PHL, Korea to conclude free trade pact by 202027/11/2019
The Philippines and South Korea have agreed to conclude the two countries’ free trade agreement by the first half of 2020.
This was the commitment between Trade Secretary Ramon Lopez and his South Korean counterpart Minister Yoo Myung-hee after the Trade ministers signed an “early achievement package” on November 25 at the sidelines of the ASEAN-Korea Commemorative Summit in Busan, South Korea.
“Based on this progress, the Ministers reaffirmed their strong commitment to conclude the PH-KR FTA (Philippines-Korea Free Trade Agreement) negotiations within the first half of 2020,” Lopez and Yoo said in a joint statement.
The “early achievement package” reports the progress of the trade negotiations, including priority products such as banana, garments, and auto parts for the Philippines and pharmaceuticals, petrochemicals, and auto parts for South Korea, the Department of Trade and Industry (DTI) said Tuesday.
The Trade ministers affirmed that the “early achievement package” will be further improved and incorporated in the free trade agreement.
“Moving forward and in keeping with the principle of single undertaking, this Package will be improved through consideration of additional tariff lines and/or other mechanisms that will further facilitate trade and investments and will be incorporated when finalizing the PH-KR FTA,” Lopez and Yoo said.
The Philippine and South Korean Trade chiefs have also affirmed the following:
• The Ministers reiterated the importance of the PH-KR FTA and acknowledged that the PH-KR FTA would serve as a platform for expanding trade and maximizing the potential of the economic relationship between the two countries.
• The Ministers shared the view that the PH-KR FTA should be mutually beneficial between the Philippines and Korea and build upon the multilateral and regional agreements being implemented where the two countries are parties.
• The Ministers welcomed that there was an agreement on an Early Achievement Package on Market Access for Goods of November 2019 between the two countries and the substantial progress of the text-based negotiations of the PH-KR FTA Chapters.
Negotiations for the PH-RK FTA began in June 2019 to advance economic relations by enhancing trade and investment flow between the Philippines and South Korea through the removal of trade barriers and the creation of business and investment opportunities.
Since then, rounds of negotiations have been convened from June to September, with intersessional meetings in October and November, according to the DTI.
“So far, the negotiating team concluded the Chapter on Competition and made significant headway on the remaining six chapters: Trade in Goods, Trade in Services, Investment, Rules of Origin, Economic and Technical Cooperation, and Legal and Institutional Issues,” it said.
Lopez noted that while the free trade negotiations have not been concluded this November, it is commendable that both sides have achieved substantial progress both in the market access and text-based negotiations in a span of just six months.
For the Philippines, the trade chief said that the goal was to improve market access for agricultural products such as bananas and other tropical fruits, as well as industrial products and other services.
Bananas are a particular interest to the Philippines to level the playing field with its competitors.
With a tariff rate of 30% for banana exports to South Korea, the Philippines is at a disadvantage to Vietnam, which will enjoy zero tariffs by 2024.
Peru already has zero tariffs for banana exports, while other Central American countries will enjoy the same perk by 2021.
“The FTA, once enforced, will be an important vehicle for improving the balance of trade with South Korea through enhanced trade flows, facilitating the movement of natural persons, and generating more investment opportunities and by extension, job generation possibilities,” Lopez added.
South Korea is the Philippines’ 4th major trading partner, 8th export market and 2nd import supplier in 2018, with total trade amounting to $13.92 billion.
Top exports to South Korea include bananas and electrical and semiconductor products while top imports include petroleum and integrated circuits. Through the FTA, the Philippines hopes to increase exports of food and agriculture-based products, auto parts, organic and natural products, and design-driven products like garments and furnishings, among others.
Source: GMA News
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