DTI partners with KIAT for FTA digital platform

MANILA, Philippines — The Department of Trade and Industry (DTI) has partnered with the Korea Institute for Advancement of Technology (KIAT) for the development of a digital platform aimed at promoting and increasing free trade agreement (FTA) utilization.

In a statement, the DTI said it recently signed the record of discussion (ROD) with the KIAT for the development and the implementation of the Origin Management System for the promotion of FTAs in the Philippines.

According to the DTI, the project aims to enhance the international competitiveness of Philippine micro, small, and medium enterprises (MSMEs), increase the utilization of existing Philippine FTAs and preferential trade arrangements, and reduce the time and costs of Philippine manufacturers and traders to comply with Rules of Origin requirements of FTAs and Generalized System of Preferences (GSPs).

Key features of the project include the development of an origin management system which will enable exporters to determine whether its export product qualifies under the respective Rules of Origin (ROOs) requirements of FTAs/GSPs by inputting relevant information in the platform; and an artificial intelligence (AI)-enabled HS classification tool that will enable exporters to determine the appropriate HS code/s for their product/s.

The project will run until December 2025.

The Korea Trade Network (KTNET), Korean government’s designated trade automation business service provider, will serve as the implementing consortium for this project.

In contrast, the DTI- Export Marketing Bureau will serve as the implementing lead for the Philippines side.

Trade Undersecretary Ceferino Rodolfo said the project is a vital tool for the Philippines to optimize the Philippines-South Korea FTA and all other Philippine FTAs and preferential trade arrangements.

“The best time to prepare for an FTA’s entry into force is before it is even implemented or while it is being negotiated. This is the reason why, even ahead of the entry into force of the agreement, we have been intensely working with key stakeholders – from business associations, local government units and workers’ groups, among others, to ensure that we are able to realize the potential benefits from the very first year of the Philippines-Korea FTA implementation,” Rodolfo said.

He  said the DTI aims to replicate the experience with the Philippines-European Free Trade Association (EFTA) FTA where the Philippines was able to reverse the phenomenal trade deficit with EFTA in the first year of implementation,”  Rodolfo said.

“This is the first time we have undertaken such a project – mainstreaming the use of technology and digital services to make exporting and availment of FTAs more accessible to Philippine exporters. We are grateful to the Korean government for funding this project,”  he added.

According to its website, KIAT is a quasi non-governmental organization under South Korea’s Ministry of Trade, Industry and Energy established to efficiently and systematically promote industrial innovations and to support policy development in industrial technology.

“This is also the first project embarked on by the KIAT outside of Korea and is a milestone achievement based on a stronger Philippines-Korea partnership,”The DTI said.

In September, Trade Secretary Alfredo Pascual and Trade Minister Ahn Duk Geun signed the Philippine-South Korea FTA in the presence of President Marcos and South Korean President Yoon Suk Yeol at the 24th ASEAN-Korea Summit in Jakarta, Indonesia.

Under the FTA, the Philippines was able to secure tariff elimination for a total of 1,531 lines. Of the total, 1,471 lines are for tariff elimination upon the entry into force of the agreement.

The notable lines with preferential market access include fresh seafood, crustaceans, fruit and nuts, processed food and beverages, sugar and pastry products, waste products and tobacco and tobacco products. In particular, the country was able to secure tariff elimination for banana and processed pineapple exports to South Korea in five and seven years, respectively.

For industrial goods, the Philippines was able to secure tariff elimination for a total of 9,909 lines. About 9,747 lines are for tariff elimination upon entry into force of the agreement.