While there have been delays, Trade Secretary Ramon Lopez said the signing of the country’s free trade agreement (FTA) with South Korea will be done “soon.”
The Department of Trade and Industry (DTI) chief told the BusinessMirror on Monday that the Philippines-South Korea trade pact will be signed in March.
The FTA was originally expected to be inked before February this year but Lopez said there were still some “legal scrubbing” to do, pushing back the deadline.
Manila and Seoul concluded their FTA talks in October 2021 after over two years of negotiations.
Their FTA talks covered Trade in Goods, Trade Remedies, Rules of Origin, Customs Procedures and Trade Facilitation, Economic and Technical Cooperation, Competition, and Legal and Institutional Issues.
Prior to this, the Philippines and Korea inked in November 2019 an Early Achievement Package, which cited the progress of the trade negotiations. This included priority products such as bananas, garments, and auto parts for the Philippines; and pharmaceuticals, petrochemicals, and auto parts for South Korea.
Lopez earlier said that Philippine bananas, under the FTA, will start enjoying zero tariffs when entering Korea in five years, while canned pineapples will see zero duty in seven years.
“The final negotiations focused on market access for Philippine banana exports and for Korean automotive units and parts. The Philippines was also able to secure tariff elimination for bananas, which was previously excluded under the Asean-Korea FTA,” DTI said in a previous statement.
The trade department said that bananas are of “particular interest” to the country given that they are currently slapped with a 30-percent tariff upon entering South Korea, which puts the Philippines at a disadvantage to other countries that enjoy zero duties.
Following the signing of the FTA, both parties intend to tackle next the “Chapters on Trade in Services and Investment no later than one year after entry into force of the Korea-Philippines Free Trade Agreement.”
Lopez previously said that the economic pact “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.”
According to the Philippine Statistics Authority, the Philippine exports to Korea declined by 9.9 percent to $2.57 billion last year from $2.85 billion in 2020. Imports from Korea, meanwhile, surged by 35.5 percent to $9.35 billion in 2021 from $6.9 billion year-on-year.