THE free trade agreement (FTA) between the Philippines and South Korea is now expected to be finalized by April, as optimism toward a conclusion rose after the two parties revamped their lineup of negotiators.
Trade Secretary Ramon M. Lopez said both governments changed their team of negotiators to bring a fresh environment to the table. With the reorganization, the Philippine side is now headed by Trade Undersecretary Ceferino S. Rodolfo, taking over the position previously held by Trade Assistant Secretary Allan B. Gepty.
Rodolfo is known to be one of Lopez’s trusted aides in the Department of Trade and Industry, and is frequently assigned to negotiate or renegotiate trade deals, as well as secure new investments for the Philippines.
“[The FTA talks with] Korea is moving. Hopefully, we finish Korea after April,” Lopez said in an interview with reporters last week.
“That’s the next target, before the visit of the Korean president here. I met the South Korean minister recently, and our discussions there are continuing. Hopefully, we can finalize it [since] our negotiating teams were changed,” he added.
The change in negotiators also signaled that the final FTA package will include developmental provisions outside of the usual contents on trade in goods, trade in services and investments, Lopez explained. He said innovation clauses will likely be inserted in the trade deal to pave the way for future partnerships between the Philippines and South Korea.
“It’s not just tariff that we are talking about here; they [negotiators] see a broader picture,” the trade chief said. “Hopefully, we can agree on certain terms that not only tariff will be discussed. Future investment, innovation, those are what we want to be included.”
Under an FTA with South Korea, the Philippines is eyeing to reduce, if not eliminate, tariff rates on agricultural products, particularly banana. Banana exports from the country are slapped 30 percent of duty when entering the South Korean market, making it less competitive compared to those shipped by Vietnam and Central American countries.
Bananas from Peru are taxed zero rate at present in South Korea, while those from the Central Americas and Vietnam will enjoy similar preferential treatment by 2021 and 2024, respectively.
On the other hand, Seoul is demanding that Manila erase tariffs on automobile and parts. The Philippines applies a duty of 5 percent on vehicles 3,000 cc and below that are made in South Korea as concession to a regional deal.
Last year, bilateral trade between the Philippines and South Korea declined nearly 18 percent to $11.43 billion, from $13.92 billion in 2018, according to Philippine Statistics Authority data.
Official figures reported exports to South Korea jumped 23.07 percent to $3.2 billion, from $2.6 billion, on increased shipments of electronic parts and banana. Imports, on the other hand, fell over 27 percent to $8.22 billion, from $11.31 billion.