Philippines and South Korea trade ministers have agreed to work for the signing of the bilateral free trade agreement (FTA), preferably during the 24TH ASEAN-Republic of Korea Summit next month in Indonesia.
Trade and Industry Secretary Alfredo E. Pascual relayed the new development after meeting with his South Korean counterpart Minister Dukgeum Ahn at the sidelines of the 55th AEM Meeting in Semarang, Indonesia over the weekend where both ministers discussed greater economic engagements between the two countries.
“Both Ministers welcomed the conclusion of the PH-ROK FTA negotiations and agreed to work for its signing, preferably at the sidelines of the 24th ASEAN-Republic of Korea (ASEAN-ROK) Summit in September 2023,” the DTI said in a statement.
In addition, the ministers agreed to work on a possible supply chain resilience cooperation to ensure stability and predictability of business operations, particularly in the manufacturing sector.
Both parties concluded the FTA negotiations on Oct. 26, 2021, two years after it was launch in June 2019.
The concluded Korea-Philippines FTA negotiations cover Trade in Goods, Trade Remedies, Rules of Origin, Customs Procedures and Trade Facilitation, Economic and Technical Cooperation, Competition, and Legal and Institutional Issues.
Both parties also agreed to further negotiate provisions for the Chapters on Trade in Services and Investment no later than one year after entry into force of the Korea-Philippines FTA. Philippines and Korea also committed to complete all necessary domestic procedures towards the signing of the Korea-Philippines Free Trade Agreement in early 2022.
The FTA would further liberalize trade in goods between the two countries, including gradual elimination of tariffs on Philippine bananas and canned pineapple exports and exports of Korean automobiles and autoparts.
Both parties acknowledged that the FTA will help contribute to the economic recovery efforts of the Philippines and Korea.
Once enforced, the FTA with South Korea will be an important vehicle for enhancing trade flows, and generating more investment and employment opportunities in the process. The bilateral FTA will be the third for the Philippines,
“We are glad that our trade negotiations with South Korea have come to a fruition. We also thank Minister Yeo and the Ministry of Trade, Industry and Energy (MOTIE) for their continued collaboration in facilitating a wider economic cooperation with our Philippine trade department,” Lopez said.
Both trade partners have acknowledged that the FTA can contribute to the swift recovery for the robust and resilient growth of the economies of the two countries.
At the conclusion of the trade talks, both parties called the deal mutually beneficial and paving the way for high level of liberalization on trade in goods.
Following the conclusion of negotiations, both parties were looking at signing the PH-ROK FTA during the 40TH AND 41ST ASEAN Summits and Related Summits in November last year in Phnom Penh, Cambodia.
The signing, however, did not materialize as both parties were still reviewing text and provisions of the trade deal.
Conclusion of the trade deal has been delayed for quite sometime already, largely due to market issues for goods, particularly on the exports of Philippine bananas and pineapples to South Korea. The Philippines fruits are being levied a 30-percent tariff, putting them a disadvantaged against competing exports from Vietnam which tariff rate will eventually reduce to zero.
The PH-ROK FTA Negotiations was launched in June 2019 in Seoul by former Trade and Industry Secretary Ramon Lopez and South Korea's Minister for Trade Yoo Myung-hee.