DTI eyes June ’21 end of FTA talks with Korea

THE Department of Trade and Industry (DTI) wants to complete by June the free trade negotiations with South Korea, which have been delayed by the Covid-19 pandemic.

Trade Undersecretary Ceferino Rodolfo, in a recent interview with reporters, said that Manila and Seoul will have a bilateral meeting in the first half of April to discuss their technical needs under the free trade agreement (FTA), including market access.

“It’s now timely to resume negotiations on the remaining issues, in particular on the market access for goods,” Rodolfo said. “On the Philippines’s side, our aim is to be able to conclude discussions and resolve all the divergent issues by end of June this year.”

Apart from the pandemic, the DTI official traced the delays in the discussion to a vacancy in South Korea’s chief negotiator post. Rodolfo said Seoul just recently appointed an official, his counterpart.

Rodolfo wants to fast-track the process so the deal can be presented to Congress for approval before the 2022 elections. He said it will still take a few months for the parties to sign the FTA after the negotiations are completed, if ever, in June to make way for further review.

In 2019, the Philippines and South Korea launched their FTA negotiations with the hope of concluding talks by November of the same year. But the parties only signed an early achievement package in 2019, moving the deadline to first half of 2020.

At the time, they had only settled a chapter on competition. Manila and Seoul are yet to work on other matters, including trade in goods, trade in services, investments, rules of origin, economic and technical cooperation and legal and institutional issues.

The DTI also targeted deadlines to finish the FTA talks last year— one in April and another in November—but was not able to meet them as well. The Philippines is eyeing to reduce, if not lift, the tariff on agricultural products shipped to Korea, particularly bananas, under the FTA deal.

Currently, the country’s banana shipments to Seoul are given 30-percent duty. This puts the Philippines at a disadvantage given that Central American countries and Vietnam are given or will receive preferential treatment on their banana exports to South Korea.

South Korea, meanwhile, is asking the Philippines to eliminate the 5-percent tariff for vehicles 3,000 cc and below.

According to the Philippine Statistics Authority, the country’s exports to Korea dropped by 22.1 percent to $2.53 billion last year from $3.24 billion year-on-year. Imports from Korea, meanwhile, amounted to $6.68 billion last year, which is 21.2 percent lower than $8.48 billion in 2019.

Should the Phl-korea FTA deal be signed, it will be the country’s second bilateral trade agreement following the Philippines-japan Economic Partnership Agreement (Pjepa).

Pjepa, which entered into force in 2008, is under a general review this year.