(Bloomberg) -- The Philippines wants top market Japan to cut tariffs on its banana exports as Manila pushes for deeper economic ties with Tokyo and Washington that include potentially joining a trilateral pact on critical minerals.

The Southeast Asian nation must be “economically strong” to be an effective strategic partner, Trade Secretary Alfredo Pascual said in an interview on Monday. “US and Japan recognize that. It’s not wise to have a lame duck as a partner.”

The Philippines is seeking a review of an existing free trade agreement with Japan that Manila hopes would lead to the reduction of the export tariffs on bananas, currently at 8% and 18%, depending on the season.

The push to cut tariffs comes as the Philippines, facing growing tensions with Beijing over their competing claims in the South China Sea, bolstered relations with the US and Japan during the first-ever trilateral summit by their leaders at the White House in April. 

“We want to be able to ship more to Japan and to make sure that we have the alternative in case there are problems with the other countries we’re selling bananas to,” Pascual said.

The trade chief did not mention China, the second-largest market for Philippine bananas. Beijing tightened quarantine rules on some Philippine banana shipments in 2012 around the same time that the two countries were feuding over a disputed shoal in the South China Sea. The curbs were lifted in 2016, when then new President Rodrigo Duterte forged warmer ties with Beijing.

Flare Up

Tensions between the Philippines and China have flared up anew over the past year, as President Ferdinand Marcos Jr. pushed back against Beijing’s expansive maritime claims in the South China Sea. While trade relations with China remain business as usual, Manila has been expanding economic ties with other countries in preparation for any potential fallout with Beijing amid the sea spat.

“The important thing is to work on the diversification of our markets and our sources of supply,” Pascual said. “That’s our counter, you know, because right now China is our No. 1 trading partner.”

The Philippines is set to resume free trade talks with the EU and a similar agreement with the United Arab Emirates is progressing, Pascual said, adding that trade deals with Africa and Latin American countries are under study. The Philippines signed an FTA with South Korea last year.

The Philippines has held talks to be part of the critical minerals agreement between the US and Japan as it pushes for increased domestic processing of its abundant nickel supply mostly shipped as raw ore to China. 

“The agreement is important so that we can create the enabling conditions to encourage US companies and Japanese companies to invest in the Philippines,” Pascual said. Processed nickel ore from the Philippines may be shipped to Japan to produce batteries for electric vehicles, which may be used by US EV makers or energy storage firms, he said. 

“We have been talking to US companies that are in the business of producing electric vehicles or batteries,” he added. Pascual declined to name them because they’re listed.

Chian’s top EV maker BYD Co. has previously expressed interest to set up manufacturing operations in the Philippines, although that plan has yet to materialize, Pascual said. “They are also sensitive to what’s going on,” he said.

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