134. The Parties shall provide for procedures c oncerning the suspension of releasing infringing 
goods by customs authorise in line with their la ws and regulations cons istent with the TRIPS 
Agreement (Article 129).  Adequate compensation for damages to the intellectual property right 
holder shall be ensured following Article 45.1 of  the TRIPS Agreement (Article 129.2).  The 
Agreement goes beyond the TRIPS Agreement in expa nding the scope of eligible criminal procedures 
and penalties to be applied in add ition for the infringement of rights relating to new varieties of plants 
or infringement or repetition of infringement of  patents, utility models, industrial designs or 
layout-designs of integrated circuits on a commer cial scale ("at least in cases of trademark WT/REG257/1 
Page 46  
 
  counterfeiting or copyright piracy on a commercial scale" in Article 61 of the TRIPS Agreement).  
Further, the Agreement also introduces crim inal and monetary penalties (Article 129.3). 
I. O
THERS  
1. Competition 
135. Chapter 12 on competition is composed of thr ee provisions and the Chapter is supplemented 
by five provisions of the Impl ementing Agreement.  The Chapter is not subject to the dispute 
settlement mechanism under the Agreement (Article 137). 
136. Pursuant to the Parties' laws and regulations , they shall take measures considered to be 
appropriate to promote competition addressing anti-competitive activiti es.  When necessary,32 the 
Parties shall review and improve or adopt those laws and regulations (A rticle 135).  Technical 
cooperation activities relating to competition law enfo rcement and policy are detailed in Article 13 of 
the Implementing Agreement, including exchange of the government officials for training and their participation in a training course.  Such coopera tion shall be reviewed and expanded upon mutual 
agreement, when either Party adopts new laws and regulations relating to the implementation of its 
competition policy, subject to the applicable laws and regulations and available resources of each 
Party (Article 16 of the Implementing Agreement). 
2. Improvement of the Business Environment 
137. To improve the business environment for pe rsons of a Party conducting their business 
activities in the other Party, the Parties shall take  appropriate measures pursuant to their laws and 
regulations.  Cooperation is conduc ted by a Sub-Committee, a consultative group, and liaison office 
on the improvement of the business environment (A rticles 139, 140, and 141, respectively;  and 
Articles 17, 18 and 19 of the Implementing Agreem ent, respectively).  The Sub-Committee mainly 
supervises the activities of each consultative group (A rticle 139.2) and can invite representatives of 
relevant entities, such as the private sector with th e necessary expertise relevant to issues to be 
addressed (Article 17 of the Implementing Agreement). 
138. The Chapter is not subject to the disput e settlement mechanism under the Agreement 
(Article 143), however, through dipl omatic channels, a Party may request the other Party to take 
measures for resolving issues which the requesting Party considers to create adverse effects on its 
business persons in the other Party.  The requested Party shall promptly respond to such request and 
where warranted, shall endeavour to take measures  to resolve such issues in accordance with its 
applicable laws and regulations.  The measures that the requested Party has taken shall be informed to 
the requesting Party (Article 142). 
                                                     
 
32 For Japan, this can be evaluated, inter alia , by governmental or non-governmental advisory panels, 
public comments, and reports by the Legislative Council of the Ministry of Justice.  For the Philippines, public, 
stakeholders, private entities, or the Governments of Japan, or the Philip pines can request a necessity test.  WT/REG257/1 
 Page 47 
 
 
  ANNEX I 
 
Indicators of tariff and trade liberalization under the Agreement  
 
 
1. A comparison between the scheduled elimination of tariffs applied to the Parties' mutual 
imports and the MFN rates applied by Japan and th e Philippines is shown in Table AI.1 (Japan) and 
AI.2 (the Philippines) below, by total products , agricultural products and non-agricultural products. 
Table AI.1 
Japan: Indicators of MFN tariff rates and pref erential rates for imports from the Philippines 
ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin of 
goods Year 
Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff 
lines (%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) 
MFN 2008 4.8 8.3 41.7 11.3 15.8 25.6 3.4 6.2 45.6 
Philippines 2008 2.2 13.8 82.0 9.6 17.9 41.3 0.6 7.9 92.0 
 2009 2.1 13.2 82.0 9.3 17.3 41.3 0.6 7.5 92.0 
 2010 2.0 12.6 82.0 8.9 16.7 41.3 0.6 7.0 92.0 
 2011 1.9 12.1 82.1 8.6 16.0 41.3 0.5 6.5 92.1 
 2012 1.8 11.5 82.1 8.3 15.4 41.3 0.5 6.1 92.1 
 2013 1.7 12.5 84.1 7.9 16.1 45.3 0.4 6.8 93.5 
 2014 1.7 12.0 84.1 7.6 15.5 45.3 0.4 6.4 93.5 
 2015 1.6 13.4 86.0 7.3 17.1 50.7 0.4 7.2 94.5 
 2016 1.6 12.9 86.0 7.1 16.6 50.7 0.4 6.8 94.5 
 2017 1.5 12.5 86.0 6.9 16.1 50.7 0.3 6.4 94.6 
 2018 1.4 18.2 90.2 6.7 21.4 61.4 0.3 11.2 97.0 
 2019 1.4 18.1 90.2 6.6 21.2 61.4 0.3 11.2 97.0 
 2020 1.4 18.0 90.2 6.6 21.0 61.4 0.3 11.2 97.0 
 2021 1.4 17.9 90.2 6.5 20.8 61.4 0.3 11.2 97.0 
 2022 1.4 17.7 90.2 6.5 20.7 61.4 0.3 11.2 97.0 
 2023 1.4 19.2 90.9 6.4 23.2 64.8 0.3 11.2 97.0 
 a WTO Definition.  Note:  For tariff lines subject to TRQs only the out-of-quota duty  is included in the tariff-related calculations;  lines with specific duties 
and the non ad valorem  component of lines with compound and altern ate rates are excluded from the calculations. 
 
Source:  WTO Secretariat estimates based on data provided by Japan. 
 
2. Japan's average applied MFN rate in 2008 w as 4.8%.  Tariffs on agricultural products are 
higher than for non-agricultural products with the av erage applied MFN tariff on agricultural products 
roughly three times higher than that applied to  non-agricultural products.  Duty-free tariff lines 
account for 41.7% of all tariff lines.  As a result of the Agreement, Filipino exporters enjoyed an 
absolute margin of preference of 1.7% for agricultural goods, vis-à-vis  the prevailing average MFN 
tariff in 2008, and 2.8% for non-agricultural goods.  Overall, Filipino exporters enjoyed an absolute 
margin of preference of 2.6% vis-à-vis the prevailing average applied MFN tariff;  the share of 
duty-free lines applicable to imports from the Phili ppines also rose from 41.7% on an MFN basis to 
82% in 2008.  By 2018, ten years after implementati on, 90.2% of all tariff lines are due to become 
duty free for Filipino exporters to Japan, of which 61.4% for agriculture and 97% for non-agriculture.  
By the end of implementation in 2023, the share of duty-free lines for imports from the Philippines is 
expected to rise to 90.9% overall, with 97% of non-agricultural products and 64.8% of agricultural 
products becoming duty-free. 
 
    WT/REG257/1 
Page 48  
 
  Table AI.2 
The Philippines: Indicators of MFN tariff rate s and preferential rates for imports from Japan 
ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin of 
goods Year 
Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff 
lines (%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) 
MFN 2008 6.5 6.7 3.7 10.3 10.3 0.0 5.9 6.1 4.3 
Japan 2008 3.4 8.8 61.1 6.7 11.1 39.8 2.9 8.2 64.7 
 2009 3.0 7.7 61.1 6.2 10.3 39.8 2.5 7.1 64.8 
 2010 2.7 7.1 62.0 5.4 9.0 39.8 2.3 6.7 65.8 
 2011 2.4 6.4 62.8 4.7 7.9 39.8 2.0 6.1 66.7 
 2012 2.2 5.8 62.8 4.3 7.2 39.8 1.8 5.5 66.7 
 2013 1.4 5.6 74.2 3.5 6.0 40.9 1.1 5.4 79.4 
 2014 1.2 4.7 74.2 3.1 5.2 40.9 0.9 4.5 79.4 
 2015 0.9 3.6 74.2 2.4 4.0 40.9 0.7 3.4 79.4 
 2016 0.7 2.5 74.2 1.7 2.8 40.9 0.5 2.4 79.4 
 2017 0.4 1.7 75.9 1.1 2.3 52.8 0.3 1.5 79.5 
 2018 0.1 9.8 98.6 0.4 47.2 99.2 0.1 6.6 98.5 
 
a WTO Definition. 
 
Note: Based on the HS 2007 nomenclature;  for tariff lines subj ect to TRQs only the out-of-quota duty is included in the tariff -related 
 calculations. 
 
Source : WTO Secretariat estimates based on data provided by the Philippines and the WTO-IDB. 
 
3. The Philippines' average applied MFN rate in 2008 was 6.5%.  Tariffs on agricultural 
products are higher than for non-agricultural pro ducts with the average applied MFN tariff on 
agricultural products roughly two times higher than  that applied to non-a gricultural products.  
Duty-free tariff lines account for 3.7% of all tariff lines.  As a result of the Agreement, Japanese 
exporters enjoyed an absolute margin of preferences 3.6% for agricultural goods, vis-à-vis the 
prevailing average MFN tariff in 2008, and 3% for non-agricultural goods.  Overall, Japanese exporters enjoyed an absolute margin of preference of 3.1% vis-à-vis the prevailing average applied 
MFN tariff;  the share of duty-free lines applicable  to imports from Japan also rose from 3.7% on an 
MFN basis to 61.1% in 2008.  By the end of implementation in 2018, the share of duty-free lines for imports from Japan is expected to rise to 98.6% ove rall, with 98.5% of non-agricultural products and 
99.2% of agricultural products becoming duty-free. 
Table AI.3 – Japan:  Market access opportunities under the Agreement for the Philippines' top 25 exports 
Access Conditions to Japan's import markets  
MFN (2008)  Philippines' top export products in 2004-2006  
No. of tariff lines  Duty-free in  
HS number and description of the 
product  Share in 
global exports MFN 
average  Duty-free Dutiable 2008 2013 
No. of remain 
dutiable  lines  
854270 Electronic microassemblies 13.2 0.0 1     
854221 Digital 8.6 0.0 15     
847330 Parts and accessories of the 
machines of heading 84.71 7.7 0.0 3     
854129 Other 7.1 0.0 2     
847170 Storage units 5.8 0.0 5     
853120 Indicator panels incorporating 
liquid crystal devices (LCD) or 
light emitting diodes (LED) 4.1 0.0 1     
854150 Other semiconductor devices 2.8 0.0 1     
847130 Portable digital automatic data 
processing machines, weighing 
not more than 10 kg, consisting of at least a central 
processing unit, a keyboard 
and a display 2.7 0.0 1     
Table AI.3 (Cont'd)   WT/REG257/1 
 Page 49 
 
 
  Access Conditions to Japan's import markets  
MFN (2008)  Philippines' top export products in 2004-2006  
No. of tariff lines  Duty-free in  
HS number and description of the 
product  Share in 
global exports MFN 
average  Duty-free Dutiable 2008 2013 
No. of remain 
dutiable  lines  
854121 With a dissipation rate of less 
than 1 W 2.7 0.0 2     
854430 Ignition wiring sets and other 
wiring sets of a kind used in vehicles, aircraft or ships 1.8 2.4 1 1 1   
870899 Other 1.8 0.0 2     
740311 Cathodes and sections of 
cathodes 1.6 2.0 1 2  2  
847160 Input or output units, whether 
or not containing storage units 
in the same housing 1.6 0.0 4     
854290 Parts 1.6 0.0 1     
853690 Other apparatus 1.2 0.0 1     
151311 Crude oil 1.0 4.5  1 1   
852990 Other 1.0 0.0 6     
080300 Bananas, including plantains, 
fresh or dried. 0.9 12.8  2 1  1 
900659 Other 0.8 0.0 1     
870839 Other 0.7 0.0 1     
441890 Other 0.6 3.0 1 4 4   
701110 For electric lighting 0.5 0.0 1     
852520 Transmission apparatus 
incorporating reception apparatus 0.5 0.0 5     
853400 Printed circuits. 0.5 0.0 1     
880390 Other 0.5 0.0 1     
Total of above  71.4  58 10 7 2 1 
Source:  WTO estimates based on data provided by Japan and UNSD, Comtrade data. 
 
4. Table AI.3 shows the market access conditions in  Japan for the Philippines' top 25 exports, 
which in 2004-2006 accounted for 71.4% of its global exports.  Fifty-eight tariff lines (at the HS 9-digit level) were already duty-free on an MFN b asis.  Out of ten tariff lines which were dutiable, 
seven lines became duty-free upon the entry into force of the Agreement;  a further two lines are to 
become duty-free in 2013.  One tariff line wh ich remains dutiable among the Philippines' top 
25 exports is related to bananas.   Bananas are the only agricultural product among the Philippines' top 
25 exports.  Japan removed duties on dried banan as upon the entry into force of the Agreement, 
whereas it will retain duties on fresh bananas (other than those certified as being Inabaniko, Lakatan, 
Latundan, Morado, Pitogo, Saba or Señorita bananas by the Governme nt of the Philippines) after the 
Agreement is fully implemented. 
Table AI.4 – The Philippines: Market access opportuniti es under the Agreement for Japan's top 25 exports  
Access Conditions to Philippines' import markets  
MFN (2008)  Japan's top export products in 2005-2007  
No. of tariff lines  Duty-free in  
HS number and description of the 
product  Share in 
global 
exports MFN 
average  Duty-
free Dutiable 2008 2010 2011 2013 2018 
870323 -- Of a cylinder capacity 
exceeding 1,500 cc but not exceeding 3,000 cc 6.2 30.0  19    19  
870324 -- Of a cylinder capacity 
exceeding 3,000 cc 4.5 30.0  7    7  
870322 -- Of a cylinder capacity 
exceeding 1,000 cc but not 
exceeding 1,500 cc 1.9 30.0  4    4  
Table AI.4 (Cont'd)  WT/REG257/1 
Page 50  
 
  Access Conditions to Philippines' import markets  
MFN (2008)  Japan's top export products in 2005-2007  
No. of tariff lines  Duty-free in  
HS number and description of the 
product  Share in 
global 
exports MFN 
average  Duty-
free Dutiable 2008 2010 2011 2013 2018 
852580 - Television cameras, digital 
cameras and video camera 
recorders 1.8 2.5  3 3     
870840 - Gear boxes and parts 
thereof 1.6 10.4  9  3  6  
852990 - Other 1.4 1.9 2 9 7    2 
851770 - Parts 1.3 0.4 8 2 2     
854239 -- Other 1.3 2.5  1     1 
890190 - Other vessels for the 
transport of goods and other 
vessels for the transport of both persons and goods 1.3 3.2  9 4   5  
844399 -- Other 1.2 0.4 2 2 2     
848620 - Machines and apparatus 
for the manufacture of semiconductor devices or of 
electronic integrated circuits 1.1 0.3 15 6 6     
854231 -- Processors and 
controllers, whether or not combined with memories, 
converters, logic circuits, 
amplifiers, clock and timing circuits, or other circuits 1.1 2.5  1     1 
854232 -- Memories 1.1 2.5  1     1 
842952 -- Machinery with a 360° 
revolving superstructure 1.0 1.0  1 1     
870332 -- Of a cylinder capacity 
exceeding 1,500 cc but not 
exceeding 2,500 cc 0.9 30.0  11    11  
271019 -- Other 0.8 2.9  16 4   12  
854140 - Photosensitive 
semiconductor devices, 
including photovoltaic cells whether or not assembled in 
modules or made up into 
panels; light emitting diodes 0.8 0.0 3       
854233 -- Amplifiers 0.8 2.5  1     1 
840991 -- Suitable for use solely or 
principally with spark-ignition internal combustion piston engines 0.7 1.7  41   27 14  
890120 - Tankers 0.7 1.0  2 2     
381800 Chemical elements doped 
for use in electronics, in the 
form of discs, wafers or 
similar forms; chemical compounds doped for use in 
electronics. 0.6 0.0 1       
870333 -- Of a cylinder capacity 
exceeding 2,500 cc 0.6 30.0  9    9  
870422 -- g.v.w. exceeding 5 tonnes 
but not exceeding 20 tonnes 0.6 17.7  12 4   8  
870829 -- Other 0.6 8.3  9  5  4  
847330 - Parts and accessories of the 
machines of heading 84.71 0.5 0.0 2       
Total of above  34.5  33 175 35 8 27 99 6 
Note: Based on HS 2007 nomenclature. 
 
Source:  WTO estimates based on data provided by the Philippines, WTO-IDB and UNSD, Comtrade data. 
 
  WT/REG257/1 
 Page 51 
 
 
  5. Table AI.4 shows the market access conditions in  the Philippines for Japan's top 25 exports, 
which in 2005-2007 accounted for 34.5% of its gl obal exports.  Thirty-three tariff lines (at the 
HS 8-digit level) were already duty-free on an MFN basis.  Out of 175 tariff lines which were 
dutiable, 35 lines became duty-free upon the entry into force of th e Agreement;  a further eight, 27, 
and 99 lines are to become duty-free in 2010, 2011, and 2013, respectively.  The last six lines 
remaining dutiable and will become duty-free in 2018, relate to HS chapter 85 (electrical machinery 
and equipment and parts thereof).  
 WT/REG257/1 
Page 52  
 
  ANNEX II 
 
Tariff-Rate Quotas under the Agreement
 
 
 
1. Japan maintains tariff-rate quotas (TRQs) in so me agricultural products (13 tariff lines at 
9-digit) while the Philippines has TRQs in iron a nd steel products (55 tariff lines at 8-digit), the 
details of which are shown below. 
Table AII.1 
Japan: Tariff-rate quotas for some agricultural products originating in the Philippines  
TRQ from the date of entry into force 
(11 December 2008) except "sugars" which are  
subject to TRQ from 1 April 2010  Liberalization scheme  
Duty  HS Code (description)  
Quantity  In-quota Out of quota Quantity Duty 
Meat and edible meat offal 
020711000;  020712000;  
020713200;  020714220 750 metric tonnes (MT) 
in 2008 and increasing 
annually to 7,000 MT 
in 2012  8.5%  
 MFN duty 
(2008)  
(11.9%) 
Fresh pineapples 
080430010 250 MT in 2008 and 
increasing annually to 
1,800 MT in 2012 0 MFN duty 
(2008) (17%) 
Preparations of meat 
160100000 
 25 MT in 2008 and 
increasing annually to 
500 MT in 2012 9% in 2008 and 
reduced annually 
to 8% in 2012 MFN duty 
(2008) (10%) 
160241090;  160249290 
 100 MT in 2008 and 
increasing annually to 
1,200MT in 2012 18% in 2008 and 
reduced annually 
to 16% in 2012 MFN duty 
(20%) Subject to renegotiation  
after the fifth year (2012) 
 
Sugars     
170111110 300 MT in 2010 and 
400 MT in 2011 ¥17.65/kg MFN duty 
(2008)  
(¥35.3/kg) 
170310099 2,000 MT in 2010 and 
3,000 MT in 2011 ¥7.65/kg MFN duty 
(2008)  
(¥15.3/kg) Subject to renegotiation  
after the fourth year (2011) 
 
Ice cream 
210500111;  210500113 
 
  
 18.9% in 2008 
and reduced 
annually to 
14.7% in 2012 MFN duty 
(2008) 
(21%) 
210500191 38 MT in 2008 and 
increasing annually to 
500 MT in 2012 26.8% in 2008 
and reduced 
annually to 
20.9% in 2012 MFN duty 
(2008) 
(29.8%) Subject to renegotiation 
after the fifth year (2012) 
Note: The operation of the TRQs is based on Japan's fiscal year (April - March). 
Source: Section 1, Part 2, Annex 1 of the Economic Partne rship Agreement between Japan and the Philippines. 
 
 
 
 
     WT/REG257/1 
 Page 53 
 
 
  Table AII.2 
The Philippines:  Tariff-rate quotas for iron and steel products originating in Japan  
TRQ from the date of entry into force  
(11 December 2008)  Liberalization scheme  
Duty  HS Code (description)  
Quantity  In-quota Out of quota Quantity Duty 
Iron and steel 
72101110;  72101190;  
72101210;  72101290;  
72121010;  72121090 7% or the MFN 
applied rates at 
the time of 
importation, 
whichever is 
lower.   
According to data 
provided by the 
Philippines, the 
current MFN 
(2008) is 0% 
72081000;  72082510;  
72082590;  72082600;  
72082700;  72083600;  
72083700;  72083800;  72083900;  72084000;  
72085100;  72085200;  
72085300;  72085400;  72089000;  72091500;  
72091600;  72091700;  
72091820;  72091890;  72092500;  72092600;  
72092700;  72092810;  
72092890;  72099010;  72099090;  72111310;  
72111320;  72111390;  
72111410;  72111420;  72111490;  72111910;  
72111920;  72111930;  
72111990;  72112310;  72112320;  72112330;  
72112390;  72112910;  
72112920;  72112930;  72112990;  72119010;  
72119020;  72119030;  
72119090 175,000 MT in 
2008 and 
increasing 
annually to 
200,000 MT in 
2010 0 
 7% or the MFN 
applied rates at 
the time of 
importation, 
whichever is 
lower.   
According to data 
provided by the 
Philippines, the 
current MFN 
(2008) is 7%  Subject to renegotiation in the third 
year (2010) and every three years 
thereafter 
Note: The operation of the TRQs is based on  the Philippines' calendar year (January - December). 
Source: Section 1, Part 3, Annex 1 of the Economic Partne rship Agreement between Japan and the Philippines. 
 
__________