This research examined free trade agreements (FTAs) the Philippines entered into, namely (1) the Philippines-Japan Economic Partnership Agreement (PJEPA), (2) the European Free Trade Association Agreement (EFTA), and (3) the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) to identify the general considerations, parameters, and elements which are vital in trade negotiations as these will ensure the inclusion of labor provisions in free trade agreements. Using a quantitative-qualitative study design and a convergent parallel analysis approach, the researchers analyzed historical data, including foreign direct investment, real wage, labor force participation rate, and import-export-trade balance, among others, to determine the link between labor provisions and trade implications in terms of employment and economic growth. The results showed that FTAs with labor provisions significantly affect real wages. However, no significant effects were found for the gender wage gap and labor force participation. For the qualitative aspect, the researchers interviewed subject matter experts in trade negotiations and agreements, including top officials from various government agencies. Using the International Labour Organization’s assessment of labor provisions in trade and investment arrangements as the analytical framework, findings revealed that while trade agreements increase investments, effects would still depend on how a country uses the agreement's advantages. Labor provisions in agreements and negotiations would result in a comparative advantage for the Philippines since these are already embedded in our constitution and Labor Code. In response, the study provided actionable recommendations for the three (3) phases of negotiations – before, during, and after – which include building institutional capacity, leveling the playing field through consultations, conducting in-depth labor market study, setting up review, monitoring and evaluation mechanisms and protecting Filipino workers, locally and abroad through labor provisions.
Keywords: Free Trade Agreements, employment impact, labor provisions, and trade negotiations
RESEARCHERS: Cayabyab, Loren Art S. | Bondad, Jan Danielle R. | Lumactud, Joyce Anne S.