Republic ofKorea WT/TPR/S/19
Page 15
II. TRADE POLICY OBJECTIVES AND INITIATIVES
(1) General Policy Direction
1. Korea 'seconomic ascent over thepastthree decades, interrupted byepisodes ofimport
substitution policies, hasbeendriven byastrongly export-oriented manufacturing industry.1The
country 'sgrowing tradelinks, inturnimplying stronger reliance oninternational rulesandprinciples,
haveencouraged agradually more active rôleininternational policy forasuchastheGATT. (Korea
doesnotparticipate inanyregional preferential groupings.) Inlate1994, President KimYoung Sam
announced that"Segyehwa", generally translated asglobalization, would betheguiding principle of
hisadministration, leading Korea toplayamore vigorous rôleintheworld community interms of
bothitsrights andresponsibilities. Liberalization isregarded bythecurrent administration asthemain
vehicle forimplementing Segyehwa, asreflected inrecent initiatives regarding trade, foreign direct
investment, deregulation andcompetition policy (Chapter III).
2. Following inauguration inFebruary 1993, theKimGovernment adopted theFive-Year Plan
foraNewEconomy (1993-97), replacing aprevious 1992-96 plan. ThenewPlancallsforreduced
government control oftheeconomy, including theabolition ofunnecessary regulations andrestrictions,
increased transparency oftrade-related policies andalignment ofdomestic regulations withinternational
standards.2Specific reference ismade torefocusing farmpolicies fromoutput-expansion tostructural
adjustment andimproved competitiveness; fostering technical assistance programmes forsmall and
medium-sizedenterprises(SMEs);rationalizingindustriesundergoingstructuralchange;andenhancing
export performance bypromoting highvalue-added production.
3. Explaining theactual impact ofKorea 'ssuccessive economic plans, IlSakong (aformer Minister
ofFinance) hasemphasized thattheyare"more indicative thanimperative" andthattheplanning process
ismoreimportant thantheplanitself. According toIl,thisprocess hasbeensuccessful asaneducational
instrument, "articulating leadership commitment andgiving thegeneral guidelines andimplicit promises
ofsupport thatfacilitate private planning".3Korea intends toabandon itstradition offive-year planning
infavour ofalonger-term orientation; aNewLong-term Economic Planiscurrently being prepared
forthelate1990s.4
4. Many current government initiatives canbesummarized under theheadings of"deregulation",
liberalization" and"privatization", aimed atopening previously restricted areas tointernal and,more
cautiously, external competition (Table II.1). Ingeneral, Korea haspreferred anevolutive andgradual
approach overradical reform, withthegroundwork being done inspecially appointed committees.
1Foracritical assessment ofthedevelopment process, including itsoverfocus onexport orientation inselected
segments oftheeconomy, seeGATT (1992).
2ThePlanpromulgatedanaveragerealgrowthrateof7percent,3percentinflation,acurrent-account-surplus
after 1995 andapercapita GNP ofUS$14,000 by1998. Recent adjustments include inparticular the
acknowledgement thatcurrent-account-deficits arelikely topersist until 2000.
3IlSakong (1993).
4Mainelementsincludeacommitmenttoderegulationinordertoimproveprivateandpublicsectorproductivity,
stimulate competition andinnovation; theobjectives ofenhancing productivity inlagging sectors, inparticular
financial andother services, andpromoting innovation insmall andmedium-sized businesses; andthevision
ofaninformation society underpinned bymodern communications systems.WT/TPR/S/19
Page 16Trade Policy Review
These included, forexample, aCommittee fortheDeregulation oftheEconomic Administration Sector,
established in1993. Byend-1995, 1,753 ofthe1,970 measures recommended bytheCommittee had
beenimplemented, withschedules forimplementation established formostoftheremaining elements.
Table II.1
Government agenda fortrade-related economic reform
Timeframe
Area Short-term
(1997-2000)Medium-term
(2001-05)Long-term
Tariffs Implementation ofKorea 'sURconcessions.
Tariff elimination for28items (HS4-digit)
by1999.Review possibility ofrevising scheduled tariff
concessions.
Regularly updates ofKorea 'stariff database(immediate announcement ofchanges tothepublic).
Non-tariff measures Gradual reduction ofquota items.
Elimination ofsubsidies by1998.
Elimination oftheImport Diversification
Programme by1999.Complete elimination ofremaining quotas by2001.
Customs procedures Complete theelectronic datainterchange
system ofUN/EDIFACT standards forexport-
andimport-clearance.
Active participation intherevision ofthe
Kyoto Convention.Continuous improvements incustoms procedures
according toGuiding Principles (FACTS).
Rules oforigin (RO) Active participation intheWTO/WCO
harmonization work onrules oforigin.
Faithful implementation oftherelevant WTO
Agreement.
Publication ofguides.Implementation of
harmonized ROon
adoption bytheWTO.
Review oftheimplications
ofROontrade and
investment.Efforts toestablish an
international régime
relieving distortions in
trade andinvestment
caused bypreferential
RO,inclusion of
preferential rules intothe
WTO framework.
Standards and
conformity assessmentProgressive alignment ofstandards forcapital
goods withinternational standards.
Efforts toenter intomutual recognition
agreements onconformity assessment with
APEC members.
Expansion ofKorea 'sparticipation inISO,
IEC, Codex Alimentarius andother relevant
international organizations.Efforts toalign withinternational standards, where
appropriate, inregulated andvoluntary sectors.
Continued participation inbilateral ormultilateral
mutual recognition agreements, consultations in
APEC/SCSC andother specialized regional bodies.
Enhanced transparency ofstandards andconformity assessment regulations. Development oftechnical
infrastructures tofacilitate broad participation inmutual recognition arrangements.
Government
procurementAccelerated information onprocurement opportunities andcontact points
through databases andInternet services ontendering opportunities.
Further domestic reforms toharmonize withtheWTO/GPA régime.Information ontenders
viaAPEC Home Page.
International co-operation
toachieve comprehensive
liberalization of
government procurement.
Competition policy Measures tostrengthen enforcement oftheFairTrade Actandensure fairness, transparency, and
professionalism inpolicy implementation.
Plans tooffer atraining programme oninternational competition policies andensure appropriate
technical assistance.
Participation ininformation exchange anddiscussions withAPEC members oncompetition policies.
Table II.1(cont'd)Republic ofKorea WT/TPR/S/19
Page 17
Timeframe
Area Short-term
(1997-2000)Medium-term
(2001-05)Long-term
Intellectual Property
Rights (IPR)Protection ofbreeder 'srights under theSeed
Industry Lawfrom 1998.
Protection oftrade secrets regarding
experimental statistics under theAgrochemical
Management Lawfrom 1997.
Amendments oftheCopyright Lawin
response tonewtechnological developments
around 1998.
Accession totheUPOV Convention in1999.Up-dating ofIPRlegislation inresponse tointernational
trends andtechnical developments.
Continued provision ofadequate andeffective civil
administrative procedures andremedies.
Telecommunications
servicesNolimitations onthenumber ofservice
suppliers (except limitations required bythe
availability ofradio frequencies) from 1998.
Liberalization offoreign investment in
facility-based basic telecom carriers ofup
to33%.
(Korea Telecom: 20%).Freeresale ofvoice telephone services connected tothe
PSTN from January 2001.
Transportation services
Aviation Liberalization ofairfreight handling by
January 1997.
Liberalization (upto50%) offoreign
investment inscheduled andnon-scheduled
carriers by2000.
Maritime transport Abolition oftheDesignated Cargo System by
end-1998.
Energy Liberalization ofdomestic oilprices and
opening ofdistribution fornewentrants by
end-1997.
Freeentry intopetroleum refinery by1999.
Tourism Liberalization offoreign investment in
subdivided non-residential buildings by1998.
Investment Gradual liberalization of59business sectors
(between 1997 and2000).Efforts toliberalize investment régimes andencourage
foreign investment.
Mobility ofbusiness
personnelConsideration ofexpanded possibilities for
diplomatic andconsular missions toissue
visas.Examination ofexpanding
thescope forissuing
multiple visas toallAPEC
nationals.Consideration ofwhether
restrictions ontemporary
residence offoreign
business personnel canbe
relaxed.
Active participation inthework done attheWTO, especially inconsultations andnegotiations under the
GATS.
Dispute settlement Development ofanAPEC-specific mechanism supplementing theWTO procedures.
Adequate measures tomake laws, regulations, etc.publicly available.
URimplementation Faithful implementation ofWTO commitments.
Implementation within theagreed timetable of:
Foreign Capital Inducement Act;
TaxReduction andExemption Control Act; and
Shipping Industry Promotion Act.
Deregulation Enhance transparency ofregulatory régime toensure fairmarket-based competition.
Source: Government ofKorea.WT/TPR/S/19
Page 18Trade Policy Review
5. Specific emphasis hasbeenplaced ondeveloping amore balanced structure oftheeconomy
interms ofcompany size,andencouraging theformation ofnewbusinesses. Concerning SMEs, the
Government hasannounced theconversion ofallassistance tonon-actionable subsidies insupport of
technological development, andtheabolition oftaxsupport measures forequipment investment, which
differentiate between domestic andforeign products.
6. Thebasic institutional structure governing trade-related policy decisions isdescribed in
Annex II.1.
(2) Multilateral Policies
7. Korea, aGATT member since 1967, signed andratified theMarrakesh Declaration tobecome
afounding member oftheWTO from1January 1995. Previously asignatory totheTokyo Agreements
onTechnical Barriers toTrade, Subsidies andCountervailing Measures, Anti-Dumping, andCustoms
Valuation, Korea hasassumed itscommitments under theMultilateral Trade Agreements. Ithassigned
theWTO Agreement onGovernment Procurement andissettoapply itfrom January 1997. Korea
applies itsm.f.n. tariffs toalltrading partners, whether theyareWTO members ornot.
8. Korea 'sundertakings intheUruguay Round included tariff reductions, concessions inthe
agricultural sector, commitments overabroad range ofservices sectors, anditsaccession tothe
Agreement onGovernment Procurement. Korea 'srôleinthetariff negotiations didnot"stand out".5
Thefinalbound tariffs rateswillbehigher inmostcases thanthose currently applied (Chapter III(2)).
Overall, minimum access commitments forfarm products proved themost sensitive areas inthe
Uruguay Round. Under theWTO Agreements onAgriculture, Subsidies andCountervailing Measures,
andTrade-Related Aspects ofIntellectual Property Rights, Korea claimed developing-country status,
thusavailing itself oflonger implementation periods.6
9. Implementation oftheWTO Agreements involved therevision ofvarious lawsandregulations.
Table II.2provides anoverview ofthenotifications made inthecontext ofWTO Agreements. New
legislation includes the"ActRelating toContracts inwhich theStateisaParty", which entered into
effect inJuly1995, paving thewayforKorea 'saccession totheAgreement onGovernment
Procurement. While, according totheauthorities, WTO Agreements cannot necessarily bedirectly
invoked inKorea, theConstitution legally obliges theGovernment toconform therelevant domestic
lawstothese Agreements.7
5AccordingtoKimTahn-Yiel(1994).Mr.Tahn-YielisDirectoroftheGATT/WTODivisionintheEconomic
Planning Board. However, Korea istoeliminate duties onsome paper products, toys, steel, semiconductors
andpharmaceuticals from 1997 to2004.
6Incontrast,KoreahasmadenonotificationundertheWTOAgreemen tonTrade-RelatedInvestmentMeasures
(TRIMs) as,according totheGovernment, nosuch measures exist.
7Under Article 6(11)oftheKorean Constitution, however, aninternational treaty concluded andpromulgated
under theprocedures prescribed byconstitutional lawhasadirect effect onKorean judicial territory even in
theabsence ofdomestic implementation (WTO document G/ADP/W/74, 15November 1994).Republic ofKorea WT/TPR/S/19
Page 19
Table II.2
Principal notifications inthecontext ofimplementing WTO Agreements, July1996a
Agreement Action
General Agreement onTariffs and
Trade 1994
General Agreement onTrade in
ServicesSchedule ofConcessions onmarket access submitted on15April 1994
(ListLX).
Submission ofKorea 'sSchedule ofSpecific Commitments
(GATS documents GATS/SC/48, Suppl.1 andSuppl.1/Rev.1, 15April 1994,
28July1995 and4October 1995) andofArticle II(m.f.n.) exemptions
(GATS documents GATS/EL/48 andSuppl.1 of15April 1994 and28July1995).
Agreement onTrade-Related Aspects
ofIntellectual Property Rights (TRIPS)Articles 1.3and3.1: Notification thatKorea willnotapply thecriterion ofpublication for
theprotection oftheproducers ofphonograms asprovided forinArticle 5.3oftheRome
Convention; andthatKorea willprotect broadcasts onlyifthebroadcast wastransmitted
from another Contracting State asprovided forinArticle 6.2oftheRome Convention
(WTO document IP/N/2/KOR/1, 13October 1995).
Agreement onAgriculture Korea hasnotified theadministration oftariff quotas
(WTO document G/AG/N/KOR/1, 31May1995).
Notification concerning trigger prices inthecontext ofthespecial safeguard provision
(WTO documents G/AG/N/KOR/2, andAdd.1, 1June1995 and14December 1995).
Agreement onTextiles andClothing
Agreement onTrade-Related
Investment Measures (TRIMs)
Agreement onAnti-Dumping PracticesSubmission ofthelistofproducts tobeintegrated intoGATT 1994 onentry intoforce of
theWTO Agreement (WTO document G/TMB/N/46, 28April 1995). Korea reserves the
righttousetheprovisions ofArticle 6(transitional safeguard mechanism;
WTO document G/TMB/N/20, 6March 1995).
Korea 'sobservations onthenotifications byCanada, theEuropean Union andtheUnited
States pursuant toATC Article 2.1(WTO document G/TMB/N/120, 17August 1995).
Notification under ATC Article 3ofvoluntary export restraints (silktoJapan) andimport
restraints under Article XVIII.6 (silkfabrics, satin, etc.tobeliberalized in1997) (WTO
document G/TMB/N/68, 28April 1995).
Nonotification.
Notification oflawsandregulations under Article 18.5oftheAgreement, i.e.relevant
provisions oftheCustoms Actandsecondary legislation
(WTO document G/ADP/N/1/KOR/1, 5April 1995).
Agreement onCustoms Valuation Notification thatKorea intended torevise existing legislation andwould renotify
(WTO document G/VAL/N/1/KOR/1, 28September 1995).
Agreement onRules ofOrigin Notification ofnon-preferential rules oforigin under Article 5.1
(WTO document G/RO/N/1/Add.1, 22June1995).
Notification ofpreferential rules oforigin under Article 5
(WTO document G/RO/N/7, 12February 1996).
Agreement onSubsidies and
Countervailing MeasuresNotification oflawsandregulations under Article 32.6oftheAgreement, i.e.relevant
provisions oftheCustoms Actandsecondary legislation
(WTO document G/SCM/N/1/KOR/1, 4April 1995).
Notification ofsubsidies fortheyears 1992-94 intheareas ofagriculture, forestry,
fisheries, coalindustry, manufacturing andresearch anddevelopment
(WTO document G/SCM/N/3/KOR/Rev.1, 25April 1996).
Agreement onSafeguards Notification oflaws, regulations andprocedures, i.e.relevant portions oftheForeign
Trade ActandtheCustoms Act
(WTO document G/SG/N/1/KOR/1 and/2,6April and11October 1995).
Notification ofpre-existing Article XIXmeasures (WTO document G/SG/N/2/KOR,
27March 1995). Notification ofmeasures under Article 12.7
(WTO document G/SG/N/3/KOR, 28March 1995).
Notification oftimetable forphasing outvoluntary export restraints
(WTO document G/SG/N/5/KOR, 15August 1995).
Understanding ontheInterpretation of
Article XVII oftheGATT
Plurilateral Trade AgreementsNotification ofproducts traded byState-trading entities
(WTO document G/STR/N/1/KOR, 20November 1995).
Korea hassigned theAgreement onGovernment Procurement.
a Excluding regular oradhocnotifications ofmeasures taken under theindividual agreements.
Source: WTO Secretariat.WT/TPR/S/19
Page 20Trade Policy Review
10. Asaresult oftheUruguay Round, theleveloftariffbindings forindustrial products rosefrom
10to90percent, andbound industrial tariffs aretofallfrom 18toclose to8percentona
trade-weighted basis.8However, thedirect impact onKorea 'smanufactured imports maybelimited,
given thegenerally lower level ofapplied rates. Overall imports maybenefit somewhat from an
accelerated paceofstructural change andstrong income growth.9Tariffication inagriculture applies
to67products/product groupings. Korea 's"traditional" banonriceimports hasbeenpartially lifted,
withinitial imports ofabout 51,000 tonnes in1995 andanin-quota tariff rateof5percent. Korea 's
Schedule ofCommitments under theGATS covers 80services sectors.
11. Annex II.2summarizes Korea 'sinvolvement since January 1992 indisputes raised and
consultations heldunder GATT/WTO provisions.
12. Reflecting itslevelofeconomic andpolitical development, Korea isseeking membership in
theOrganization forEconomic Cooperation andDevelopment (OECD). Theauthorities 'intention
toliveuptoOECD standards andpractices mayhaveinspired recent reforms intheareasofinvestment
andfinance (relevant legislation includes theNewEconomy Plan, theForeign Exchange Reform Plan,
andtheFinancialLiberalizationandMarketOpeningPlan).ByJuly1996,Koreahadcompletedreviews
inallrelevant OECD Committees; theOECD Council isexpected totakeadecision byautumn 1996.
13. Korea currently participates invarious international agreements andconventions regulating
tradein,oraccess to,natural resources andrelated products. These include theGrain Trade Convection,
Constitution oftheInternational RiceCommission, Wheat Trade Convention, International Sugar
Agreement, International Tropical Timber Agreement, Charter oftheAsian Vegetable Research and
DevelopmentCentre,ConventiononFutureMultilateralCooperationintheNorthwestAtlanticFisheries,
Agreement oftheEstablishment oftheIndo-Pacific Fisheries Council, andInternational Convention
oftheRegulation ofWhaling.
(3) Regional andPreferential Arrangements
14. Korea participates inAsia-Pacific Economic Cooperation (APEC), launched in1989topromote
closer links among countries intheAsia-Pacific Rim.10APEC isexpected toprovide aforum for
members toexchange views, consult onconditions conducive totrade andinvestment, andenhance
economic co-operation through human resource development, industrial andtechnological research,
etc.Arguing forapolicy of"open regionalism", Korea views APEC 'srôleassupplementary toand
supportive ofthemultilateral trading system. Almost 70percentofKorea 'sexternal tradeand75per
centofoutward FDIiswithother APEC members.
15. InNovember 1994, APEC members agreed tocreate afree-trade areabytheyear2010 for
developed and2020 fordeveloping participants. Detailed national "Action Plans" inthiscontext are
tofocus ontradeliberalization, tradefacilitation (such asharmonization ofstandards), anddevelopment
co-operation. Intheareaofservices, forexample, Korea 'sAction Planaimstoexpand market access
8According toGATT (1994). Government estimates ofKorea 'snetincome gains resulting from theRound
areintheorder ofUS$28 billion (Economic Bulletin, January 1994).
9Thegreatest import increase isexpected foragricultural andlight industrial products.
10Themembers, besides Korea, areAustralia, Brunei Darussalam, Canada, Chile, China, Chinese Taipei,
Hong Kong, Indonesia, Japan, Malaysia, Mexico, NewZealand, Papua NewGuinea, thePhilippines, Singapore,
Thailand, andtheUnited States.Republic ofKorea WT/TPR/S/19
Page 21
onanm.f.n. andnational treatment basis, andefforts areunder waytoimprove information onexisting
procurement opportunities under therelevant WTO Agreement (tobeimplemented byend-1996).11
16. KoreanexportscurrentlyqualifyundertheGeneralSystemofPreferences(GSP)of31countries,
including Canada, theCzech Republic, theEuropean Union, Japan, NewZealand, Norway, Russia
andSwitzerland. Preferences were terminated in1989 bytheUnited States, in1992 byAustralia,
andin1996bytheEU(formajor items), Canada (motor vehicles only) andRussia (clothing andothers).
Exports under GSPpreferences accounted forabout 9percentoftotalexports in1994.
17. Participating intheGlobal System ofTrade Preferences (GSTP) among developing countries
since itsinitiation in1989, Korea currently offers preferential tariffs on26items (e.g.sugar caneand
plastic containers). Theaverage margin ofpreference isabout 10percent. Inthecontext ofTrade
Negotiations among Developing Countries, Korea grants concessions on12items, alsowithanaverage
margin ofabout 10percent. Under the1976Bangkok Agreement, itextends preferences on208items
toallsignatories (Bangladesh, India, LaosandSriLanka) andon29additional items toBangladesh
andLaosonly. Theconcessional ratesaresetatabout 70percentofthegeneral rate; 12items were
tobeadded inconnection withPapua NewGuinea 'saccession totheagreement in1995. Given the
limited product coverage ofthese Agreements, theshare ofpreferential intotalimports remains
significantly below 1percent(0.1percentfortheBangkok Agreement and0.6percentforGSTP
in1995).
(4) Other Initiatives
18. Korea 's"International Cooperation Tariff" isused toimplement theresults ofbilateral
negotiations onanm.f.n. basis. Thenumber ofitems covered, at10-digit HSlevel, fellfrom 115
in1992 to64in1994, following theexpiry ofconcessions ontelecommunications equipment. (The
concessions werediscontinued asthegeneral tariff fortelecommunications equipment came down to
theco-operation tariff rates.) In1995thenumber onconcessions increased to248aftertheinclusion
ofreduced ratesforautomobiles (59items atHS10-digit level), agricultural products (129items) and
otheritems. Thereductions, tobeimplemented ontheapplied tariff, wereagreed withtheUnited States.
19. Onaunilateral basis, Korea hascontinued tooperate itsImport Diversification Programme,
under which imports of152items fromJapan arecurrently prohibited, andtheLocalization Programmes
fordomestic machinery andother capital goods (Chapter III(3)(iii) andChapter IV(3)(vi)).
11Other "down-payments" inconnection withtheAction Planincluded accelerated investment liberalization,
tariff reductions, deregulation measures andstrengthened protection ofintellectual property rights.WT/TPR/S/19
Page 22Trade Policy Review
Annex II.1
Institutional Changes inTrade-related Policy Areas
1. Since Korea 'sinitial Trade Policy Review in1992, there havebeenanumber ofchanges in
thebasicinstitutional framework governing theformulation andimplementation oftradeandinvestment
policies.12TheMinistry ofTrade andIndustry wasmerged withtheMinistry ofEnergy andResources
in1993toformtheMinistry ofTrade, Industry andEnergy (MOTIE). Therestructuring wasintended,
according totheauthorities, toexploit thesynergies ofalarger administrative unitandhelpadvance
deregulation andde-bureaucratization oftheeconomy. In1994, theMinistry ofFinance andEconomy
(MOFE) wascreated asaresult ofmerging theEconomic Planning Board withtheMinistry ofFinance.
TheKorea FairTrade Commission (KFTC), previously under theauspices oftheEconomic Planning
Board, became anindependent administrative agency under thePrime Minister in1994; theKFTC 's
status wasfurther upgraded inMarch 1996 (Chapter III(4)).13Thecurrent decision-making structure
intrade-related policy areas ispresented inAnnex Chart II.1.
12SeeGATT (1992), pp.37-48 foradetailed description oftheprevious policy structure.
13InMay1996, thePresident announced agovernment decision toestablish aMinistry forMaritime Affairs
consolidating theFisheries Administration ofKorea andtheNational Maritime Police Agency aswell as
maritime-related functions ofexisting ministries. ThenewMinistry would haveresponsibility formaritime and
fisheries policies, portconstruction, shipmanagement, ocean security, andocean conservation (Korea Herald,
1June 1996).Republic ofKorea WT/TPR/S/19
Page 23
WT/TPR/S/19
Page 24Trade Policy Review
Annex II.2
Trade Disputes andConsultations, January 1992 -July1996
(1) Cases under GATT andWTO Provisions
1. InFebruary 1992, aPanel wasestablished under theTokyo Round Agreement onSubsidies
andCountervailing Duties concerning Korea 'simposition ofanti-dumping duties onpolyacetal resins
fromtheUnited States. ThePanel found Korea 'sinjury determination tobeinconsistent withvarious
Articles oftheAgreement, andrecommended thatKorea bring itsmeasures intoconformity. Thereport
wassubsequently adopted, andKorea terminated themeasure.14
2. TheUnited States requested consultations withKorea inMay1995 inregard totheshelf-life
ofvariousproducts.ThetwocountriesnotifiedtheWTOinJuly1995thatamutuallyacceptablesolution
hadbeenreached, including arevision oftheshelf-life regulations concerned.15While theUnited States
subsequently claimed Korea 'simplementation tobeunsatisfactory, theKorean authorities stressed that
allchanges hadbeenimplemented asagreed16;inaddition, shelf-life regulations would beliberalized
byend-1988 forvirtually allproducts, except forsome highly perishable items.
3. TheUnited States requested consultations withKorea inApril 1995andMay1996inregard
totesting, inspection andother procedures governing imports ofagricultural products. Thesecond
request wasbased onperceived violations ofGATT Articles IIIandXI; Articles 2,5and8ofthe
Agreement onSanitary andPhytosanitary Measures; Articles 2,5and6oftheAgreement onTechnical
Barriers toTrade; andArticle 4oftheAgreement onAgriculture.17According totheauthorities,
Korea made various regulatory changes between April 1995andMay1996toharmonize national with
international inspection systems andshorten theperiod required forcustoms clearance.18Inaddition,
Korea willintroduce random sampling forlaboratory testsandabolish current mandatory sorting
requirements before import clearance aswellasanobligation tospecify thepercentage share ofall
ingredients.
4. InNovember 1995 Canada requested consultations overregulations ontheshelf-life and
disinfection ofbottled water, claiming inconsistencies withGATT Articles IIIandXI;Articles 2and5
oftheAgreement onSanitary andPhytosanitary Measures; andArticle 2oftheAgreement onTechnical
Barriers toTrade. InApril 1996, thetwoparties announced theyhadreached asettlement under which
Korea undertook toamend therelevant lawsandregulations.19
14GATT documents ADP/092, 2April 1993, andADP/M/40, 15September 1993.
15WTO documents WT/DS5, 5May 1995, andWT/DS5/5, 31July1995.
16InOctober 1995, 207items were liberalized, followed by10and44items inMarch andJuly1996,
respectively.
17WTO documents WT/DS3, 6April 1995, andWT/DS41, 31May 1996.
18Themeasurestakenincludean"ExpeditedClearanceSystemforFreshFruitsandVegetables",a"Pre-arrival
Application System" anda"System fortheRecognition ofAuthorized Foreign Sanitation Inspection Agencies
andtheir TestCertificates".
19WTO documents WT/DS20, 22November 1995, andWT/DS20/6, 6May 1996.Republic ofKorea WT/TPR/S/19
Page 25
5. InMay1996theEuropean Communities requested consultations inregard tolaws, regulations
andpractices inthetelecommunications sector. TheECfeltthattheprocurement practices ofKorea
Telecom andtheDacom company discriminated against foreign suppliers, andthattheKorean
Government hadfavoured U.S.suppliers under twobilateral agreements.20
(2) Other Fora
6. Korea maintains avariety ofbilateral contacts withmajor trading partners, inparticular Japan,
theUnited States andtheEuropean Union, todealwithtrade problems.
20WTOdocumentWT/DS40,20May1996.Theauthoritieshaverepudiatedthelegaland/orfactualfoundations
ofthese claims, indicating thatconsultations were currently being heldonsome oftheissues involved.