The Philippines and Korea have concluded negotiations for a bilateral Free Trade Agreement (FTA), more than two years after both countries agreed to achieve a comprehensive and future-oriented trade deal.
A joint statement issued Tuesday, Oct. 26, announcing the conclusion of the FTA talks, was signed by Philippines Trade and Industry Secretary Ramon M. Lopez and Korea Trade, Industry and Energy Minister Yeo Han-Koo.
The concluded Korea-Philippines FTA negotiations covered Trade in Goods, Trade Remedies, Rules of Origin, Customs Procedures and Trade Facilitation, Economic and Technical Cooperation, Competition, and Legal and Institutional Issues.
Both parties 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 Korea-Philippines FTA.
The Philippines and Korea also committed to complete all necessary domestic procedures towards the signing of the Korea-Philippines Free Trade Agreement in early 2022.
During the trade negotiations, the Philippines haggled for parity if not zero tariff for agricultural exports, particularly bananas and pineapples, while Korea wanted its motor vehicles and parts to enter the Philippines at the same tariff at least with that of ASEAN-made vehicles, which are mostly Japanese brands.
Already, Trade and Industry Secretary Ramon M. Lopez called the FTA a good deal for the Philippine agriculture. Once the FTA is implemented, Philippine bananas will be allowed to enter Korea at zero duty in five years, while canned pineapples are also at zero duty in seven years.
Certainly, Korea is also getting good duty treatment for their exports of motor vehicles and auto parts into the Philippine market where Korean cars have a growing share.
Both trade partners have acknowledged that the FTA can contribute to the swift recovery for the robust and resilient growth of the economies of the two countries.
At the conclusion of the trade talks, both parties called the deal mutually beneficial and paving the way for high level of liberalization on trade in goods.
Secretary Lopez himself said that once the Philippines-Korea FTA is implemented, it will stimulate trade and hopefully allow for more investments from Korea providing avenues for Korean companies and industries to diversify and expand their economic interests in other ASEAN countries, which is in line with the promotion of Korea’s New Southern Policy.
Although the details are still unclear and deserve further scrutiny, the conclusion of negotiations is already considered a breakthrough following long delays on what was then seen a breeze trade deal.
It was more doubly meaningful that the bilateral FTA, a third for the Philippines, was being forged and concluded during a time of severe hardships brought about by the prolonged pandemic.
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