Philippines-Japan Trade Frictions: A study of non-tariff barriers

Abstract

This paper is a study of the extent and nature of the non-tariff barriers (NTBs) facing Philippine exporters to Japan. The study finds that the main barrier to Philippines Japan trade is the difficulty of Philippine exporters to meet Japanese market demands. While the focus of the study has been on Japanese NTBs, interviews with Philippine exporters reveal the existence of NTBs on the Philippine side, namely, those related to Philippine Government regulations and control measures and to characteristics of Philippine exporters. This study is important in at least one respect: the results of the study may be able to explain why the Philippines' new manufactured ex ports have been unable to penetrate the Japanese market despite favourable condi tions.* Bautista (1982) noted in his study of Philippines-Japan trade relations that it was paradoxical that Philippine labour-intensive exports grew rapidly in other markets like the United States where there was said to be rising protectionism, and grew slowly (if at all) in the Japanese market where there supposedly were impressive trade liberalization measures. It seemed questionable to Bautista why Philip pine non-traditional exports were unable to penetrate the Japanese market considering that: 1. non-traditional exports were being given a stimulus from the supply side through economic incentives and infrastructure sup port; 2. there was rapid growth of non traditional manufactured exports in other mar kets, particularly in the United States; and 3. Japan's comparative advantage in labour intensive manufactures was weakening on account of increasing ]abour scarcity and a rapid rise in wages. To pursue the objective of the study two sets of data were used. First, a review of existing studies on Philippines-Japan trade by selected government agencies, focusing on non-tariff barriers. Second, the result of the survey inter views of selected Philippine exporters con ducted specifically for this study.