Philippines pushes 10% tariff on agri exports to SoKor

MANILA, Philippines — The government would have to settle for at least 10 percent tariff on all agricultural exports to South Korea if the zero-levy scheme is not approved, the Department of Agriculture (DA) said.

Agriculture Secretary Emmanuel Piñol said he will discuss with his Korean counterpart the request of producers, particularly banana growers, for lower import duties on fresh and processed fruit exports. Piñol will join President Duterte in an official state visit to Korea in the first week of June.

“The no tariff is our original plan. But the 10 percent will be our fallback option if they cannot immediately grant our request,” Piñol told reporters on the sidelines of the International Food Exhibition Philippines 2018.

“We have to understand that the importing countries will also make computations of how much they will lose in terms of revenues. I don’t think they will immediately agree with the zero tariff,” he added.

Korea slaps a 30 percent levy on Philippine fruit exports, particularly bananas and pineapples. The Philippines accounts almost 90 percent of bananas imported by South Korea annually.

“All agriculture commodities will be included in the 10 percent rate. Bananas that they get from Ecuador are not even being slapped with duty,” Piñol said.

The Philippine government will also propose the signing of a preferential trade agreement between the two countries.

“Finance Secretary (Carlos) Dominguez said the setup right now is unfair. For one, fruits from Korea like apples are only slapped with five percent tariff while our bananas are levied 30 percent,” Pinol said.

“That is why our proposal is to at least lower it to 10 percent in the meantime and once the PTA has been signed, we can renegotiate another rate for the tariff,” he added.

The PTA will be handled by the Department of Trade and Industry and will likely cover other sectors other than agriculture.

Furthermore, the DA plans to negotiate the exports of excess egg production to South Korea.

“I already had a preliminary discussion about this with their ambassador and they are receptive,” Pinol said.

The two countries are expected to ink a memorandum of understanding for agricultural cooperation.

Another memorandum under the DA-Rural Development Administration, which calls for the implementation of the Korean Program in International Agriculture Center, will also be amended.