Trade Secretary Ramon Lopez and Korean Trade Minister Han-Koo Yeo on Tuesday announced the conclusion of the Philippines-Korea Free Trade Agreement that aims to contribute to economic recovery of both countries.
The two ministers signed and issued a joint statement prior to the ASEAN-Korea Summit. The Department of Trade and Industry said the Philippine government would continue to engage Korea to refine the provisions on tariffs on Philippine banana and pineapple and the commitment of Korea to modernize and invest in the Philippine automotive sector.
“We expect that this agreement will provide significant opportunities for business, investment and jobs both in the Philippines and Korea. This FTA, together with the soon to be ratified RCEP [Regional Comprehensive Economic Partnership] agreement, represent milestones on our path towards a more robust and resilient economic partnership,” Lopez said in a statement.
Philippine bananas and canned pineapples, according to discussions, may enter the Korean market at zero tariff in the fifth and seventh year, respectively, after the agreement came into force.
Lopez said both parties agreed to achieve a mutually beneficial and high level of liberalization on trade in goods. This will stimulate trade and allow for more investments from Korea, providing avenues for Korean companies and industries to diversify and expand their economic interests in ASEAN countries, in line with the promotion of Korea’s New Southern Policy.
“We hope that, through our joint promotion of Korea’s New Southern Policy, our countries may open more platforms for partnerships anchored on mutual benefit and cooperation,” Lopez said.
“We would also like to thank Korea for accepting all our proposals under the economic and technical cooperation chapter, particularly on the inclusion of industrial development and agreeing to cooperate on addressing pandemics and other public health emergencies, among others,” Lopez said.
Both countries also agreed to revisit discussions on trade in services and investment chapters a year after the entry into force of the FTA.
Both sides expect to sign the FTA before February 2022. In November 2019, the Philippines and Korea signed the early achievement package that confirmed the agreement of both sides to lock in the list offered at the time. Taking off from the said achievement package, the two countries resolved outstanding issues that led to the conclusion of the negotiations.
The final negotiations focused on market access for Philippine banana exports and for Korean automotive units and parts.
Lopez said the bilateral FTA with Korea would subsequently improve the trade value of Philippine exports to Korea.