This agreement paves the way for enhanced trade, industrial collaboration, and resilient supply chains, fostering opportunities for businesses and consumers alike, the Department of Trade and Industry (DTI) said in a statement.
EZero tariff on bananas
Signed on Sept. 17, 2023, the FTA represents a significant move to facilitate trade, enhance cooperation, and promote industrial growth across priority sectors.
One of the FTA’s highlights is the gradual elimination of tariffs on fresh bananas, a critical export for the Philippines, the DTI said.
Tariffs will drop from 24 percent in 2024 to zero by January 2028, enhancing the competitiveness of Philippine bananas in South Korea's market against regional competitors like Vietnam.
Safeguards
The DTI emphasized that the FTA safeguards sensitive Philippine industries by maintaining tariff protections on certain goods, including some plastics and petrochemical products; beverages including liqueur; batteries and battery components; sugar and confectionery goods; and agricultural products such as fish, dairy, fresh fruit and vegetables, processed meat and meat products, sauces and condiments, and pastry goods.
South Korea, meanwhile, benefits from the FTA through lower tariffs on automotive vehicles, parts, and components, especially for commercial passenger and transport vehicles, making its products more competitive in the Philippine market.
Technical cooperation
Beyond tariff reductions, the FTA emphasizes economic and technical cooperation, targeting sectors like health and scientific manufacturing, R&D, creative industries, and e-commerce.
This includes sharing best practices, joint R&D, and technology transfer, especially for micro, small, and medium enterprises (MSMEs).
To operationalize these commitments, the Philippines and South Korea signed the Implementing Arrangement for Economic and Technical Cooperation pursuant to the bilateral FTA. This specifically outlines priority projects for implementation.
Consultations
To ensure prompt and targeted action on the identified areas for cooperation, both sides will begin consultations within six months of the FTA’s entry into force. These consultations will identify specific projects, including their respective resource requirements and possible funding sources.
Consultations will involve relevant stakeholders, with both sides committed to establishing and sustaining active communication channels for ongoing discussions about project development.
“The implementation of this bilateral FTA is a significant stride in growing trade and investment between the Philippines and South Korea, as it represents a collective achievement that will truly set the stage for the growth of our industries and businesses,” said Trade Secretary Cristina A. Roque.
3rd free trade deal
The FTA with South Korea is the Philippines’ third free trade agreement, following the Philippines-Japan Economic Partnership Agreement signed in September 2006 and entered into force in December 2008, and the Philippines-European Free Trade Area FTA signed in April 2016 and took effect in June 2018.
In 2023, South Korea ranked fifth among the Philippines’ 230 trade partners, fifth out of 205 export markets, and fourth out of 221 import suppliers. —Ed: CSN
