Philippine, SoKor FTA seen by early next year

MANILA, Philippines — The Philippines and South Korea have signed an early achievement package on talks for a free trade agreement (FTA) and vowed to complete negotiations within the first half next year.

Trade Secretary Ramon Lopez and South Korea Minister for Trade Yoo Myung-hee said in a joint statement the early achievement package, which provided a report on the progress on trade negotiations and was signed on the sidelines of the Association of Southeast Asian Nations (ASEAN) – Korea Commemorative Summit on Nov.25, would be improved as the parties finalize the trade deal.

“Based on this progress, the ministers reaffirmed their strong commitment to conclude the Philippines-Korea FTA negotiations within the first half of 2020,” Lopez and Yoo said.

Both the Philippines and South Korea initially aimed to complete the talks and sign the FTA this month in time for the ASEAN-Korea Summit, but the parties have yet to agree on requests being put forward on the negotiating table.

While the free trade negotiations have not been concluded as targeted this month, Lopez said substantial progress has been made in the market access and text-based negotiations which started in June this year.

So far, the negotiating team has concluded the chapter on competition and made significant headway on the remaining six chapters: trade in goods, trade in services, investment, rules of origin, economic and technical cooperation, and legal and institutional issues.

For the Philippines, Lopez said the goal is to improve market access for agricultural products such as bananas and other tropical fruits, as well as industrial products and other services through the FTA.

Banana is a product of particular interest to the Philippines as the country’s exports are currently slapped a higher 30 percent tariff when these enter South Korea, much higher compared with other banana exporting countries.

Peru currently enjoys zero tariff for banana exports to South Korea, while other Central American countries are set to have the same benefit by 2021, and Vietnam will have the same perk by 2024.

“The FTA, once enforced, will be an important vehicle for improving the balance of trade with South Korea through enhanced trade flows, facilitating the movement of natural persons, and generating more investment opportunities and by extension, job generation possibilities,” Lopez said.

Products being pushed by South Korea under the planned FTA, meanwhile, are pharmaceuticals, petrochemicals and auto parts.

Apart from signing the early achievement package, Lopez also met with executives from South Korean companies planning to expand in the Philippines.

These companies are Daesang Corp. (food), Hyundai Engineering & Construction Co. Ltd. (construction);  Developer City Co. Ltd. (property development); JDS Development Corp. (dredging);

Korea Overseas Investment and Urban Development (support for public-private partnership investment); LG CNS (information technology services); Pan Co Ltd. (recycle plant facilities);  Dohwa (civil engineering); Dae lL Corp. (automobile parts and heavy industry parts); and  Zein Motors (electric vehicles).

South Korea is the Philippines’ fourth major trading partner, with total trade reaching over $13 billion last year.

Top exports of the Philippines to South Korea include bananas and electrical and semiconductor products.

Meanwhile, South Korea’s exports to the Philippines include petroleum and integrated circuits.