./.WORLD TRADE
ORGANIZATIONWT/GC/W/284
3 August 1999
(99-3274)
General Council Original:  English
PREPARATIONS FOR THE 1999 MINISTERIAL CONFERENCE
Market Access for Industrial Goods
Communication from Korea
The following communication, dated 28 July 1999, has been received from the Permanent
Mission of Korea.
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Background
1. Under the auspices of the GATT/WTO system, tariffs in most countries, both developed and
developing, have been significantly reduced, while international trade has expanded to a great extent
as a consequence of the past eight rounds of multilateral trade negotiations.  However, high tariff
rates, tariff peaks, and tariff escalation still exist in many countries, impeding market access and
slowing down the expansion of international trade.
2. Hence another round of trade liberalization could be the ideal forum to remedy this situation.
Fresh liberalization would help to thwart the rising protectionism fuelled by the consequences of the
recent financial and economic turbulences as well as to maintain and accelerate the momentum forsustainable economic growth.
Proposal
3. With this background in mind, Korea believes that a number of issues pertaining to market
access should be dealt with in the new round.  The following paragraphs provide a brief, non-exhaustive summary of such elements.
4. In principle, tariff negotiations should cover all industrial items.  Certain items, however,
need special treatment and therefore separate ta lks.  Considering the sensitivity and non-trade
concerns of fishery and forestry products, it would be desirable that these areas be discussed
separately from the tariff negotiations on industrial products.
5. Setting the objectives of tariff reduction for the new round at similar levels to that of the
Tokyo Round or the Uruguay Round would be in order.  The scope of tariff bindings among the
Members should also be widened to enhance the predictability of tariff rate changes.
6. Members should tackle problems related to tariff  structure.  Tariff peaks that are maintained
by a number of countries should be substantially lowered.  Also, ways to avoid tariff escalation, asmuch as possible, should be therefore devised during negotiations on market access.  This isWT/GC/W/284
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warranted by the fact that real protection caused by tariff escalation can remain high despite low tariff
rates in absolute terms.
7. Regarding nuisance tariffs, the decision to abolish them should be at the discretion of each
Member.  When making this decision, Members should ponder factors such as consistency with their
overall tariff system, convenience in taxation and the share of nuisance tariff revenue out of totalcustoms revenue.  If nuisance tariffs are to be eliminated, Members may be reluctant to reduce general
tariffs since lowered tariffs may become nuisance tariffs, which then are subject to abolishment.  In
this sense, abolishing nuisance tariffs may not contribute to the overall tariff reduction of industrial
goods.
8. To effectively deal with the aforementioned elements associated with tariff levels and
structure, the formula cut approach seems appropriate in conducting the tariff negotiations.  An item-
by-item and sectoral approach are more likely to lead to an imbalance of interests among theMembers.  The formula cut should be designed to generate the following effects:
- lower high tariff rates and tariff peaks by all Members (especially for high tariff
products);
- general reduction of tariff rates for all products;- ease tariff escalation;- easy and simple to apply.
9. As for autonomous trade liberalization, Members should agree that credit be granted to
autonomous lowering of both bound and applied tariffs, as all trading partners benefit from both.
Such credit is important to provide Members with incentives not to intentionally postpone reductions
in tariff rates.  This sort of intentional postponement often unnecessarily delays much-needed trade
liberalization.
10. Another closely linked aspect to be considered  is the spread between the bound and applied
rates.  Because the spread is often the result of autonomous liberalization, it should not be necessarily
seen as a problematic issue.  As for the tariff negotiations in the new round, bound rates should
remain the basic rates, as in the Uruguay Round.
11. Non-tariff barriers (NTBs) should also be subject to new negotiations.  GATT 1994 and other
multilateral agreements on trade in goods incorporate various provisions focused on reducing NTBs.
However, non-transparent NTBs still exist in various  forms within the realm of international trade,
reducing the benefits of trade liberalization gained through tariff reductions.  As such, NTBs,
particularly if non-transparent, demand as much attention as tariffs in the new round.
12. In the event that complete and immediate elimination of NTBs is difficult to achieve due to
technical problems experienced by Members, it will be important to at least introduce regulatory
measures that will enhance transparency and predictability so as to minimize the negative effects ofNTBs.
13. Given the importance of market access for developing economies, especially LDCs,
negotiations on increased market access must imperatively address the need of developing countries.
Practical support measures are called for to improve these countries’ market access to major global
markets and facilitate their integration into the multilateral trading system.
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