South Korea and Philippines Set Deadline for Free Trade Agreement

South Korea's Trade Minister Yoo Myung-hee (fifth from the left) held a luncheon meeting with ambassadors from ASEAN countries in Seoul prior to the Busan summit.

South Korea and the Philippines have agreed to conclude free trade agreement (FTA) negotiations in the first half of 2020.

Both nations had indicated earlier in the year that they hoped to sign the agreement at this week's ASEAN-Republic of Korea Commemorative Summit held in Busan. South Korean Trade Minister Yoo Myung-hee and her counterpart Ramon Lopez did however signed a joint statement on Monday furthering the agreement process. According to Yonhap news agency, the Philippines has agreed to lift barriers for South Korean auto parts, pharmaceutical goods and petrochemical products. In return, South Korea has agreed to open the market for bananas and clothes.

South Korea already has a FTA with ASEAN but is seeking separate deals with its top five trading partners in Southeast Asia. South Korea agreed a free-trade deal with Indonesia in October, and at this week's summit, the two countries announced they will officially sign the deal in the first half of 2020.

South Korea is working to agree a free trade agreement with Cambodia. Trade between the two nations increased 14.7 percent last year. Cambodia's main exports to South Korea are garments, electronics, shoes, luggage, aluminum, beverages, medical supplies and natural rubber. Its imports from South Korea include trucks, bulldozers, cloths, mineral water, electronics and cosmetics.

South Korea is also working on a free trade agreement with Malaysia. It already has agreements with Vietnam and Singapore.

South Korea is heavily reliant on exports to the United States and China. This along with its trade war with Japan, has seen its economy suffer. The country's exports dropped 14.7 percent in October from a year earlier, adding another month to the slump it has experienced this year.

However, the South Korean economy is expected to grow 2.3 percent year-on-year in 2020, according to the Korea Institute for Industrial Economics & Trade, up from this year's estimated two percent growth.

In other regional trade developments, the world's largest trade agreement is expected to be signed in 2020. The Regional Comprehensive Economic Partnership (RCEP) will include all 10 ASEAN countries (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam) and five of its major trading partners: Australia, China, Japan, New Zealand and South Korea. (India declined to participate.)