Philippines, South Korea wrap up talks on free trade

MANILA, Philippines — The Philippines and Korea have concluded negotiations for a free trade agreement (FTA), which is aimed to be signed before February next year.

Trade Secretary Ramon Lopez and South Korean Trade Minister Yeo Han-Koo signed and issued the joint ministerial statement at the conclusion of the negotiations for the FTA yesterday.

Negotiations for the Korea-Philippines FTA, which started in June 2019, covered trade in goods, trade remedies, rules of origin, customs procedures and trade facilitation, economic and technical cooperation, competition, and legal and institutional issues.

The Department of Trade and Industry (DTI) said the trade in goods and economic and technical cooperation chapters are set to be finalized by both sides with a view to ensuring closer collaboration toward a robust post-pandemic recovery.

The final negotiations focused on market access for Philippine bananas and Korean automotive units and parts.

Through the FTA, the Philippines secured the elimination of tariff on banana exports, which was previously excluded under the ASEAN (Association of Southeast Asian Nations) - Korea FTA.

Lopez said the 30 percent tariff for Philippine bananas entering South Korea would be brought down to zero in five years.

He said there would also be improved access for processed pineapples from the Philippines, with the reduction of tariff to zero in seven years. For some of South Korea’s auto parts, he said the tariffs would be reduced in five years.

Both countries committed to complete all necessary domestic procedures toward the signing of the FTA by early next year.

“We endeavor to have the FTA signed before February 2022,” Lopez said.

The two countries also 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 FTA.

The FTA is expected to contribute to recovery efforts of the two countries from the pandemic.

“We expect that this agreement will provide significant opportunities for business, investment and jobs both in the Philippines and Korea. This FTA, together with the soon to be ratified RCEP (Regional Economic Partnership) Agreement, represent milestones on our path towards a more robust and resilient economic partnership,” Lopez said.