July 12, 2019
Negotiations for the Free Trade Agreement (FTA) between the Philippines and South Korea will likely be completed by September, a cabinet official said on Thursday.
“Technically they have to be finished sometime September, [the] negotiations and terms, so that it can be ready for signature by November,” Trade Secretary Ramon Lopez said during the Philippines-Korea Business Forum at the Conrad Hotel in Pasay.
The FTA aims to enhance both parties’ market access for products and services. It is also seen to open more opportunities for investment and collaboration for research and development.
Lopez said the FTA is also expected to address the trade imbalance between the two countries.
Data from the Philippine Statistics Authority (PSA) showed South Korea is currently the 8th largest trading partner of the Philippines. Total trade as of May amounted to $978 million. Total value of imports from South Korea reached $750 million, while exports was $227 million, resulting in a trade deficit of $522 million.
“We recognize that there is a trade imbalance and that is the reason why we truly appreciate the efforts extended by the Korean government to look at other products that they can buy in the Philippines in the hope of narrowing that trade imbalance,” Lopez said.
“As we talk of trade imbalance, that is mainly the reason why we initiated the elevation of our trading relationship with South Korea,” he added.
Lopez said negotiation teams will finalize the major agreements including the list of products to be included and the tariff reduction program.
“The target is to have it signed by November. The original intention is for us to have a better tariff of bananas,” he said. The Philippines is pushing for the reduced tariff of 5 percent for bananas entering the Korean market. At present, tariff of bananas to South Korea is 30 percent.
“Biggest from our end are bananas, pineapple, mangoes, even some industrial products, auto parts, and processed food. From their end, auto parts and some products that we are not producing,” said Lopez.
The Korea Importers Association (Koima) is currently in the country to look for possible products to buy and sectors to invest in. “One thing I am worried about is the trade imbalance between our two nations.
However, the bright side is Korean importers are getting more interested,” Koima Chairman Kwang-hee Hong said.
“This import delegation will continue to increase and balance trade between us. I’m very positive that today’s meeting provides you with meaningful opportunities,” he added.
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