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The Korea-Philippines Free Trade Agreement (FTA) has been officially signed, more than a year and 10 months after it was announced. Upon parliamentary ratification and implementation in the first half of next year, tariffs on South Korean products such as automobiles and processed foods like ginseng beverages and coffee mixes are expected to be gradually eliminated, boosting exports. On the other hand, imports of Philippine bananas are expected to increase, leading to competition in the domestic market with bananas from other foreign countries like Vietnam and Peru.
The Ministry of Trade, Industry, and Energy announced the signing of the “Korea-Philippines FTA” on the 7th in Jakarta, Indonesia, where the ASEAN Summit is to be held, with Ahn Duk-geun, Minister for Trade, and Alfredo Espinoza Pascual, Minister of Trade and Industry of the Philippines.
With this latest signing, Korea has now signed 22 FTAs with 59 countries around the world.
An official from the Ministry of Industry, Trade, and Energy explained, “In the Philippine automotive market, Japanese brands currently hold an 82.5 percent market share. With the Korea-Philippines FTA taking effect, the 5 percent tariff on domestically produced cars will be eliminated immediately.”
As for bananas, which the Philippines hopes to increase exports to South Korea, the 30 percent tariff rate will be gradually reduced by 6 percentage points each year for five years, starting immediately upon the agreement’s entry into force. However, to prevent a sudden surge in domestic imports, a safeguard measure will be in place for ten years, reimposing the 30 percent tariff if imports exceed certain thresholds.
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