The Philippines is optimistic about rejuvenating its banana export sector with the recent free trade agreement established with South Korea. The Department of Trade and Industry has highlighted the potential of this agreement to address the declining market share of Philippine bananas in South Korea, where they face stiff competition from Vietnam and other Latin American countries.
Department of Trade and Industry Undersecretary Allan Gepty noted that the market share of fresh bananas from the Philippines in South Korea has dropped significantly from 98% in 2013 to just 65% in 2023. This decline has been attributed to the competitive advantage granted to bananas from countries like Vietnam, Ecuador, Colombia, and Peru, which have free trade agreements with South Korea allowing them to export their products tariff-free. In contrast, Philippine bananas currently face a 30% duty when entering the South Korean market.
The free trade agreement, signed on September 7, 2023, aims to eliminate tariffs on Philippine bananas entering South Korea five years after implementation, pending the Senate’s concurrence and ratification by the Korean government. Gepty urged stakeholders to leverage the benefits of this agreement to enhance access to global markets in a stable and predictable business environment.
This agreement marks the Philippines’ third bilateral trade deal, following similar agreements with Japan and the European Free Trade Association. The Department of Trade and Industry is hopeful that the ratification of this free trade agreement will provide a significant boost to the Philippine banana export sector and restore its competitiveness in the South Korean market.
As the two nations work towards finalizing this partnership, the free trade agreement is expected to pave the way for increased trade opportunities and economic growth.
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