RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/138
9 May 2000
(00-1884)
Council for Trade in Services Original:  English
COMMUNICATION FROM KOREA
Review of Article II Exemptions
Questionnaire on the List of MFN Exemptions
The attached paper has been received from the delegation of Korea with the request that it be
circulated to Members of the Council for Trade in Services.
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1. According to paragraph 4(a) of the Annex on Ar ticle II Exemptions, the Council for Trade in
Services is supposed to examine in its meetings to be held on May 29-30 and July 6-7, whether the
conditions, which created the need for the exemptions, still prevail 5 years after the entry into force ofthe WTO Agreements.
2. Korea believes that MFN exemptions should be kept to a minimum in order to maintain and
strengthen the application of the GATS principles.  In this regard, Korea attaches great importance to
this review. This review, if properly carried out, will contribute to the transparency and progressive
liberalization of the trade in services, and also pave the way for future negotiations.
3. After careful review of hundreds of exemptions, we found that these measures can largely be
grouped into: (i) exemptions due to historic and/or geographical considerations, (ii) exemptions due toregional trade agreements, and (iii) exemptions due  to policy reasons. In order to further promote the
WTO principles of strengthening multilateral tradin g rules, Korea firmly believes that the above
grouping of exemptions should be examined and reviewed in reverse order, giving priority to
exemptions due to strategic reasons.
4. Most WTO Members also recognize that at the closing phase of the UR there was not enough
time given for Members to devise a well-developed guideline on listing the MFN exemptions.  In this
regard, Korea believes that a examination is needed to ensure largely:  (i) clarification and/or
completion of entries, (ii) necessity of exemptions to be listed, and (iii) clarification of the conditions
creating the need for exemption, in reverse order of priority.
5. Taking these two sets of priorities into consideration, Korea has prepared the following
questions regarding those measures, which are economically meaningful and relevant in Korea’s
view. Korea would appreciate if Members would provide their responses in advance, if possible.
These questions are not, however, exhaustive and thus Korea may make further questions, orally and
in writing, prior to and during the review session.S/C/W/138
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1. All Sectors
6. Austria and Switzerland (page 2)
− How are MFN exemptions applied to newly-admitted members (Austria, Finland and
Sweden) of the European Union?
7. Canada (page 3)
− Which countries does Canada have agreements with?
− Does this exemption include future measures?
− Has there been a review on the intended duration? (It was ‘ Indeterminate.’)
8. Costa Rica (page 3)
− Please specify those ‘preferential’ measures in column 2.
9. Cyprus (page 4)
− Does the Customs Union Agreement between Cyprus and the EU (listed in column 5)
not fall under the scope of Article V of GATS?
10. Egypt (page 6)
− Please clarify what “possibly other countries” exist, or are possible, under column 3.
11. EU -France (page 8)
− Please clarify “certain activities and professions” under column 2.
12. EU (page 10)
− Please clarify the exact scope of “principally construction and hotel and catering” in
column 1.
13. Indonesia (page 13)
− Please clarify the exact scope of “limited access” and “low level occupations” in
“limited access to low level occupations” in column 3.
14. Malaysia (page 16)
− Please specify measures that are carried out “in a preferential and differentiated
manner” in column 2.
− Has there been a review of this exemption?
− Please explain if there are other measures that would also “maximize economic
benefits of foreign participation in the Malaysian economy.”
15. The Philippines (page 18)
− Please confirm if “traders and investors” in column 2 conforms with “natural persons
supplying services” in column 1.S/C/W/138
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16. Poland (page 19)
− What are the specific measures “that go beyond limitations embodied in Poland’s
schedule of specific commitments” in column 2?
− Has there been a review of this exemption?
− Please specify the countries Poland has “reciprocal provisions” with.
17. Singapore (page 20)
− Please explain the results of the periodic review as mentioned in column 4, row 1.
− Please specify the scope of “traditional sources of supply” as mentioned in column 2,
row 1.
− Please explain the results of the periodic review as mentioned in column 4 and row 2.
− Which countries are new signatories that Singapore has concluded IGAs with?
18. Thailand (page 23)
− Has there been a review of this exemption?
− Please explain briefly how many US citizens were given national treatment beyond
Thailand’s GATS commitment since 1995.
19. The United States: 1st row (page 27)
− Does this exemption include future agreements?
20. The United States: 2nd row (page 27)
− Please specify those countries to which restrictions were imposed since 1995.
21. The United States (page 29, 32)
− Are “prevention of double taxation and proper tax administration” and “foreign policy
considerations” in column 5 on page 29 covered by Article 14?
− Are “environmental and health and safety measures” in column 2 on page 32 covered
by Article 14?
2. Business Services
22. Singapore (page 36)
− Please explain the results of the review.
− How many foreign law firms were established on a “case-by-case approval” since
1995 as mentioned in column 5?
23. Thailand (page 36)
− Please specify which countries have bilateral agreements with Thailand.
− How many foreign auditors were allowed to provide services in Thailand on a
reciprocal basis since 1995?
− Has there been a review of this exemption?S/C/W/138
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24. Venezuela (page 37)
− Please provide an entry for “ conditions creating the need for the exemption” under
column 5.
25. New Zealand (page 39)
− Please specify those countries "with whom such arrangements may be desirable"
under column 3.
26. Thailand (page 40)
− Please specify which countries have treaties with Thailand.
3. Communication Services
27. Turkey (page 40)
− Please explain why it is necessary for Turkey to schedule this exemption on the
pricing of mail.
28. Argentina (page 40)
− Has there been a review of this exemption?
− How many authorizations were given under reciprocity since 1995?
29. Bangladesh, Sri Lanka (page 40,43)
− Please specify the "neighbouring countries" to which the measure applies in
column 2.
30. Sri Lanka: 1st row (page 43)
− If Sri Lanka Telecom Limited is privatized or competition is introduced in
telecommunications market, will agreements by competitors be covered by this
exemption?
31. Bangladesh, India, Pakistan, Sri Lanka, Turkey (page 40-43)
− Please specify measures other than  the application of different accounting rates in
column 2.
32. United States (page 44)
− Is "one-way satellite transmission of DTH and DBS" regarded as a
telecommunication service in the US?
− Please specify what "certain markets" are in column 5.
− Please specify the corresponding domestic law, which necessitates these differential
treatment.S/C/W/138
Page 5
4. Audiovisual services
33. Australia (page 45)
− Please clarify “unreasonable unilateral action” in column 5.
− Please specify those "countries where cultural co-operation might be desirable" and
have received preferential treatment since 1995.
34. Austria (page 46)
− Please clarify the current status of this exemption since integration into the EU.
35.  EU: 3rd row (page 55)
− Please explain “redressive duties” in column 1.
− Please explain why this measure is a preferential treatment.
− Please specify what constitutes "unfair pricing practices" in column 2, and “serious
disruption” in column 5.
36. EU: 4th row (page 55)
− Please specify what constitutes "adverse, unfair or unreasonable conditions or
actions" in column 2.
− Please explain why “measures taken to prevent, correct or counterbalance” are
preferential treatment.
5. Construction and Related Engineering Services
37. Indonesia (page 74)
− Please confirm that construction services for “government funded projects” can be
covered under the GATS XIII.
− Please explain how this exemption applies to new ASEAN members.
6. Distribution Services
38. Switzerland (page 75)
− Please explain why this measure is not covered by Article V of GATS .
39. Venezuela (page 75)
− Please provide the entry for "conditions creating the need for the exemption" in
column 5.
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