By Bernie Cahiles-Magkilat and Madelaine B. Miraflor
As negotiations for free trade agreement (FTA) between Philippines and South Korea remain on a stalemate, both countries may settle for the issuance of a joint statement on “early achievements” in what could be a face-saving attempt for their failure to conclude a comprehensive deal they had planned to accomplish in time for the 30th ASEAN-Korea Commemorative Summit, which opens today in Busan.
Trade and Industry Secretary Ramon M. Lopez said trade ministers from both countries may issue a joint statement on “early achievements” during their bilateral meeting on the sidelines of the leaders’ summit.
The summit, attended by leaders of the 10 ASEAN countries, marks the 30th anniversary of the dialogue partnership between ASEAN and the Republic of Korea.
Lopez said the “early achievements” package would cover the preliminary areas where both countries have agreed to liberalize.
“We basically commit to work towards the improvement of this package for completion next year or in the first quarter of 2020,” said Lopez. The “early achievements” package would also detail the timelines and the pace of tariff reduction.
Lopez, however, noted that the “early achievement” package is substantial already as it includes the milestones as to the pace of tariff reduction like the rate cuts and schedules.
“We agree to report to leaders our early achievements and commit to conclude the negotiations by the first quarter or sometime next year,” said Lopez.
Still, Lopez expressed hope of last-minute submissions from Korea so leaders of both countries can sign the FTA this week.
On June 3 this year, Lopez and Minister for Trade, Industry, and Energy Yoo Myung-hee officially launched the negotiations of the PH-ROK Free Trade Agreement. Both ministers agreed to come up with a comprehensive and future-oriented FTA.
But negotiators have difficulties agreeing on the liberalization of agriculture and automobile products.
The Philippines would like Korea to bring its tariff on Philippine agricultural exports, mostly bananas and mangoes, to 5 percent if not zero from the current 30 percent. This rate should put the Philippines at parity with the tariff rates granted by Korea to other banana exporters.
For its part, South Korea negotiators want the Philippines to bring down to zero the 5 percent duty on Korean cars to be at par with the ASEAN countries and extend preferential duty treatment for South Korean car parts.
Philippine negotiators have been considering the Korean request on condition that Korean carmakers commit to invest in car manufacturing in the country.
However, Korean car companies have remained non-committal on their investment plans for the Philippines.
If this trade deal is signed, it will be the Philippines’ third FTA after the Philippines-Japan Economic Partnership Agreement in 2008 and the Philippines FTA with EFTA States Iceland, Liechtenstein, Norway and Switzerland on June 1, 2018.
Meantime, the Pilipino Banana Growers and Exporters Association, Inc. (PBGEA) is hoping that President Rodrigo Duterte will bring up anew tariff rate on Philippine bananas during his bilateral meeting with South Korean President Moon Jae-In scheduled today (Monday).
The plea of the country’s banana growers for South Korea to lower its tariff is already looking to be a lengthy process.
To recall, Duterte first brought up the issue on banana imports during his state visit to South Korea in April last year.
What PBGEA wants now is for the governments of Manila and Seoul to already work on the speedy end to the issue of very high import tariffs imposed on Philippine bananas.