After SoKor, other countries eyed for free trade deal
Malaya Business Insight - 11 September 2023
After SoKor, other countries eyed for free trade deal
By Irma Isip
Following the signing last week of the free trade agreement (FTA) with South Korea, the Philippines is readying similar deals with other countries such as the United Arab Emirates (UAE) and the European Union (EU) and through Asean with Canada.
Allan Gepty, assistant secretary of the Department of Trade and Industry (DTI) said the Philippines as part of Asean also anticipates the upgrades of existing FTAs, such as the one within the region itself and deals with Australia and New Zealand (ANZ), with Korea and with China.
In a press conference over the weekend, Gepty said the terms of reference for the Philippines-UAE FTA are expected to be completed within the year.
Gepty said the comprehensive partnership agreement will cover services, investments, digital trade among others .
Other areas being pushed include the formation of Joint Economic Commission and cooperation on customs.
Gepty said the Philippines and the EU has just finished the first session of its scoping exercise which will determine the elements to be covered if they so decide to pursue the FTA. This exercise is targeted to be finished within the year.
Negotiations for the Asean-Canada are targeted to be finished by 2025.
As Asean, negotiations are ongoing for the upgrade of FTAs with China and with Korea.
Gepty said the upgrades are being undertaken despite the existence of the Regional Comprehensive Economic Partnership (RCEP) where Asean and its trading partners are members.
Gepty said the upgrades are meant to tackle the corresponding offensive interests pushed by parties.
“Usually the interests including sensitives vary. In RCEP, while it is comprehensive partnership, there were some concessions that not given compared with existing FTAs,” Gepty said.
He cited the case of the Asean-China FTA where negotiations call for a more enhanced electronic commerce to cover more rules given the evolving business models such as online platforms.
He said within Asean, while trade in goods has achieved 99 percent liberalization, there are rules that need to be adjusted and enhanced.
Last September 7, DTI Secretary Alfredo Pascual and Korean Trade Minister Ahn Duk Geun signed the Philippines-Korea in the presence of President Marcos and President Yoon on the occasion of the 24th Asean-Korea Summit in Jakarta, Indonesia.
While the FTA is predominantly market access agreement, it also covers chapters competition, economic and technical cooperation from which more investments from Korean companies are expected.
Economic cooperation covers vaccines, climate change and culture among others, based on the plan to advance mutually cooperative discussions through many different forms of collaboration in promising strategic areas, such as healthcare, rare metals processing, innovation ecosystem, culture, movies, e-commerce and intellectual property.
With the FTA, Korea opens up 94.8 percent of its items to the Philippines free of tariffs, while 96.5 percent of Filipino items open to Korea tariff-free, resulting in a considerably high level of open trade.
Philippines gained access and removed its tariff disadvantage on bananas and canned pineapples while Korea stands to benefit from removal of tariffs for Korean automobiles, and the car parts.
