THE PILIPINO Banana Growers & Exporters Association, Inc. (PBGEA, Inc.) on Thursday pushed for Senate concurrence in a free trade agreement (FTA) with South Korea, which would remove tariffs on the fruit, to boost exports and to compensate for losses caused by the Panama disease dampening production.
“If we are not able to finalize this free trade agreement with (South) Korea, we are very afraid that we will lose the Korean market entirely,” PBGEA and Dole Philippines corporate and government affairs consultant Melquiades L. Hernandez III told a Senate foreign relations committee hearing looking into the FTA with South Korea.
The Philippines and South Korea signed the free trade deal in September last year as both countries sought to boost trade ties.
The deal will remove tariffs on about 94.8% of Philippine products, while the Philippines will remove tariffs on 96.5% of South Korean goods.
Tariffs on bananas, which are currently charged a 30% tariff, are set to go to zero over five years. Tariffs on processed pineapples, which are currently charged 36%, will be removed in seven years.
Mr. Hernandez said the Banana exporter group is working with the Department of Agriculture to come up with countermeasures to address the outbreak of Fusarium wilt, also known as the Panama disease.
Exports of banana from the Philippines rose by 3.4% to 2.3 million metric tons last year, according to the Food and Agriculture Organization (FAO). In its Banana Market Review, FAO linked this increase to the increased investment in containing the Panama disease and the rehabilitation of about 4,000 hectares of infected plantations.
The Philippine government is aiming to export more bananas, processed pineapples to South Korea once the trade deal is finalized.
For industrial goods, the FTA led to tariff elimination for 9,909 lines, of which 9,747 lines are set for tariff elimination upon entry into force.
“The Panama disease is a big issue for our industry, including the high cost of production because of efforts to address the diseases, and the availability of land,” Mr. Hernandez said.
The Department of Trade and Industry earlier said the Philippines is likely to ratify the FTA with South Korea by the middle of the year.
Under the Constitution, international agreements and treaties require a concurrence of two-thirds of the Senate’s members for ratification.
In December last year, then-Senate President Juan Miguel F. Zubiri told BusinessWorld in a Viber message that the deal would be ratified by January. The trade deal, however, has yet to reach the Senate plenary floor. — John Victor D. Ordoñez