Negotiations between the two countries have been on a stalemate as Korea insists on greater market access for its automotive exports to the Philippines in exchange for lower if not zero tariffs for Philippine bananas.

The country’s top banana growers and exporters called on both South Korean and Philippine governments to immediately resolve the standoff on the proposed tariff rate cut on banana shipments.

The Pilipino Banana Growers and Exporters Association Inc. (PBGEA) over the weekend said the governments of Manila and Seoul need to work on the speedy end to the issue of “very high import tariffs imposed on Philippine bananas.”

PBGEA executive director Stephen Antig said the negotiations have only started in the second quarter but other banana producers have been getting more favorable tariff rates.

Negotiations between the two countries have been on a stalemate as Korea insists on greater market access for its automotive exports to the Philippines in exchange for lower if not zero tariffs for Philippine bananas.

For its part, the Department of Trade and Industry tabled its demand to lower tariffs on agriculture exports.

Trade Secretary Lopez said South Korean trade officials were amenable as long as the Philippines cuts import duties on industrial products, especially automotive parts.

Meanwhile, President Rodrigo Roa Duterte is scheduled to meet with his South Korean counterpart President Moon Jae-In today at a side event to the two-day 30th ASEAN-Republic of Korea Commemorative Summit dialogue partnership.

PBGEA said they hope Duterte will raise anew the issue on banana import tariffs with Moon during the bilateral talks, along with other concerns on the proposed free trade agreement (FTA) between the two countries.

To recall, the Philippine president first brought up the issue of banana imports during his state visit in April 2018.

The initial round of talks on the bilateral FTA was held in June this year to improve the trade and investment activities between the two economies.

The Philippines hopes the FTA will translate to improved market access for its agricultural products such as banana, pineapple, okra, avocado, poultry products, and mango — in exchange for Korea’s industrial goods.

Banana shipments to South Korean markets are taxed 30 percent and the country’s negotiators want this reduced to at least 5 percent if not zero.

Thus, negotiators are looking at different tariff rate proposals aimed at erasing or at least narrow the trade deficit between the Philippines and South Korea.

They were initially looking at a possible conclusion of the talks this month (November). This may not proceed as planned because of so-called “gaps” in the mutual concessions between the parties.

South Korea is the country’s third most important banana market, next to China and Japan. Despite the high import tariff, banana shipments to this East Asian country reached 420,344 metric tons (valued at $203.69 million) in 2018, from 379,144 MT ($176.55 million).

However, Philippine banana growers are worried that their share in the South Korean market may be reduced, as Central American economies secured trade deals with Seoul that reduced, if not eliminated, the tariff on their bananas.