Representatives from South Korea and the Philippines have confirmed that the two nations will aim to conclude negotiations for a free trade agreement (FTA) in the early part of next year.

It had been thought that a deal could be signed at the ASEAN-Republic of Korea Commemorative Summit this week, but that process was delayed and ultimately did not come to fruition.

However, South Korean trade minister Yoo Myung-hee and Ramon Lopez from the Philippines released a joint statement furthering the agreement process and outlining what has been referred to as an 'early achievement package' ahead of a complete PH-KR FTA (Philippines-Korea Free Trade Agreement) in the first half of 2020.

Some of the forthcoming details of the deal have also come to light, with the Philippines having agreed to lift trade barriers on car parts, pharmaceutical products and petrochemicals, Yonhap news agency reports.

For its part, South Korea has said it will open the market for bananas and clothes coming from the Philippines, in particular.

The Department of Trade and Industry ministers stressed that the early achievement package will be developed further going into next year and eventually incorporated into the FTA.

"In keeping with the principle of single undertaking, this package will be improved through consideration of additional tariff lines and/or other mechanisms that will further facilitate trade and investments and will be incorporated when finalising the PH-KR FTA," Lopez and Yoo commented.

Negotiations for the PH-KR FTA began in earnest in June 2019 as a way of boosting economic relations between the two countries and building upon multilateral and regional agreements already in place.

By removing trade barriers and creating business opportunities, both nations should benefit from increased investment and trade.

For the Philippines especially, bananas have played an important part in negotiations because the country wanted to see the playing field levelled in terms of local competition.

Currently, the Philippines has a tariff rate of 30 per cent on its banana exports to South Korea, yet other nations enjoy rates of far less. Vietnam, for instance, will have zero tariffs by 2024.

Removing these barriers in a similar way should mean producers can boost their exports without having to pay any further levies.

South Korea is the Philippines' fourth-largest major trading partner and was its eighth export market in 2018. 

However, this new FTA will also be in South Korea's favour, as the country has been keen in recent months to pursue deals with individual nations of the ASEAN with which it is already affiliated.

The country already has agreements in place with Indonesia, Vietnam and Singapore and is in the middle of negotiations with Cambodia and Malaysia.

Its ultimate goal is to reduce its reliance on the United States and China, as well as to establish relationships away from Japan due to an ongoing trade war there.

The news coincides with celebrations to mark 70 years of diplomatic relations between the Philippines and South Korea, with the former having been only the fifth state to recognise the Republic of Korea upon its creation.