Philippines-South Korea trade pact a win for the banana sector

The Philippines and South Korea will reduce tariff rates on banana exports and processed pineapple goods under a new free trade agreement (FTA) set to take effect on December 31. The FTA will also provide duty-free entry for 11,164 tariff lines, accounting for 87.4% of Philippine exports to South Korea, and is projected to attract foreign direct investments worth ₱150 billion to ₱200 billion in the first three years. The FTA was ratified by the Philippine Senate and the South Korean parliament in September and October, respectively.

The tariff rates for the country’s banana exports to South Korea will get a sizable reduction next week under the newly implemented free trade agreement (FTA), beginning with a 6 percent decrease on Dec 31 and another 6 percent cut on January 1. “One of the major beneficiaries of the FTA is the banana industry as tariff rate for bananas will be reduced to zero in 5 years,” trade undersecretary Allan Gepty told reporters on Monday. The country’s bananas are among the more than P170 million worth of locally produced agricultural goods covered under the Philippines-South Korea FTA, which will take effect on Dec. 31 A 30 percent import tariff is currently levied by South Korea to bananas shipped from the Philippines, taxes that will be reduced to zero within the fifth year of effectivity of the trade deal. Philippine exports of processed pineapple– goods which are currently subjected to a 36 percent import tariff- will see the same gradual reduction Gepty added that a total of 11,164 ...