The Philippines and South Korea signed an “Early Achievement Package” ahead of the conclusion of the free trade agreement by the first half of 2020.
It contains the progress of the trade negotiations, including the status of priority products such as banana, garments and auto parts for the Philippines and pharmaceuticals, petrochemicals and auto parts for South Korea.
Trade Secretary Ramon Lopez and his Korean counterpart Minister Yoo Myung-hee signed the package on Nov. 25 at the sidelines of the ASEAN-Korea Commemorative Summit in Busan, South Korea.
The two ministers, in a joint statement, affirmed that the Early Achievement Package would be further improved and incorporated in the free trade agreement.
Negotiations for the Philippines-Korea Free Trade Agreement began in June 2019 to advance economic relations by enhancing trade and investment flows between the Philippines and South Korea through the removal of trade barriers and the creation of business and investment opportunities.
Since then, rounds of negotiations were convened from June to September, with inter-sessional meetings in October and November. The negotiating teams concluded the chapter on competition and made significant headway on the remaining six chapters: trade in goods, trade in services, investment, rules of origin, economic and technical cooperation and legal and institutional issues.
Lopez said that while the free trade negotiations were not concluded this November, both sides achieved substantial progress both in the market access and text-based negotiations in a span of just six months.
He said that for the Philippines, the goal was to improve market access for agricultural products such as bananas and other tropical fruits, as well as industrial products and other services.
Bananas are a particular interest to the Philippines to level the playing field with its competitors. With a tariff rate of 30 percent for banana exports to South Korea, the Philippines is at a disadvantage to Vietnam, which will enjoy zero tariffs by 2024.
Peru already has zero tariffs for banana exports, while other Central American countries will enjoy the same perk by 2021.
“The FTA, once enforced, will be an important vehicle for improving the balance of trade with South Korea through enhanced trade flows, facilitating the movement of natural persons, and generating more investment opportunities and by extension, job generation possibilities,” Lopez said.
South Korea is the Philippines’ fourth major trading partner, eighth export market and second import supplier in 2018, with total trade amounting to $13.92 billion. Top exports to South Korea include bananas and electrical and semiconductor products while top imports are petroleum and integrated circuits.
COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by manilastandard.net readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of manilastandard.net. While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.