The Philippines and South Korea concluded talks for a free trade agreement (FTA) and are expected to sign the pact in early 2022.
Top trade officials of the two countries issued a joint statement on Tuesday, October 26, highlighting that the FTA would help the Philippines and South Korea recover from the economic impact of the coronavirus pandemic.
“We are glad that our trade negotiations with South Korea have come to a fruition,” said Philippine Trade Secretary Ramon Lopez.
During the negotiations, both countries were able to resolve the following issues:
- Trade in goods
- Trade remedies
- Rules of origin
- Customs procedures and trade facilitation
- Economic and technical cooperation
- Legal and institutional issues
Negotiations for the FTA started in June 2019.
In a statement, the Department of Trade and Industry (DTI) said the final talks focused on market access for Philippine banana exports and for Korean automotive units and parts.
Currently, Philippine banana exporters pay a hefty tariff of 30% to sell to South Korea. With the FTA, this would be eventually reduced to zero.
“The Philippines was also able to secure tariff elimination for bananas, which was previously excluded under the ASEAN-Korea FTA. Likewise, the discussions allowed for an improved tariff treatment for processed pineapples, as compared to the Regional Comprehensive Economic Partnership concessions,” the DTI said.
The zero-tariff deal for bananas was among the contentious issues that had to be resolved. The DTI, however, did not elaborate on what the Philippines had to bargain for or concede to for both parties to agree on the slashing of tariffs on bananas.
The Philippines’ top exports to South Korea are bananas, pineapples, and copper. The Philippines imports mostly industrial products from the East Asian country.
Meanwhile, the two countries are set to negotiate further regarding provisions on trade in services and investment a year after the planned signing of the FTA. – Rappler.com