{"id":2202482,"date":"2023-10-12T17:32:56","date_gmt":"2023-10-12T08:32:56","guid":{"rendered":"https:\/\/koreapro.org\/?p=2202482"},"modified":"2023-10-13T17:16:03","modified_gmt":"2023-10-13T08:16:03","slug":"fta-signing-south-korea-and-philippines-at-a-crossroads","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2023\/10\/fta-signing-south-korea-and-philippines-at-a-crossroads\/","title":{"rendered":"FTA signing: South Korea and Philippines at a crossroads"},"content":{"rendered":"
The <\/span>free trade agreement<\/span><\/a> (FTA) between South Korea and the Philippines, signed at the recent ASEAN summit, represents a notable economic and diplomatic development for both countries. However, it also introduces complex challenges, especially concerning its enactment and broader implications.<\/span><\/p>\n One primary challenge is the political complexity surrounding the FTA\u2019s ratification process in the Philippines. Further, the FTA encompasses more than economic interests, highlighting diplomatic aspects such as knowledge exchange and potential collaboration in sensitive areas like nuclear energy.<\/span><\/p>\n The FTA holds particular significance for the Philippines, as it is only its <\/span>second such bilateral agreement<\/span><\/a> since the 2008 Economic Partnership Agreement with Japan. The signing event on Sept. 7, involving South Korea\u2019s Trade Minister Ahn Duk-geun and the Philippines\u2019 Alfredo Pascual, underscores the countries\u2019 dedication to strengthening bilateral relations.<\/span><\/p>\n Following the signing, the next crucial step is the agreement\u2019s ratification by both parties. Seoul anticipates its parliament will ratify the agreement in time for a <\/span>2024 implementation<\/span><\/a>, while Manila maintains a cautious approach.<\/span><\/p>\n The Philippine government is awaiting clarification from its Department of Foreign Affairs on whether the agreement is classified as a treaty, necessitating Senate approval, or as an executive agreement, requiring only Philippine President Ferdinand Marcos Jr.\u2019s ratification. The latter scenario could fast-track the FTA\u2019s effect, potentially to <\/span>Jan. 2024<\/span><\/a>.<\/span><\/p>\n DEEPENING ECONOMIC TIES<\/b><\/p>\n Presenting an evolved economic landscape, Choi Sang-mok, South Korea\u2019s senior presidential secretary for economic affairs, <\/span>announced<\/span><\/a> that under this FTA, the Philippines would abolish tariffs on 96.5% of goods, while South Korea would adopt corresponding measures by dismantling 94.8% of its tariffs when the agreement goes into effect.\u00a0<\/span><\/p>\n Meanwhile, Philippine Trade Assistant Secretary Allan Gepty <\/span>revealed<\/span><\/a> that the FTA would grant the Philippines nearly 98% preferential access to the South Korean market. This figure represents a substantial increase from the 96.4% access under the Regional Comprehensive Economic Partnership and the 88% from the ASEAN-Korea Free Trade Agreement.<\/span><\/p>\n The FTA\u2019s enactment will immediately benefit South Korea\u2019s automotive industry. It stipulates the immediate abolition of the Philippines\u2019 5% tariff on South Korean car imports. Additionally, it charts a five-year path to eliminate the 30% tariff on automobile parts and a similar timeline for eco-friendly vehicles.<\/span><\/p>\n The elimination of these tariffs is poised to bolster the competitiveness of South Korean cars in the Philippines, a market where Japanese automakers have traditionally dominated. The agreement also positions the Philippines as a pivotal hub for Korean automakers eyeing <\/span>expansion in the ASEAN region<\/span><\/a>, especially in the electric vehicle sector.<\/span><\/p>\n