The Department of Trade and Industry (DTI) has expressed optimism that the free trade agreement (FTA) between the Philippines and South Korea will rejuvenate the Philippines' banana export sector. This sector has seen a decline in its market share in South Korea, facing stiff competition from Vietnam and Latin American countries.
DTI Undersecretary Allan Gepty highlighted that the market share for fresh bananas from the Philippines in South Korea has fallen to 65 percent in 2023, down from 98 percent in 2013. The competitive edge provided by South Korea's FTAs with other banana-exporting nations such as Vietnam, Ecuador, Colombia, and Peru has placed the Philippines at a disadvantage. Currently, Vietnamese bananas enter South Korea tariff-free, contrasting with a 30 percent duty imposed on Philippine bananas.
Gepty underscored the benefits of the FTA between Manila and Seoul, which, upon the Senate's concurrence, will enable Philippine banana exports to enter South Korea with zero tariffs five years post-implementation. He encouraged stakeholders to leverage these FTAs to access global markets within a stable and predictable business environment. The FTA, signed on September 7, 2023, is the Philippines' third bilateral trade agreement, following those with Japan and the European Free Trade Association. The Korean government is yet to ratify the agreement, with the ratification bill currently under consideration by the National Assembly.
FTAs typically offer member countries improved market access by reducing or eliminating trade duties, contrasting with the most-favored-nation (MFN) treatment that applies without specific trade agreements.
Source: PNA