./.WORLD TRADE
ORGANIZATIONS/CSS/W/85
11 May 2001
(01-2433)
Council for Trade in Services
Special SessionOriginal:  English
COMMUNICATION FROM THE REPUBLIC OF KOREA
Negotiating Proposal for Distribution Services
The following communication has been received from the delegation of the Republic of
Korea with the request that it be circulated to the Members of the Council for Trade in Services.
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I. INTRODUCTION
1. The distribution services sector provides a crucial link between producers and consumers and
contributes to enhancing the competitiveness of other sectors, through the efficient management of
sales channels, logistics and information. Well-functioning distribution service sector also promotes
consumer welfare by maintaining reasonable price level and providing consumers with various goodsand services in a timely and efficient manner.
2. The distribution industry forms the basis of the national economy and accounts for a
significant part of economic activities in developing and developed countries. In Korea, as in many
countries, the distribution industry is second only to the manufacturing industry in its contribution to
employment.  In Korea, the distribution industry accounted for 18.1% of total employment in 2000.
3. The distribution services sector, as a knowledge-based industry, is growing at a rapid pace.  It
is one of the sectors where the developments of and investment in information technology play asignificant role.
4. The negotiations on distribution services should aim at achieving further liberalization of the
distribution market and boosting consumer welfare by removing unnecessary barriers and regulations
to trade in services.
II. SCOPE OF THE NEGOTIATIONS
5. Negotiations on distribution services should take place based on the WTO classification list
(W/120), covering the following sub-sector;
− Commission agents’ services
− Wholesale services
− Retail services
− Franchising services
6. A number of products are excluded from the current schedules of some Members.
Negotiations should also address the scope of products exclusions with a view to achieving furtherliberalization.S/CSS/W/85
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III. EXPECTATIONS FROM THE NEGOTIATIONS
7. Despite the significance of the distribution services sector in their national economies, few
members have made specific commitments in the distribution services sector.  Negotiations should
aim at a substantial liberalization of distribution se rvices sector by removing restrictions on market
access and national treatment and by promoting transparency in domestic regulations.
8. Also, when a country has already taken autonomous liberalization measures in its distribution
services sector beyond its schedule of specific commitments, credit should be granted.
9. Since the cross-border supply of services (Mode 1) is directly connected with e-commerce
issues, the discussion on cross-border supply of services should proceed alongside the discussion on
e-commerce in the General Council.
10. The following measures, which work as barriers to trade in distribution services, should be
effectively addressed in the negotiations:
• Restrictions on market access and national treatment;
− Requirements for minimum amount of annual sales and capital,
− Restrictions on foreign equity participation,
− Restrictions on the geographical areas for and size and number of stores,
− Limitations on the volume and variety of sales items.
• Domestic regulations;
− Lack of transparency in licensing procedures and administrative
  regulations,
− Onerous and unnecessary procedures and documentation requirements.
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