The Philippines and Korea have concluded their negotiations for a free trade agreement (FTA) after more than two years of talks, a joint statement of the two countries yesterday said.
The FTA document will be signed before February 2022, according to Trade Secretary Ramon Lopez.
The conclusion of the negotiations for the FTA that were officially launched in June 2019 was generally described by Lopez as a “good deal deal for our farmers” as tariffs on bananas and canned pineapple will be eliminated in five years and seven years respectively from the current 30 percent.
Duties on some automotive parts from Korea will also be eliminated in five years, according to Lopez.
The final negotiations on market access focused on Philippine banana exports and for Korean automotive units and parts.
The Philippines was able to secure tariff elimination for bananas, which was previously excluded under the Asean-Korea FTA. The deal allowed for an improved tariff treatment for processed pineapples, as compared to the Regional Comprehensive Economic Partnership (RCEP) concessions.
Under the joint statement signed yesterday by Lopez and Korean Trade Minister Han-Koo Yeo, both countries agreed to further negotiate provisions for the Chapters on Trade in Services and Investment no later than one year after entry into force of the Korea-Philippines FTA.
“(These chapters are) for next discussion. We can close the negotiations on market access for Philippine bananas and processed pineapples,” Lopez said.
Both countries acknowledged the FTA will help contribute to the economic recovery efforts of the Philippines and Korea.
According to Lopez, with the RCEP agreement complemented by this bilateral FTA with Korea, the trade value of Philippine exports to Korea will now be substantially covered.
Hence, it will make the Philippine exports competitive in the said market.
“We were able to achieve a mutually beneficial and high level of liberalization on trade in goods. This will stimulate trade and hopefully allow for more investments from Korea providing avenues for Korean companies and industries to diversify and expand their economic interests in other Asean countries, which is in line with the promotion of Korea’s New Southern Policy,” Lopez said.
Lopez expressed gratitude to Korea for accepting all the country’s proposals under the Economic and Technical Cooperation Chapter, particularly on the inclusion of industrial development and agreeing to cooperate on addressing pandemics and other public health emergencies, among others.
