The Korean Embassy has announced that the Philippine-Korea Free Trade Agreement (FTA) is set to take effect on 31 December 2024, a day earlier than the Philippine Trade Department’s statement that the deal would be in full force on 1 January 2025.

"With a comprehensive scope covering 97 percent of imports, the FTA will significantly enhance market access for Philippine products like bananas and pineapples in the Korean market," the Korean embassy said in a statement on Monday.

During a roundtable discussion with trade reporters last week, Trade Secretary Cristina Roque noted that the Philippines-Korea FTA would take effect on 1 January 2025.

“Starting 1 January, the Philippines-Korea FTA will take effect. From 30 percent, our bananas will go to zero tariff in 5 years. Every year, it will go down 6 percent. Tariffs for bananas will go down already, that is something we are (really) looking forward to because our export of bananas is huge,” Roque said.

Earlier, the Trade Department stated that bananas are currently the country’s top agricultural export to South Korea, with a tariff rate of 30 percent. In contrast, bananas from Vietnam and Indonesia already enjoy a 0 percent tariff rate.

The Philippines’ market share of bananas in South Korea was at 98.80 percent in 2013 but significantly declined to 69 percent in 2023. Meanwhile, Vietnam’s share rose from 0.04 percent in 2013 to 12 percent in 2023.

The bilateral FTA with South Korea is expected to boost Philippine market access for tropical fruits, especially bananas and processed pineapples. Under the FTA, exports of key Philippine products to South Korea, including fresh bananas, will enjoy zero tariffs within five years.

Other agricultural products from the Philippines gaining preferential market access to Korea through the FTA include yellowfin tuna, processed pineapple, pineapple juice, prepared or preserved oysters, fresh blue crabs, fresh guavas, fresh papayas, canned sardines, and fresh tilapia.

Beyond agricultural trade, the agreement is expected to foster economic cooperation to attract investments in sectors such as critical minerals processing, electric vehicles, and parts manufacturing.

For industrial products, Philippine menswear and other apparel goods such as trousers, shirts, jackets, and blazers will also gain preferential market access to Korea.

An implementing agreement has been signed by both parties to enhance collaboration on priority sectors for trade and investment under Economic and Technical Cooperation. Both nations will begin consultations within six months after the agreement takes effect to identify projects for cooperation.

Priority sectors include electric vehicles, health cooperation, vaccine manufacturing, critical minerals processing, innovation, research and development, creative and cultural industries, and e-commerce. Cooperation in these areas may involve information exchange, sharing of best practices, technical assistance, joint research and development, and the transfer of technology or new business models.

The Philippines-South Korea FTA marks the country’s third bilateral FTA. Currently, the Philippines has two bilateral FTAs in force: the Philippines-Japan Economic Partnership Agreement and the Philippines-European Free Trade Association FTA.