The reduction of tariffs in key markets for Philippine bananas, such as South Korea and Japan, may drive local exporters out of business, according to the Pilipino Banana Growers and Exporters Association (PBGEA).
The PBGEA noted that cheap banana imports from Central America have started to eat into the share of Philippine bananas in the Korean market simply because Central American countries were able to secure bilateral agreements on zero-tariff treatment for their bananas.
The Central American countries of Costa Rica, El Salvador, Honduras, Nicaragua and Panama will benefit from zero import tariffs on bananas to South Korea by 2021. Peru is already enjoying zero tariffs on banana exports to South Korea, while Colombia will get the same treatment three years from now.
“Even Vietnam, a fellow Asean economy, will get to sell bananas to South Korea at zero tariffs by 2021,” said Victor S. Mercado of the Marsman Agribusiness Group, the newly elected president of PBGEA, in a statement.
The high import tariff imposed on Philippine bananas is shouldered by the buyer in Korea, so even if the country is geographically nearer, businessmen planning to sell the fruit in the Korean market would prefer to buy from Central America because of the zero tariffs.
According to Mercado, PBGEA officials, led by Stephen Antig, will hold talks with their business partners in South Korea, where import tariffs for Philippine bananas remain high, to ask them to convince their government to come up with a bilateral agreement with the Philippines to lower the tax from 30 to zero percent.
Antig is set to go to South Korea by end-November and will later proceed to Japan, another major market for the country’s banana sector, to talk with PBGEA’s business counterparts, and possibly Japanese officials, also on the issue of eliminating tariffs for Philippine bananas.
Other PBGEA executives led by Benny Corcolon are also scheduled to go to the Australian capital of Canberra on November 27 to meet with government officials there and raise with them the possibility of allowing Philippine banana exports during the lean months, so as not to compete with Australian banana growers.
“We only want a level playing field in South Korea, Japan and other markets where our bananas are taxed heavily,” Antig said.
“We have long been urging our government officials to be more vigorous in seeking fair treatment for our banana exports. But it seems their efforts are not enough so we are also doing our part by talking to our business counterparts and foreign officials as well, before we lose our share in these markets,” he added.