Stalled deal imperils PH bananas

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    The Pilipino Banana Growers and Exporters Association Inc. (PBGEA) is calling on both South Korean and Philippine governments to immediately resolve the stalemate on the proposed reduction of tariff rates on banana exports.

    South Korea insists on greater market access for its automotive exports to the Philippines in exchange for a lower, if not zero, tariff on bananas from the Philippines.

    Banana shipments to South Korea are taxed 30 percent but the country’s negotiators want this reduced to at least 5 percent, if not zero.

    “The negotiations have only started in the second quarter while the tariff rates for our competitors have been getting more and more favorable to our disadvantage,” said Stephen Antig, PBGEA executive director.

    The group is hopeful this will be resolved in bilateral meetings between Korea and Japan at the sidelines of the two-day 30th Asean-Republic of Korea Commemorative Summit dialogue partnership in Seoul.

    The banana issue forms part of the stalled conclusion of the Philippines-Korea free trade agreement (FTA).

    The initial round of talks on the bilateral FTA was held last June with the aim of improving trade and investment activities between the two economies wherein the Philippines hopes to translate to improved market access for its agricultural products such as banana, pineapple, okra, avocado, poultry products and mango in exchange for South Korea’s industrial goods.

    South Korea is the country’s third most important banana market, next to China and Japan.

    Despite the high tariff, banana shipments to South Korea last year, reached 420,344 metric tons (MT) valued at $203.69 million from the prior year’s 379,144 MT valued at $176.55 million.

    However, banana growers are worried the share of the fruit from the Philippines in the South Korean market may be reduced, as Central American economies including Costa Rica, El Salvador, Honduras, Nicaragua and Panama, have secured trade deals with Seoul.

    The trade deals reduced, if not eliminated, tariff on bananas effective last October.

    “The Central American bananas have been slowly eroding the market share of the Philippines. If this continues any further, the Philippines will not be able to compete,” said Victor Mercado Jr., PBGEA president.