THE Pilipino Banana Growers and Exporters Association (PBGEA) is urging President Duterte to break the stalemate in talks between Manila and Seoul for the reduction of South Korea’s tariffs on Philippine cavendish ahead of a bilateral meeting this week.
PBGEA said Manila and Seoul should work on a “speedy end to the issue of very high import tariffs imposed on Philippine bananas.”
“The negotiations between the Philippines and Korea have been on a stalemate as Korea insists on greater market access for its automotive exports to the Philippines in exchange for a lower if not zero tariffs for Philippine bananas,” the association said in a statement on Sunday.
PBGEA Executive Director Stephen Antig said prolonging the negotiations would be disadvantageous to Filipino banana exporters as competition against Latin American producers gets stiffer.
“The negotiations have only started in the second quarter while the tariff rates for our competitors have been getting more and more favorable to our disadvantage,” Antig said.
President Duterte is set to headline a bilateral meeting with his South Korean counterpart President Moon Jae-in this week at the Westin Chosun Hotel in Busan.
The negotiation is a side event to the two-day 30th Asean-Republic of Korea Commemorative Summit dialogue partnership.
“[We] hope Duterte will raise anew the issue on banana import tariffs with Moon during the bilateral talks, along with other concerns on the proposed free-trade agreement [FTA] between the two countries,” PBGEA said.
PBGEA noted that Duterte first raised the matter during his state visit to South Korea in April 2018.
The Philippines has been pushing for a reduction in South Korea’s tariffs on cavendish for so long now, according to PBGEA. At present, Philippine banana exports to the East ASian country are slapped with a 30-percent tariff.
The Philippines eyes to reduce it to at least 5 percent, if not zero, PBGEA said.
PBGEA said the urgency for the tariff reduction is growing as South Korea’s trade deal with five Central American banana-exporting countries took effect in October.
The trade deal reduced the tariffs South Korea imposes on bananas from Costa Rica, El Salvador, Honduras, Nicaragua and Panama, which are competitors of the Philippines in the global banana market, according to PBGEA.
This, the group noted, is worrisome as the Philippines’s share of the South Korean banana market would be reduced by the anticipated higher shipments from the Central American countries.
“The Central American bananas have been slowly eroding the market share of the Philippines. If this continues any further, the Philippines will not be able to compete,” PBGEA President Victor Mercado Jr. said.
South Korea is the country’s third-most important banana market, next to China and Japan. Despite the high import tariff, banana shipments to this East Asian country reached 420,344 metric tons (valued at $203.69 million) in 2018, from 379,144 MT ($176.55 million), according to PBGEA.
