WT/TPR/G/414 /Rev.1  
21 December 2021 
(21-9527) Page: 1/15 
Trade Policy Review Body   Original: English  
 
TRADE POLICY REVIEW  
REPORT BY  
REPUBLIC OF KOREA 
Revision  
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the 
Marrakesh Agreement Establishing the World Trade Organization), the policy statement by Republic 
of Korea  is attached.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 WT/TPR/G/414 /Rev.1  • Republic of Korea  
 
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  Contents  
1   INTRODUCTION  ................................ ................................ ................................ ..........  3 
2   ECONOMY AND TRADE  ................................ ................................ ................................ . 3 
3   ECONOMIC POLICY  ................................ ................................ ................................ ...... 5 
3.1   Core Values of Economic Policies: Innovation, Inclusion, and Fairness  ................................  5 
3.2   Policies to Respond to the COVID -19 Pandemic: Korean New Deal  ................................ ..... 5 
3.3   Sectoral Polic ies ................................ ................................ ................................ ..........  6 
3.3.1    Agriculture and Fisheries: Implementation of the Agreement on Agriculture and  
Systemic Management of Fisheries Resources  ................................ ................................ .........  6 
3.3.2    Manufacturing: Becoming a Strong Industrial Powerhouse  ................................ .............  7 
3.3.3    Energy: Achieving Sustainable Growth and Enhancing Quality o f Life through  
Energy Transition  ................................ ................................ ................................ ................  7 
3.3.4    Services: Building the Foundation for Trade in Services  ................................ .................  8 
4   TRADE AND INVESTMENT POLICY  ................................ ................................ ...............  8 
4.1   Multilateral Trade Cooperation  ................................ ................................ .......................  8 
4.1.1    WTO Negotiations  ................................ ................................ ................................ ..... 8 
4.1.2    Cooperation through Multilateral Fora including the APEC  ................................ ..............  9 
4.1.3    Development Cooperation and Support for Developing Countries  ................................ ...10 
4.2   Regional and Bilateral Trade Cooperation  ................................ ................................ .......11 
4.2.1    FTA Poli cies ................................ ................................ ................................ ............. 11 
4.2.2    New Southern and New Northern Policies  ................................ ................................ ....12 
4.3   Trade Policies  ................................ ................................ ................................ ............. 12 
4.4   Invest ment Policies  ................................ ................................ ................................ .....13 
5   INTERNATIONAL COOPERATION TO RESPOND TO COVID -19 ................................ .... 13 
6   THE WAY FORWARD  ................................ ................................ ................................ .. 14 
 
 
  WT/TPR/G/414 /Rev.1  • Republic of Korea  
 
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  1  INTRODUCTI ON 
1.1.  An unprecedented global  pandemic  and growing uncertaint ies across the globe have resulted 
in a global economic recession and contraction in trade . Against this backdrop, the Republic of Korea 
is making  bold efforts to reduce  inequality  and secure its growth potential while pursuing the 
liberalization of  global  trade.   
1.2.  The Moon Jae -in administration , launched in May 2017, has implemented  a range of policies to 
facilitate the shift towards a "human -centric and sustainable economy " and thereby overcome the 
challenges  facing the Korean economy, such as continued low growth  and growing inequality . The 
Administration has also adopted policies to create quality jobs and ease regulation across its overall 
economy, in order to  help restore the virtuous circle of employment, income distribution, and growth. 
As the pandemic led to a global  economic downturn and fundamental social changes , the 
Administration  released a "Korean New Deal " initiative, which rests on  three key pillars: establishing 
infrastructure for a digital econom y (Digital New Deal) , realizing  a low-carbon , eco-friendly economy 
(Green New Deal), and strengthening social safety nets and fostering talent in  new industries 
(Human New Deal).  
1.3.  As a country that has greatly benefited from the WTO-based multilateral trade system, Korea 
is participat ing in the  sub-group to s upport the WTO reform and normalize its functions. Korea also 
actively  engages in the negotiations  on: fisheries subsidies to protect the marine environment , 
e-commerce to set digital trade rules , and investment facilitation to create a transparent investment 
environment.  
1.4.  Amid the global pandemic, Korea  has contributed to discussion s on international  cooperation , 
playing a leading role in the joint  ministerial statement which aims to facilitate the movement of 
essential goods, services, and p ersonnel  during the COVID -19 pandemic . It has also help ed reflect  
pending  issues such as facilitating the movement of businesspeople and securing global supply 
chains to the G20 Ministerial Declaration.  
1.5.  In addi tion, Korea has taken part in  a suite of  FTAs encompassing  rules on goods, services, 
and intellectual property rights, helping further promot e trade liberalization. The Korean Government 
has also adopted the New Southern Policy and New Northern  Policy  with a view to deepening  trade 
and investment within the region and paving a way  for a mutually beneficial economic cooperation . 
2  ECONOM Y AND TRADE  
Robust economic growth and employment  
2.1.  The Korean economy continued to grow  between 2016 and 2019. Korea's real GDP increased 
to KRW 1,85 3 trillion in 2019  from KRW 1,70 7 trillion in 2016, demonstrating  stable growth at a rate 
hovering over 2% ( 2.9% in 2016 and  2.2% in 2019 ). However, in light of  the global pandemic , GDP 
growth fell to negative 0.9% in 2020 with real GDP of KRW 1,83 7 trillion .1 Meanwhile, Korea 's world 
GDP ranking maintained an upward trajectory from 14th in 2016 to 10th in 2020.2 Overall, the Korean 
economy remains stable even amid the double threat of the world's economic uncertainty  and the 
global pandemic.  
2.2.  Korea 's employment rate remained steady at around 60% between  2016 and 2020. However, 
the quarterly employment rate  began to show a year -on-year decrease since 20 20 mainly due to 
the global pandemic, recording 58.6% in the first quarter of 2021. The figure has rebounded since 
the second quarter of 2021, rising to 61%.3 
Maintaining status as a key player in trade  
2.3.  Korea's export and import showed a remarkable growth b etween 2016 and the first half of 
2021, despite fluctuations caused by volatility in the global economy and the COVID -19 pandemic. 
Exports in the first half of 2021 increased by 25.7% from the same period in 2016. In particular, 
 
1 Bank of Korea, KOSIS . 
2 IMF. 
3 KOSIS.  WT/TPR/G/414 /Rev.1  • Republic of Korea  
 
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  exports  in 2017 and 2018  each recorded the second highest and  an all -time high , showing a 
year-on-year increase of 15.8% and 5.4%, respectively.  From 2019, exports decreased for 
two consecutive years due to the COVID -19 pandemic  and a  slowdown in global trade but have 
shown a rapid recovery since the third quarter of 2020.  
2.4.  Korea  has maintained a trade surplus for 12 consecutive years. Despite shrinking  global  trade 
and slow economies in major countries, Korea  successful ly secured  its status as the world's 
seventh -largest exporter and  ninth-largest importer as of 2020, representing 3% of the world 's trade 
volume.4 
2.5.  Korea 's main export items include semiconductors, automobiles and parts, petroleum products, 
vessel , marine structures  and parts, liquid crystal devices (LCD), and wireless communication 
devices. As the transition to a digital, online  economy accelerate d in light of the pandemic, exports 
of IT products , such as  semiconductors, home appliances , and computers , have shown a continued 
increase. Furthermore, exports of bio -health products, secondary batteries, and other new items are 
rapidly growing, contributing to the recent boost in exports. Crude oil and gas, ore, semiconductors, 
and automobiles are among Korea's main impor t items. In particular, intermediary and capital goods 
related to export represent a large part of the overall import.  
2.6.  In geographical terms , China  (25.9% ) was the largest export destination followed by ASEAN 
(17.4% ), North America (15.5%),  and Europe (13 .2%), as of 2020. As for imports , China maintained 
the first place ( 23.3%), followed by  Europe (16.4%) , North America (13.2%) , and ASEAN (11.7%) . 
The U.S. accounts for 93.1% of Korea 's export to North America and 92.9% of Korea 's import from 
North America. Korean exports to the U.S. continued to rise  from USD 66.5 billion in 2016 to 
USD 74.1 billion in 2020. Exports to  China, Korea 's biggest trading partner, rose from 
USD 124.4  billion in 2016 to USD 132.6 billion in 2020.5  
2.7.  In the  service  sector , exports  increased  from USD 94.8 billion  in 2016  to 103.8 billion  in 2019,  
but in 2020 decreased to USD 90.1 billion . Imports in services rose from USD 112.1  billion in 2016 
to USD 133.0 billion in 201 8, but dropped to USD 130.7  billion  in 2019 and further to 
USD 106.3  billion  in 2020. In the tourism sector, both exports and imports in 2020  halved  compared 
to the previous year . Trade in transportation and construction has  also declined since 2019, but bot h 
export and import increased in financial services and services in communications /computer / 
information during the same period.6 
Stable inbound FDI despite the global contraction in investment  
2.8.  Korea's inbound foreign direct investment (FDI , arrival basis)  grew from USD 10.8 billion  in 
2016 to USD 17.3 billion in 2018, but  dropped to USD 11.1 billion in 2020 , due to a global contraction 
in investment following  the pandemic.7 However, thanks to the expectations  for a global economic 
recovery, the figure reached USD 7.8 billion in the first half of 2021. By sector, inflow of FDI was 
greater  in services (78%) than manufacturing (19%), and the largest origin of investment was the 
EU (34%) , followed by East and Southeast Asia  (31%) and Americas  (28%) in 2020.  In particular, 
inbound FDI showed a remarkable increase in high  value -added sectors, such as the K-New Deal 
(+163.4%), new ind ustries (+37.8%), and materials , parts, equipment  (+14.7%).  
2.9.  The outbound FD I (remittance basis)  from Korea grew from USD 40.3 billion in 2016 to 
USD 64.3 billion in 2019, but fell to USD 54.9 billion in 2020.8 As of 2020, finance  and insurance 
businesses showed the largest FDI outflows (32%) followed by the manufacturing industry (24%) 
and real est ate businesses (14%). The U.S. was the top investment destination (32%) , followed by  
Asia (31%) and Europe (18%).  
 
4 Korea International Trade Association, IMF.  
5 Korea International Trade Association.  
6 Bank of Korea.  
7 Press release from the Ministry of Trade, Industry and Energy (Foreign Direct Investment trends in 
2019, 2020, and the first half of 2021).  
8 Press rel ease from the Ministry of Economy and Finance ( Foreign Direct Investment in 2020 ). WT/TPR/G/414 /Rev.1  • Republic of Korea  
 
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  3  ECONOMIC POLIC Y 
3.1  Core Values of Economic Policies: Innovation, Inclusion, and Fairness  
3.1.  Korea has extend ed strong efforts to make a policy shift  to realize a "human -centric  economy ," 
and thereby resolve slow growth and widening gaps while producing a path towards  sustainable 
growth. The Korean  Government  is making determined  policy efforts to realize three core values: 
innovation, inclusion, and fairness.9 
3.2.  For innovation, Korea  seeks to promote  innovation across  the industrial ecosystem by lifting 
unnecessary regulations. For inclusion, it is working  to enhance  the quality o f jobs and strengthening 
safety nets for the low -income  and vulnerable population,  in an effort to reduce inequality  and build 
a more inclusive economy. And, for fairness, Korea  is combating unfair business  practices and 
encouraging cooperation among large  and small  and medium -sized companies , to build a solid 
foundation for a sound market economy .  
3.2  Policies to Respond to the COVID -19 Pandemic: Korean New Deal  
3.3.  In late 2019, the unprecedented outbreak of COVID -19 caused a global economic recession 
and transf ormational changes to the  economic and social system. Against this backdrop , Korea  
announced the "Korean New Deal " policy in July 2020, as a vision to  address the global crisis and 
be fully prepared  for the post -COVID -19 era.10 The initiative is built upon the three pillars of "Digital 
New Deal, " "Green New Deal, " and "Human New Deal. " 
Chart 3.1 Korean New Deal11 
 
Digital New Deal  
3.4.  The COVID -19 pandemic has sparked a sharp increase in demands for online  and contactless  
services, accelerating the transition to a digital economy. In line with this trend, the Korean 
Government  introduc ed a "Digital N ew Deal " to promote digital innovation across the economy and 
to build infrastr ucture for online  and digital industries. The Korean Government  aims to create a 
strong ecosystem for the data, network, and AI industries, collectively referred to as the "D.N.A. 
industries ," by supporting the use of and convergence among data, 5G, and AI  technologies across 
all industries. It is also going  great lengths  to build infrastructure for smart medical services using 
5G and IoT, all in an effort to promote online services in the areas closely related to people's lives, 
and to invite small busines s owners to take full advantage of smart technologies . 
 
9 Ministry of Economy and Finance, The Fourth Anniversary of the Moon Administration, Economic Policy 
Achievements and Challenges (7 May 2021).  
10 Related government agencies , Comprehensive Plans for Korean New Deal (14 July 2020).  
11 Ministry of Economy and Finance, "Korean New Deal: National Strategy for a Great Transformation" 
(28 July 2020).  
Digital New DealKorean New Deal
3. Fostering the 'Untact' Industry
4. Digitalization of Social Overhead Capital (SOC)2. Digitalization of Education Infrastructure1. Stronger Integration of DNA throughout the EconomyGreen New Deal
5. Green Transition of Infrastructures
6. Low -carbon and Decentralized Energy
7. Innovation in the Green Industry
Stronger Safety Net
Employment and Social Safety Net + Investment in Human ResourcesWT/TPR/G/414 /Rev.1  • Republic of Korea  
 
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  Green New Deal  
3.5.  Environmental conservation and sustainability have assumed a renewed importance in the 
wake of the COVID -19 pandemic, highlighting greater need for low -carbon and eco -friendly policies. 
In line with this trend, the Korean government  is pushing for a "Green New Deal " with the goal of 
achieving carbon neutrality by 2050. K ey elem ents of the initiative include:  laying the groundwo rk 
for carbon neutrality, realizing a green transition in urban, spatial , life infrastructure, promoting low -
carbon energy and a distributed energy system, and building an ecosystem for innovation  of the 
green industry . 
Human New Deal  for Strengthened Safety Nets  
3.6.  The pandemic has also reminded us of  the necessity of policies to overcome the shock on 
short-term jobs as well as respond ing to fundamental changes in the employment market cau sed 
by the transition towards a green and digital economy. In response, Korea  aims to strengthen safety 
nets for th e vulnerable, use the "Investment in People " policy  to foster talent  to create more jobs in 
new industries and narrow the digital gap.  
3.3  Sectoral Policies  
3.3.1   Agriculture and Fisheries : Implementation of the Agreement on Agriculture and 
Systemic Management of Fisheries Resources  
3.7.  In the agricultural sector, Korea newly adopted the "New Direct Payment Program " in 
May 2020, revising the existing direct payment system including the "Rice Income Compensation  
Scheme. " Direct payments under the Rice Income Compensation Scheme were originally granted 
based on the difference between the target price and the annual harvest -period price. However, the 
new program me separates qualifications  for direct payment from the production  or prices of 
agricultural products, removing possible distortion in the market and trade. The new program me 
also contributes to sustainability and multifunctionality of agriculture  ­ such as the conservation of 
the en vironment and rural landscape  - as farmers who receive direct payments are required to 
comply with more stringent  obligations concerning the environment, safety, and community . 
3.8.  As of 2021, Korea has concluded 17 FTAs with 57 nations, which ha ve led to an i ncrease in 
agricultural trade with FTA partners while contributing  to market liberalization.  As of 2020, Korea's 
agricultural trade volume amounted to a total of USD 41.79 billion, of which USD 33.72 billion 
(80.6%) came from trade with its FTA partners.  
3.9.  Furthermore, Korea has terminated the special treatment of rice under Annex 5 of the 
Agreement on Agriculture and from 2015 began applying ordinary customs duties. The WTO officially 
circulated a communication (WT/Let/1506) in January 2021, notifying the en try into force of the 
modifications and rectifications to the Schedule of Korea, complet ing the procedures for the 
application of ordinary customs duties.  
3.10.   In the fisheries industry, Korea has taken  various measures to effectively manage fisheries 
resources  and build a foundation for sustainable fisheries, including the Total Allowable Catch (TAC), 
closed seasons , size restrictions, and self -management fisheries system . Korea  is also continu ing its 
efforts to build more marine forests and marine ranches (including by creating artificial fishing reefs 
to restore the marine environment) as well as spawning grounds and habitations for fisheries 
resources.  
3.11.   In an effort to protect fisheries resources and  improve the environment of fishing grounds, 
Korea has doubled its efforts to collect lost or discarded  fishing gears. At the same time, measures 
have been  taken to raise awareness about fisheries protection , through public campaigns, public 
education and other promotion al activities.  
3.12.   As a result of such efforts, the area of marine forests increased from 15,252  ha in 2017 to 
24,258  ha in 2020, and the number of marine ranches increased from 45 to 50 during the same 
period. The amount of collected lost or di scarded fishing gears also continued to rise from 
2,180  tonnes in 2017, 2,219 ton nes in 2018, 2,273 ton nes in 2019 and 2,654 ton nes in 2020, help 
restoring the coastal  marine environment and improving the productivity of coastal  fishing grounds.  WT/TPR/G/414 /Rev.1  • Republic of Korea  
 
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  3.3.2   Manufactur ing: Becoming a Strong Industrial Powerhouse  
3.13.   The Korean Government  has implement ed various industrial policies to position itself as a 
strong industrial powerhouse . These efforts  are built upon Korea 's manufacturing  industry , which is 
an important block of its economy  as well as  a source of quality  jobs and driver of innovative growth. 
In June 2019 , the Government  announced the "Manufacturing Renaissance Vision and Strategy " to 
move away from the  follower  strategy which  only focuses on quantitative growth, and to step up as 
a manufacturing power standing at the forefront of  innovation. Even as it focuses on effectively 
respond ing to the COVID -19 crisis , Korea is dedicated  to further innovat ing and advanc ing its 
industrial structure a nd strengthen ing the industrial ecosystem.  
3.14.   As part of these efforts, Korea  has accelerated the shift towards  a smart er and green er 
industry . Korea has built approximately 20,000 smart factories and seven smart industrial complexes 
by 2020 to improve the productivity of the manufacturing industry. In addition, Korea  has forged 
working groups for digital transformation  in future mobility, home appliances , and other industries,  
in an attempt to promote the utilization  of digital technologies throughout different areas of the 
industrial ecosystem —encompassing  development, production, and consumption. To provide an 
institutional framework  for these efforts , the Korean Government  is currently under the process to 
introduc e the Act on Digital Transformation of the Industries . 
3.15.   To reduce pollutants produced at  manufacturing sites , the Korean Government  introduced a 
total of 98 clean factories and designated around 50 products for remanufacturing  by 2020. Korea 
also aims to lead the new economic order in a greener society  under the 2050 carbon neutrality  
vision, and  is planning to establish  the "Visions and Strategies for Industrial Transformation to 
Achieve Carbon Neutrality by 2050 ."  
3.16.   The Korean Government  has placed its focus on regulation improvement s, standardization, 
and industrial reorganization  to advance Korea 's industrial ecosystem and promote  innovation in  the 
manufacturing  sector . For instance,  the Regulatory Sandbox Regime introduced in 2019  granted a 
total of 102 exemptions by 2020. The regime help ed create new business opportunities , as 
demonstrated by  hydrogen charging stations in urban areas and smart parking robot services. On a 
similar note , the Industrial Convergence Promotion Act  in 2021  was revised to provid e a provisional 
permission for operation to business es that have successfully completed the  demonstration phase, 
in order to secure the continuity  of businesses.  
3.17.   In addition, to develop new services, enhance quality, and strengthen safety in the era of the 
4th industrial revolution, Korea  is making continued effort s to build necessary standards for different 
sectors, such as electric and autonomous vehicles , energy (hydrogen)  and non -memory 
semiconductor . Korea is also planning to propose 300 international standards by 2023. In addition, 
the Special Act on the Corporate Revitalization  enacted in 2016 provides regulatory exemptions and 
simplified procedures  that allows  businesses to promptly carry out voluntary restructuring  and enter 
promising new industr ies before becoming  insolvent. By 2020, a total of 166 small  and medium -sized 
companies were granted approvals for restructuring.  
3.3.3   Energy: Achieving Sustainable Growth and Enhancing Quality of Life through Energy 
Transition  
3.18.   The Korean Government  announced the "Third Energy Master Plan " in December 2019 to 
meet the grand challenge  of our time -transition to clean and safe energy. Envisioning  "sustainable 
growth and improved  quality of life through energy transition, " the Korean Government is committed 
to innovating energy consumption, making the energy mix  cleaner and safer , expanding a distributed 
and participatory energy system, enhancing the global competitiveness of the energy industry, and 
solidifying the foundation for energy transition.  
3.19.   In December 2020, Korea  established plans for the power  industry and new and renewable 
energy sectors. For the power industry, the Korean Government  adopted the "9th Master Plan for 
Power Supply and Demand, " which includes  forecasts for power supply and demand for 2020 -2034 
alongside  plans for demand management , power facilities, improvement of the power market 
system, and reduction of  greenhouse gas emissions. It also announced the "5th Master Plan for New 
and Renewable En ergy," which aims to  generat e 25.8% of electricity from new and renewable energy WT/TPR/G/414 /Rev.1  • Republic of Korea  
 
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  sources by 2034 . This plan covers  improvement of the power system, the expansion of demand for 
renewable energy, and comprehensive policies on new and renewable energy such as  hydrogen.  
3.20.   Korea  also established  a 'Master Plan for Resource Development' on May 2020, which presents  
strategies to develop resources for stable energy supply. This plan includes restructuring of public 
energy c ompanies, making pre -emptive strategies  to address change s in the energy landscape , 
redefining the concept of resource security, and develop ing of a resource security index.  
3.21.   In October 2020, Korea pledged to achieve carbon neutrality by 2050 and announced the 
2050 Carbon Neutral Strategy in Decembe r 2020. With a strong commitment to "achieving carbon 
neutrality, economic prosperity, and a better quality of life, all at the same time ," Korea  has adopted 
a "3 Plus 1 Strategy, " which consists of three policy directions: low -carbon economic structure ; 
low-carbon ecosystem for new, promising industries ; and a just transition towards a carbon -neutral 
society , and includ es a plan to "strengthen the institutional foundation for carbon neutrality ". 
3.3.4   Services: Building the Foundation for Trade in Services  
3.22.   Korea 's export s in service were originally centered on transportation and construction, but it 
is now seeing a rapid growth in the fields of content and intellectual property rights ( e.g. industrial 
property rights and copyrights) . In the content industry, game s, dramas , films, and music have 
become major export businesses. Growing export s of manufactu red goods, such as mobile phones 
and semiconductors, ha ve spurred  continued growth in the export s of industrial p roperty rights 
including product -related designs and patents.  
3.23.   However, unlike trade in goods, it is difficult to clearly identify the status  of export s and 
imports in  services , as these do  not go through customs procedures. The Bank of Korea has  been 
announc ing the volume of trade  in services in the form of balance of payments (service balance) 
based on foreign exchange transaction data collected from foreign exchange banks. However, there 
is no clear distinction between different types of businesses and sectors, creating difficult ies for 
analysing  relevant data and  establish ing trade policies. To gain a clear and detailed understanding 
of the exact export volumes, trends, and major export destinations of emerging service businesses , 
Korea  has started developing statistics on trade in services and is now cooperating with relevant  
government agencies and organizations.  
4  TRADE AND INVESTMENT POLIC Y 
4.1  Multilateral Trade Cooperation   
4.1.  As a member of the GATT and one of the original members of the WTO, Korea has achieved 
rapid economic grow th and development based on the multilateral trade system.  
4.2.  The country was also the first to transform from an aid -recipient country to a  donor  country. 
In October 2019, the Korean Government decided to no longer seek special treatment reserved for 
developing countries in current and future negotiations at the WTO. It also made an unprecedented 
request in June 2021 to the UNCTAD that its status be moved from the List A group (Asian an d 
African member countries) to the List B group (developed nations). Member countries of the UNCTAD 
unanimously decided to change the status of Korea during the 68th board meeting held on 
2 July 2021.  
4.1.1   WTO Negotiations  
WTO DDA Negotiations  
4.3.  The Trade Facilitation Agreement (TFA) entered into force on 22 February 2017, after 
two-thirds of the WTO membership completed their domestic ratification processes. Korea has been 
faithfully implementing the rules on trade facilitation through the UNI -PASS system, which enables 
electronic filing and processing of customs -related documents as well as online payment of customs 
fees and charges, and the Client -oriented Logistics Information System (CLIS). By enhancing the 
transparency and effectiveness of cu stoms clearance procedures, further facilitation of trade is 
expected going forward.  WT/TPR/G/414 /Rev.1  • Republic of Korea  
 
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  4.4.  Korea has been making constructive contributions towards the WTO negotiations on fisheries 
subsidies that aim to accomplish and implement the UN SDGs. Korea has been inten sifying its efforts 
for progress in the negotiations through active participation in both multilateral and bilateral 
consultations among Members given the recent emphasis at the WTO on the need for a conclusion.  
Plurilateral negotiations and other discussi ons 
4.5.  Korea has been actively participating  in major JSI negotiations on e -commerce, investment  
facilitation, domestic regulation in services, MSMEs, and TESSD, as well as talks on trade and 
enviro nment, and trade and health. At the same time, the country has also been making constructive 
contribution s to moving the discussions forward through the submission of proposals on key issues.  
4.6.  As one of the initial participants in the e -commerce negotiations, which began in May 2019, 
Korea has been actively engag ing in not only official negotiations but also small group meetings. It 
has submitted proposals on 16 different articles concerning, inter alia , cross -border data flows, the 
elimination of customs duties on electronic transmissions, and online consumer protection.  
4.7.  Korea is also among the members of the Friends of Investment Facilitation for Development 
(FIFD) , and has been participating in discussions on investment facilitation elements since 2017. 
The official negotiations on investment facilitation wer e launched in September 2020. Korea  was the 
first to submit proposals to insulate the future Agreement on Investment Facilitation for 
Development (IFD Agreement) from international investment agreements (IIAs) ( i.e. the so -called 
"firewall " provisions) in an effort to minimize concerns regarding their possible cross -invocability in 
the WTO and ISDS disputes. In accordance with the firewall provisions, the IFD Agreement will be 
prohibited from being invoked in an ISDS case under WTO Members ' respective IIAs;  and an IIA, in 
particular the ISDS thereunder, will be excluded from the scope of the MFN treatment under the IFD 
Agreement of the WTO.  
4.8.  Furthermore, Korea was a founding member of the working group on domestic regulation of 
services in 1999 and has been c ontributing to moving the discussions forward. The country has also 
been participat ing in plurilateral negotiations on domestic regulation s that were launched in 
April 2019, actively pursuing additional transparency of services regulation and improvement o f 
qualification and licensing requirements and procedures.  
4.9.  Korea has  also continued to participate in discussions on MSMEs since it co -sponsored the Joint 
Ministerial Statement, Declaration on the Establishment of a WTO Informal Work Programme for 
MSMEs i n 2017. It also joined in adopting a package of declarations for MSMEs in December 2020. 
Korea is making its utmost effort to provide improved access to trade related information for MSMEs 
and assi stance for their digitalization under the declarations.  
4.10.   As environment -related  issues have assumed an increasing importance all across  the world, 
the Trade and Environmental Sustainability Structured Discussions  (TESSD) was launched in 
November 2020 to generate concrete results in relation to environmental sustai nability. Along with 
Australia and Singapore, Korea circulated a joint communication on liberalizing trade in 
environmental  goods and services and exchanging views on trade -related environmental measures.  
4.11.   Such discussions are expected to enhance the roles of the multilateral trade system and 
strengthen international cooperation when the trade environment is going through a rapid change 
due to the accelerating transition towards a digital economy, climate change, and the COVI D-19 
pandemic.   
4.12.   In the future, K orea will continue to make constructive contribution s to expediting 
negotiations and discussions and make effort s to achieve meaningful results desired by each JSI 
until the twelfth Ministerial  Conference (MC -12) take s place.  
4.1.2   Cooperation through Multilate ral Fora including the APEC  
4.13.   Korea is an active member of a number of multilateral consultative bodies related to trade, 
such as the Asia -Pacific Economic Cooperation (APEC), Organization for Economic Cooperation and 
Development (OECD), and Group of Twenty (G20).  WT/TPR/G/414 /Rev.1  • Republic of Korea  
 
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  4.14.   As one of the 21 member countries of the APEC, Korea is making continued effort s to make 
progress on the liberalization of trade and investment through the APEC. Under the Bogor 
Declaration, APEC member economies have committed to voluntarily  achieve the goal of free and 
open trade and investment by 2020. According to the 2020 Final Review of APEC's Progress towards 
the Bogor Goals12, Korea has made remarkable progress in the elimination of non -tariff barriers , 
deregulation in foreign investme nt, guarantee of foreign investment , trade facilitation , and 
conclusion of free trade agreements (FTAs).  
4.15.   APEC leaders adopted the "2020 Kuala Lumpur Declaration "13, which includes the "APEC 
Putrajaya Vision 2040, " in Malaysia in 2020. This vision14 include s three key elements  - trade and 
investment liberalization, innovation and digitalization, and inclusive and sustainable growth. Korea 
is actively participating in discussions on digital economy, inclusiveness, sustainability, and 
integration of regional e conomies.  
4.16.   Since joining  the OECD in 1996, Korea has been participating in the Organization's activities 
to contribute to the world's economic development and expand global trade based on multilateralism 
and non -discrimination principles. Under the theme of  "The Path to Recovery: Strong, Resilient, 
Green and Inclusive, " the OECD members discussed ways for economic recovery in a sustainable 
manner amid the COVID -19 pandemic. Regarding trade, they also exchanged views on "the role of 
trade and investment in globalisation  and economic recovery. " Korea  has joined the cooperation at 
the OECD for economic recovery  measures  such as  the following: recommending  trade facilitation 
measures , proposing the facilitation of the essential movement of people, progress of WTO  
negotiations on e -commerce, and support for WTO reform.  
4.17.   As one of the G20 countries, Korea is participating in discussions on new trade and investment 
issues. The country , in particular,  is joining the effort s to find international solutions to urgent and 
important challenges in trade and investment through the G20 Trade and Investment Working Group 
every year. Korea is also actively engaged in various discussions  on the trade and investment agenda 
to respond t o the COVID -19 pandemic at the G20  (e.g. international cooperation, a level playing 
field, and environmental sustainability ). 
4.1.3   Development Cooperation and Support for Developing Countries  
4.18.   As a member of the international society, Korea is carrying out a wid e range of activities to 
reinforce the trade capabilities of developing countries and to help them integrate with the 
multilateral trade system.  
4.19.   Korea has also participated in the WTO's DDA Global Trust Fund (GTF) since 2002, and its 
contributions so far h ave reached around CHF 6  million, including around CHF 350,000 contributed 
in 2020. By doing so, the country has contributed to creating conditions for an expanded multilateral 
trade system.  
4.20.   Furthermore, Korea has provided a range of bilateral assistance t o developing countries to 
help build their capacity related to trade and customs duties. Regarding trade, Korea has provided 
assistance to build platforms for e -commerce to improve the export and import environment and 
promote trade , and provided scholarsh ips to improve trade policies for 35 developing countries as 
of 2020.  
4.21.   Regarding customs duties, Korea  has provided assistance to nineteen developing countries as 
of 2020 to build e -customs systems for an efficient and transparent management of customs 
administration as well as consulting services and training for an efficient and modernized customs 
admini stration.  
4.22.   Through the Economic Development Cooperation Fund  (EDCF), Korea has provided "Aid for 
Trade " for developing countries since 2006, which amounts to US D 10.1 billion, including a project 
 
12 APEC, The Final Review of APEC's Progress towards the Bogor Goals, Viewed at: 
https://www.apec.org/About -Us/About -APEC/Achievements -and-Benefits/2020 -Bogor -Goals .  
13 APEC, Kuala Lumpur Declaration. Viewed at: https://www.apec.org/Meeting -Papers/L eaders -
Declarations/2020/2020_aelm . 
14 APEC, Putrajaya Vision 2040. Viewed at: https://www.apec.org/Meeting -Papers/Leaders -
Declarations/2020/2020_aelm/Annex -A. WT/TPR/G/414 /Rev.1  • Republic of Korea  
 
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  to build a new international port in Cebu, the Philippines  (2017) and a project to improve seaway 
signs in Indonesia (2019), as part of its continued effort s to foster  trade environments for developing 
countries.  
4.23.   Korea joined the Food Assistance Convention (FAC) in January 2018. It has also provided 
50,000 ton nes of rice every year since 2018 to refugees and immigrants of Africa, the Middle East, 
and other countries which  suffer food shortages through the World Food Programme (WFP). Through 
such effort s, Korea is joining the endeavour s of the international society to  achieve food security 
and end famine . 
4.24.   Korea is also expected to help build trade capacity in developing countries in relation to the 
environment by announcing to provide a total of US D 300 million to the Green Climate F und (GCF), 
which is located in Korea , and establishing a trust fund under the Global Green Growth Institute 
(GGGI) to strengthen capabilities to respond to climate change and provide assistance to reduce  
greenhouse gas emissions  and adapt to changes in the climate .  
4.2  Regional and Bilateral Tr ade Cooperation  
4.2.1   FTA Policies  
4.25.   As an open trading nation, Korea has continued to expand its FTA network, based on the 
understanding that market opening and liberalization would help enhance national competitiveness. 
Since the Korea -Chile FTA in 2004, the Pro tocol Amending the KORUS FTA entered into force in 
2019, and the FTAs with the U.K. and five Central American countries also came into effect in 2021. 
As of July 2021 , Korea has an FTA network spanning across 57 different nations through 17 FTAs. 
In additi on, domestic ratification procedures are underway at the Korean National Assembly for the 
FTAs with Indonesia, the RCEP, and Israel.  
4.26.   The Korean Government has been aiming for comprehensive and high standard FTAs covering 
goods, services, investment, and r ules. It has pursued FTAs with the world's largest economies, such 
as the U nited States , European Union, and China, as well as emerging economies, while actively 
participating in the economic integration discussions in East Asia.  
4.27.   The Korean Government is expected to sign the Korea -Cambodia FTA in the near future , and 
it has been engaging in follow -up negotiations with China in the services and investment sectors. 
Korea is also currently negotiating a service and investment FTA with the Russia n Federation , a trade 
agreement with MERCOSUR, and a trade agreement with Uzbekistan ( see Table 4.1.) . 
Table 4.1 Overview of Korea's FTAs (as of July 2021)  
Phase  Partners  Progress  
Effective  (17) Chile (April 2004), Singapore (March 2006), EFTA (September 2006), ASEAN (September  2009), 
India (January 2010), E uropean Union (December 2015), Peru (August  2011), U nited States  
(March 2012), Turkey (August 201 3), Australia (December  2014), Canada (January 2015 ), China 
(December 2015), New Zealand (December  2015), Viet  Nam (December 2015), Colombia 
(July 2016) , United Kingdom  (January  2021), five countries in Central America (March 2021)  
Signed  (3) Indonesia  Negotiations concluded in November 2019, signed 
in December 2020  
RCEP Negotiations concluded  and signed in 
November  2020 
Israel  Negotiations concluded in August 2019, signed  in 
May 2021  
Negotiations  
concluded  (1) Cambodia  Negotiations concluded in Feb ruary 2021  
Negotiating  (8) China (follow -up negotiations in 
services and investment)  9 rounds of official negotiations  
Russia n Federation  (services and 
investment FTA)  5 rounds of official negotiations  
MERCOSUR  6 rounds of official negotiations  
Uzbekistan  1 round of official negotiation  
the Philippines  5 rounds of official negotiations  
Chile (amendment)  5 rounds of official negotiations  
India (amendment)  8 rounds of official negotiations  
Korea -China -Japan  16 rounds of official negotiations  
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  4.28.   Korea will continue  to actively engage in discussions for bilateral and regional FTAs as well as 
mega -FTAs. In addition, it will proactively push ahead with agreements in the digital sectors to keep 
pace with the rapidly changing trade environment in line with the advancement of  digital 
technologies and the COVID -19 pandemic.  
4.2.2   New Southern and New Northe rn Policies  
4.29.   The Korean Government has been implementing the "New Southern Policy (NSP) " and the 
"New Northern Policy (NNP) " since 2017 with the aim of enhancing trade, investment, and economic 
cooperation with emerging economies . 
4.30.   The NSP aims to achieve mutual prosperity with ASEAN countries and India. The Korean 
Government has established high -level bilateral and multilateral channels to build a better 
foundation for bilateral and multilateral cooperation with those countries, including  Committees on 
Economic Cooperation, FTA Joint Committees, and the Korea -ASEAN Finance Ministers Meeting. The 
signing  of the RCEP and Korea -Indonesia CEPA in 2020 has provided a n additional  momentum for 
promot ing Korea 's trade and investment with these partner countries.  
4.31.   Through the NNP, the Korean Government is seeking  greater cooperation with Eurasian 
countries in economy and infrastructure. As part of its effort s to build the foundation for bilatera l 
cooperation with these countries, Korea has set up the "Korea -Turkmenistan Business Council " and 
held working -level meetings with Kazakhstan. It is also currently pursuing an FTA with the Eurasian 
Economic Union (EAEU) and has been engag ing in the FTA negotiations for services and investment 
with the Russia  Federation  since June 2019. In this way, the Korean Government has been further 
intensifying trade networks between Korea and the New Northern countries.  
4.3  Trade Policies  
Digital transition in trade 
4.32.   As the online and contactless  economy has become mainstream, the ability to leverage 
platforms and data has emerged as a source of comparative advantage for trade. The 
interconnection between the online and offline worlds has al so assumed greater importance ( e.g. 
logistics to support the ever -increasing online transactions with the outbreak of COVID -19).  
4.33.   Therefore, the Korean Government has updated  its e-trade services for the digital transition 
in trade. In particular, it has f urther improved the uTradeHub system to substantially  reduce trade 
costs and make trade transactions more intelligent.  
4.34.   The Korean Government has developed, and has been running, a new service  so that 
consignors and sellers who are engaged in e -commerce ca n go through the entire export procedures 
online through the uTradeHub system. The system has also been further improved so that people 
can conduct export -related tasks efficiently . Information contained in commerce invoices, packing 
lists, and other expor t documents is now read by AI and converted into data, which saves effort and 
time to re-enter the same data during the follow -up processes, such as reserving cargos, requesting 
inland transportation, and making export declarations.  
Establishing  a pan -gove rnment cooperation system to overcome the trade crisis caused 
by the COVID -19 pandemic   
4.35.   Since the outbreak of the COVID -19 pandemic, trade is facing more challenging conditions 
than ever before  (e.g. restrictions on cross -border movement and global economi c slowdown ). To 
address such situations, the Korean Government, related organizations, and the industrial sector 
have established a cooperative system, under which vaccination s of those business people who need 
to travel overseas have been prioritized, and standard contract templates  have been distributed to 
reduce possible disputes among export and import companies.  WT/TPR/G/414 /Rev.1  • Republic of Korea  
 
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  4.4  Investment Policies  
Achievements in attracting foreign investment  
4.36.   Currently, the Korean Government is committed to improving  the quality of foreign 
investment, enhancing the linkage with Korean industrial policies, building  the capacity of 
municipalities to attract investment, and improving infrastructure to attract investment.  
4.37.   The amo unt of FDI inflows (on the arrival basis) has witnessed a slowdown in its growth since 
it recorded US D 16.4 billion in 2015. With the influence of COVID -19, it further went down to 
USD 11.09 billion in 2020 (realized FDI). In 2021, however, amid expectatio ns for global economic 
recovery and Korea's successful handling of the pandemic ( "K-quarantine "), the figure rebounded to 
USD 7.8 billion in the first half of the year, setting a second record high among figures for the 
first halves of the years.  
Table 4.2 Achievements in Inducing Foreign Investment  
(unit: US D million)  
 2016  2017  2018  2019  2020  1st half of 
2021  
Declared  21,295  22,948  26,901  23,328  20,747  13,138  
Arrived  10,840  13,761  17,264  13,340  11,090  7,836  
 
4.38.   What is worth noting is that, during the first half of 2021, the declared amount of FDI 
increased by 71.5% (US D 13.14 billion), and the realized amount by 57.3% (US D 7.84 billion), from 
the same period in the previous year. This is sound  growth given the global FDI growth which is 
forecast to be around 10 to 15% this year (June 2021, UNCTAD).  
Promoting foreign investment and enhancing the substantiality  
4.39.   The Korean Government is making an effort to promote re -investment by foreign -capital 
invested companies, to encourage foreign investment in high value -added sectors and to advance 
infrastructure to induce investment.  
4.40.   On 4 February 2020, the Foreign Investment Promotion Act was amended to allow the 
recognition of investment of unappropriated retained earnings in the establishment or extension of 
plants as foreign investment, thereby promoting  re-investment within Korea by foreign -capital 
invested companies.  
4.41.   In addition, t o attract substantive foreign investment, the Government is taking into account, 
inter alia , the market competitiveness of the products by investors, their presence at home, and the 
possib ility of attracting domestic investment.  
Generating more employment from FDI  
4.42.   Since the Foreign Investment Promotion Act  was amended  on 1 April 2019, surveys have 
been conducted every three years to inquire into the effect foreign investment has on job creation 
in Korea. The results of such surveys are incorporat ed into policies to promote foreign investment. 
In addition, to encourage foreign -capital invested companies to hire local employees, a wide range 
of events and program mes are being organized, such as job fairs and employment support weeks.  
5  INTERNATIONAL C OOPERATION TO RESPOND TO COVID -19 
5.1.  On 26 March 2020, Korea, joining other G20 member countries, emphasized the need for 
international cooperation to respond to COVID -19 through the G20 Leaders' Statement with a 
particular emphasis on the supply of food, ess ential medical supplies, and services during the 
pandemic.  
5.2.  The G20 members shared the view that the measures to protect the public health of each 
country should be "targeted, proportionate, transparent, and temporary. " The G20 Trade and 
Investment Ministe rial Statement (of 30 March 2020) reiterated the important roles of the 
multilateral trade system in responding to the pandemic. On 1 May 2020,  Korea led the ministerial WT/TPR/G/414 /Rev.1  • Republic of Korea  
 
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  meeting between five countries - Korea, Australia, Canada, Singapore, and New Zealand - where 
they adopted the "Joint Ministerial Statement on Action Plans to Facilitate the Flow of Goods and  
Services as well as the Essential Movement of People ." This Joint Statement was discussed during 
the WTO General Council meeting, and WTO Members agre ed on the importance of facilitating flows 
of goods and services and the essential movement of people.  
5.3.  Korea supported, as a member of the Ottawa Group, a statement with action plans for 
six different sectors in response to COVID -19 during the Ottawa Group  Trade Ministers' meeting held 
in June 2020. Korea has actively participated in discussions on the "Trade and Health Initiative " to 
seek together ways to facilitate flows of essential medical supplies to counter the pandemic. It also 
co-sponsored the joint  proposal on the said Initiative during the Ottawa Group Trade Ministers' 
Meeting held in November 2020.  
5.4.  In addition , Korea, on its part, has helped improvement of transparency and predictability in 
the flows of essential medical supplies through its imme diate notification to the WTO of its export 
restrictions on the supplies. At the same time, Korea has also been providing practical support to 
respond to the pandemic by, for example, exporting test kits worth around US D 3.38 billion to 
approximately 180 countries by February 2021.  
5.5.  Korea has adopted the "ODA strategies in response to COVID -19" in July 2020 to help 
developing countries overcome the pandemic and has promptly responded  to the needs for 
international  assistance and cooperatio n. The country has donated  PPE for COVID -19 worth 
USD 130 million to 120 countries, and shared quarantine  experiences tailored to aid -recipient 
countries on around 800 occasions. Moreover , Korea has continued to maintain cooperation amid 
the global health crisis through , inter alia , providing US D 480 million in emergency loans to 
13 countries and suspending official bilateral debt payments for 26 low -income countries. Through 
such effort s, it has responded to the needs for emergency medical supplies of deve loping countries 
and, at the same time, contributed to building their capacit ies to counter the infectious disease.  
5.6.  Such efforts by Korea will not only help global response to the COVID -19 pandemic but also 
ensure smooth flows of goods, including essential  medical supplies and vaccines, and services, and 
movement of people in case a simi lar contingency takes place in the future. This will help enhance 
global crisis -responding capacities and strengthen interna tional cooperation.  
6  THE WAY FORWARD  
6.1.  The global ec onomy and trade in recent times have been undergoing an unprecedented crisis 
due to the COVID -19 pandemic and the resulting economic slow -down. With the heightened 
uncertainty, there is a greater emphasis on the importance of the multilateral system and 
international cooperation.  
6.2.  Core principles of the WTO, such as market opening and transparency, have helped minimize 
export restrictions and enhance predictability of trade so that trade can continue to flow smoothly. 
In addition, through cooperation with ot her international organizations, such as the WHO and WIPO, 
the WTO will continue to work to promote vaccine production and ensure fair access thereto.  
6.3.  Being at the core of the multilateral trade system, the WTO will continue to respond to similar 
health crises and changing environments of economy and trade in the coming years. To this end, 
the WTO needs to grow as a more appropriate and effective organization keeping pace with the 
rapidly changing trade environment. Korea will continue to actively participate in the ongoing 
discussions for WTO reform and make efforts to bolster global confidence in the multilateral system.  
6.4.  As part of such effort, Korea will continue to faithfully implement its international obligations 
in compliance with the WTO Agr eements as one of its members and actively engage in discussions 
on new trade topics , including trade and health issues,  climate and environmental issues as well as 
the rules of digital trade rules in light of the accelerating pace of the digital transform ation of the 
global economy.  
6.5.  Korea's experience of transforming from an aid -recipient country to a donor country is all the 
more encouraging as it shows a virtuous circle of the multilateral system, where growth and 
development of one country can contribu te to the development of other countries.  WT/TPR/G/414 /Rev.1  • Republic of Korea  
 
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  6.6.  Going forward, Korea will continue to seek effective domestic markets and sustainable 
development based on "innovation and inclusive growth " and make constructive contributions as a 
responsible member of the inter national community through its contribution to global economic 
growth with its robust trade activities.  
 
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