BANANA growers are pushing the government to help bring down high tariffs imposed by South Korea on their produce as rival banana producers erode the industry’s share of its third most-important market.
“The negotiations only started in the second quarter while the tariff rates for our competitors have been getting more and more favorable,” Philippine Banana Growers and Exporters Association (PBGEA) Executive Director Stephen A. Antig said in a statement.
President Rodrigo R. Duterte is currently in South Korea to attend the commemorative summit of the Association of Southeast Asian Nations (ASEAN) with South Korea. He will also have a bilateral meeting with South Korean President Moon Jae-in.
PBGEA hopes Mr. Duterte will bring up the issue, as well as concerns on the proposed free trade agreement (FTA) between the two countries. Banana tariffs were first brought up during his state visit in April, while the initial discussions on the FTA were held June.
The high tariff is threatening to reduce the country’s market share in South Korea, which has trade deals with Central American banana producers, granting them lower tariffs which took effect in October. Producers benefiting from he arangement include Costa Rica, El Salvador, Honduras, Nicaragua and Panama.
“Central American bananas have been slowly eroding the market share of the Philippines. If this continues, the Philippines will not be able to compete,” PBGEA President Victor S. Mercado, Jr. said.
South Korea is one of the Philippines’ top markets for banana next to China and Japan. According to the Philippine Statistics Authority (PSA), banana exports in the eight months to August grew 46.6% to $1.258 billion. Japan was the largest market from 1991 to 2017, until China took over in 2018. PBGEA said Philippine banana shipments to South Korea hit 420,344 MT in 2018.
In October, Trade Secretary Ramon M. Lopez said that FTA negotiations with South Korea are currently stalled because the two parties have yet to agree on banana tariffs, which are currently at 30%.
In exchange for lower tariffs, South Korea is seeking lower tariff on its auto and parts products. The Trade department also hopes to expand the exports of the country’s pineapple, and mango through the FTA. It hoped to wrap up negotiations this month. — Vincent Mariel P. Galang