Phl, South Korea expand cooperation and strengthen trade in priority sectors

The Philippines and South Korea agreed to further develop cooperation on supply chains and energy and expand trade and investment during the second meeting of the Joint Commission on Trade and Economic Cooperation held in Seoul on 18 October 2022.

Department of Trade and Industry Undersecretary and Board of Investments Managing Head Ceferino Rodolfo affirmed the vital role of the JCTEC in boosting the relationship between the Philippines and Korea.

"From our inaugural meeting in 2019, significant strides have been taken to deepen our trade and investment relations and our longstanding partnership. We now have a free trade agreement on the horizon, which is yet another testament to our shared vision of achieving mutually beneficial outcomes for our countries," he said.

Further citing the Philippines as a valuable trade and strategic partner of South Korea, Deputy Minister Dae-jin Jeong of the Ministry of Trade, Industry and Energy underscored the JCTEC as a platform to review and discuss ongoing trade concerns and areas of interest for bilateral partnership. "The Philippines is the first country in ASEAN to establish diplomatic relations with Korea, and through the JCTEC, we hope to strengthen cooperation and expand trade and investment ties," he said.

On supply chains, both sides agreed to maximize areas for complementation in green metals and related industries such as electronic vehicles and semiconductors, focusing on building stable and sustainable supply chains for critical raw materials for production and manufacturing.

"We are positioning the Philippines as a key player in the supply of critical minerals given our vast resources of green metals such as nickel, cobalt, and copper — inputs for the production and manufacture of electronic goods and batteries for electric vehicles. With Korea's manufacturing capabilities especially in electronics, we hope to pursue a meaningful partnership in this area," said Rodolfo.

Echoing the Philippines' interest, Jeong enjoined both countries to work together to pursue the endeavor: "We will engage in technical discussions to pursue our strategic partnership through the proposed Memorandum of Understanding on core raw materials and critical supply chains cooperation. The Philippines ranks 10th worldwide in terms of mineral production and is especially rich in nickel, chromium, and copper."

Meanwhile, on energy cooperation, aligned with the need to respond to climate change challenges amid ongoing global initiatives toward carbon neutrality, both sides committed to establish a cooperation-based mechanism on renewable energy, energy efficiency, and nuclear power.

On the expansion of trade and investment, the two nations acknowledged the continuing efforts of both sides to enhance market access of key products, including the signing of the Philippines-Korea Free Trade Agreement targeted in 2023. Activities to promote the utilization of the FTA through seminars and information sessions were also discussed. Further, in support of industrial initiatives, they agreed to maintain active engagement on ongoing Official Development Assistance projects and to explore other areas for complementation such as collaborations related to the Philippines' PUV modernization program.

The meeting also highlighted the importance of regional mechanisms in building toward mutual economic gains, among which is the Indo-Pacific Economic Framework for Prosperity. In September 2022, the Philippines and South Korea joined other IPEF partners in endorsing the statements of the four pillars on Trade, Supply Chains, Clean Economy, and Fair Economy.

The second meeting of the Joint Commission on Trade and Economic Cooperation was co-chaired by Rodolfo and Jeong.

First established in 2013, the JCTEC serves as the primary mechanism of both countries to pursue economic cooperation and trade and investment initiatives. The inaugural meeting of the JCTEC was held in June 2019 in Seoul, South Korea.

The Philippines views the JCTEC as a platform to better identify opportunities and coordinate and streamline activities of shared interest leading to targeted benefits and productive outcomes especially in trade and investments. Once the FTA is in place, the Philippines envisions that the comprehensive scope of its ECOTECH chapter will ensure that both sides will continue to benefit from complementation in priority sectors and areas, especially in manufacturing and infrastructure.

South Korea is the Philippines' fifth largest trading partner, eighth largest export market, and third largest import supplier in 2021. In the same year, South Korea ranked sixth in terms of approved investments, with notable investment activities in construction, real estate, manufacturing, and accommodation and food service. ¨