RP-based Korean firms seek free trade deal
Inquirer | 07/30/2007
RP-based Korean firms seek free trade deal
FTA expected to boost investment flow
KOREAN investors want more liberal trade between South Korea and the Philippines through a regional free trade agreement with the Association of Southeast Asian Nations as a meeting among economic ministers in the region approaches.
In an interview, Jang Jae Jung, president of the Korean Chamber of Commerce in the Philippines, said there was no other option for Korea and the ASEAN countries but to enter into trade pacts.
"We must not be left behind in the general move toward FTAs and further trade liberalization among partners," Jang said.
Negotiations for an ASEAN-Korea FTA are underway, covering building blocks that include a framework agreement on a comprehensive economic cooperation; trade in goods (TIG) deal, and an agreement on a mechanism for dispute settlement.
Trade officials are set to resume talks in three weeks as the ASEAN economic ministers and their counterparts from East Asian partner countries meet in August.
According to Jang, such a pact would boost investment inflows from South Korea to the Philippines, which reached P54 billion in 2006, the largest from any country.
He said there were about 2,000 companies registered with the Securities and Exchange Commission that were owned by Koreans.
Also, there are 322 Korean companies whose projects are registered listed with the Philippine Economic Zone Authority.
"Korean companies that operate here employ about 150,000 Filipino workers and staff members, whose salaries add up to about P24 billion yearly," Jang said.
According to the Bureau of International Trade Relations, an AKFTA would boost Philippine export earnings by $500 million to $1 billion yearly.
BITR data show that based on current prices, bilateral trade between the two countries grew by only 0.75 percent from 2002, reaching $4.6 billion in 2006.
In the same period, exports to South Korea grew by 1.58 percent to $1.4 billion while imports grew 0.25 percent to $3.2 billion.
Still, the Philippines incurred trade deficits with Korea over the past four years, which amounted to between $1.66 billion and $1.81 billion
Top merchandise exports to South Korea include semiconductor devices and components; cathodes and parts of cathodes; parts and accessories of automated data processing machines; fresh bananas; oil cake and solid residues from copra.
