The Korea Times
The Korea Times
The Korea Times
1
3
5
7
9
11
13
15
17
19
2
4
6
8
10
12
14
16
18
20
Close for 24 hours
The Korea Times
Sat, September 21, 2024 | 13:02
Korea signs free trade pact with Philippines
Posted : 2023-09-07 21:26
Updated : 2023-09-08 14:59
 |
| Korea's Trade Minister Ahn Duk-geun, front right, shakes hands with his Philippine counterpart, Alfredo Pascual, after signing the Korea-Philippines free trade agreement in Jakarta, Indonesia, Thursday (local time), with President Yoon Suk Yeol and Philippine President Bongbong Marcos in attendance. Yonhap |
Seoul to offer help with Jakarta's 2039 nuclear power project
By Nam Hyun-woo
JAKARTA ― Korea and the Philippines signed a free trade agreement, Thursday, marking the fifth bilateral free trade pact Seoul inked with a member of the Association of Southeast Asian Nations (ASEAN).
Following the pact, Korea and the Philippines will remove tariffs on approximately 95 percent of items traded between the two sides. In particular, duties on Korean cars and automotive parts will be lifted, opening up a lucrative market for Korean carmakers.
Korea's Minister for Trade Ahn Duk-geun and Philippines' Secretary of Trade and Industry Alfredo Pascual signed to the FTA at a summit between President Yoon Suk Yeol and his Filipino counterpart Bongbong Marcos in Jakarta.
The two countries reached agreements in their free trade negotiations in October of 2021, but had been fine tuning datelines for removing tariffs, rules on agricultural safeguards and other details until they declared the final conclusion of the talks in July of 2022.
Following the official signing, the pact will undergo a ratification process at the Korean National Assembly, and the government anticipates that the FTA will take effect in the first half of next year.
The new pact is the third FTA that involves Korea and the Philippines. The two countries have been lowering their trade barriers through the Korea-ASEAN FTA and the Regional Comprehensive Economic Partnership (RCEP).
"When the bilateral free trade agreement goes into effect, the Philippines will lift tariffs on 96.5 percent of all traded items and Korea will remove 94.8 percent," senior presidential secretary for economic affairs Choi Sang-mok said.
The FTA is anticipated to be the most beneficial to Korean carmakers. The five-percent tariff currently applied to Korean-made automobiles will be exempt immediately after the agreement takes effect, while up to a 30-percent tariff on automobile parts will be removed within a maximum period of five years. Tariffs on eco-friendly vehicles will be abolished within five years.
"This is expected to significantly enhance the export competitiveness of Korean automobiles in the Philippines, a market that Japan has traditionally dominated," Choi said.
The Philippines is the top car importer among ASEAN members, with Japanese brands accounting for 82.5 percent of the country's market as of 2022, followed by the United States at 7 percent, China at 6.4 percent and Korea at 2.5 percent.
The Philippines will see a boost in banana exports to Korea, which currently face a 30-percent tariff. The new pact will remove the tariff within five years, but the Korean industry ministry said it will employ a safeguard measure of reinstating the duty if the volume of banana imports exceeds the yearly cap for 10 years.
Korea already signed bilateral free trade pact with ASEAN members Singapore, Vietnam, Cambodia and Indonesia.
Groundwork for nuclear power plant in Indonesia
Meanwhile, Yoon attended a Korea-Indonesia business roundtable in Jakarta, where businesses and other institutions of the two countries signed 16 memoranda of understanding (MOUs).
Korea Nuclear Association and its Indonesian counterpart signed an MOU on information exchanges on small modular reactors (SMRs) and other nuclear reactors.
Indonesia is seeking to build its first commercial nuclear power plant by 2039 as part of its carbon neutrality initiative, and SMRs are emerging as a viable option.
SMRs have a power capacity of up to 300 megawatts per unit, which is about one third of the generating capacity of traditional nuclear power reactors, and can be installed in locations not suitable for large nuclear power plants. Due to this, SMRs are viewed as a potential option for Indonesia and other emerging countries which are prone to earthquakes.
In March, Indonesia and the U.S. announced a strategic partnership where NuScale Power assists in Indonesia acquiring an SMR for the proposed nuclear plant in West Kalimantan. This is anticipated to create synergy with Korea, because Doosan Enerbility manufactures core parts for NuScale Power's SMRs.
Korean shipbuilder Daewoo Shipbuilding and Marine Engineering is also participating in Thorcon Power Indonesia's floating SMR project.
"Because Korea and Indonesia are pursuing bold initiatives for carbon neutrality, I expect cooperation between the two countries to burgeon in the field of nuclear power, including the SMR industry," Yoon said.
namhw@koreatimes.co.kr 
More articles by this reporter
