The International Trade Council is pleased to report on the signing of a significant Free Trade Agreement (FTA) between the Philippines and South Korea. This momentous occasion took place during the 43rd Association of Southeast Asian Nations (ASEAN) Summit in Jakarta, Indonesia, and is poised to strengthen economic ties and promote increased cooperation between the two nations.
The Philippines and South Korea have a rich history of diplomatic relations dating back to the 1960s, which has been further solidified over the years through cultural exchanges, thriving tourism, and robust economic collaboration. South Korea has consistently ranked as one of the Philippines' top trading partners and a significant source of foreign direct investment. While prior agreements have existed, this newly formalized trade deal is the most comprehensive to date.
Key provisions of the FTA include substantial tariff concessions from both countries. South Korea will eliminate tariffs on approximately 94.8 percent of Philippine products, reciprocated by the Philippines abolishing tariffs on about 96.5 percent of South Korean products.
The FTA covers a wide range of provisions, encompassing areas such as trade in goods, trade remedies, rules of origin, customs procedures, trade facilitation, economic and technical cooperation, competition, and legal and institutional matters.
In this FTA, the Philippines places a strong focus on enhancing market access for key products, including bananas, processed pineapples, various fruits, industrial goods, and various services. For South Korea, a significant win is the elimination of tariffs on many automotive units and components, opening up opportunities for the South Korean auto industry in the Philippines.
In addition to tariff reductions, the FTA includes provisions for capacity building and technical cooperation between South Korea and the Philippines, spanning various industries. Furthermore, there is an emphasis on increased collaboration in addressing public health emergencies.
The private sector in both the Philippines and South Korea is expected to benefit significantly from this FTA. Industries such as automotive, agriculture, information technology, electronics, services, smart farms, and electric vehicles are poised for growth and increased collaboration.
In conclusion, the Philippines-South Korea FTA represents a significant milestone in bilateral relations, fostering economic growth and increased cooperation. Beyond economic advantages, this agreement signifies a shared commitment to common values and aspirations in frontier technology and the green economy.