WT/REG311/3  
 
29 April 2019  
(19-2893) Page: 1/2 
Committee on Regional Trade Agreements  Original: English  
 
  
FREE TRADE AGREEMENT  BETWEEN THE UNITED STATES AND TH E REPUBLIC OF KOREA  
(GOODS AND SERVICES)  
QUESTIONS AND REPLIE S 
 The following communication, dated 25 April 2019, is being circulated at the request of 
the delegations of the United States and the Republic of Korea.  
 
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This document reproduces the question s addressed to the Parties following the  submission of 
the notification of changes affecting the implementation of this Agreement ( WT/REG311/N/1/A dd.1 
and S/C/N/621/A dd.1) and the re sponses submitted.  
Question s from the delegation of the European Union  
 
1.1.  We look forward to receiving more detailed information on what improvements have 
been agreed on customs origin verification, and how they will be implemented in practice.  
 
Response from the delegation of the Republic of Korea  
 
By the Exchange  of Letters  between the two countries, the Republic of Korea and the United  
States of America confirmed their commitment to the Customs Principles under the Korea -US FTA 
and agreed to es tablish the Rules of Origin Verification Working Group under the Committee on 
Trade in Goods.  
 
The Exchange of Letters  contains 8 detailed customs principles such as the reaffirmation of 
the commitment to the "knowledge -based " self-certification system and  the allowance of a C/O 
completed by an exporter or producer regardless of its location or address  if a good is originating in 
the territory of Korea or the U.S . It provides detailed directions on their commitment under the 
Korea -US FTA and Korea implement s it by amendments of related practical guidelines of Korea 
Customs Services . 
 
Response from the delegation of the United States  
 
The improvements related to customs origins verification can be found here: 
https://ustr.gov/sites/default/files/files/agreements/FTA/KORUS/KORUS%20Letter%20Exchange%
20-%20Customs%20 -%20Signed.pdf  
 
1.2.  We are interested in receiving more detailed information on the new investment 
provisions and what the changes will mean in practice.  
 
Response from the delegation of the Republic of Korea  
 
Korea and the U.S. have agreed to include new provisions aimed a t ensuring "frivolous claims 
are deterred ", preventing parallel claims from being filed and clarifying investment rules such as NT, 
MFN, MSOT and the definition of investor.  
 
The provisions included for clarity are as follows:  
 WT/REG311/3  
 
- 2 - 
 
  1. "For greater certainty, whether treatment is accorded in "like circumstances " under 
Article  11.3 (NT)  or Article 11.4  (MFN) depends on the totality of the circumstances, including 
whether the relevant treatment distinguishes between investors or investments on the basis 
of legitimate public welfare objectives. "; 
  
2. "For greater certainty, the treatment referred to in this Article  (MFN) does not encompass 
international dispute resolution procedures or mechanisms, such as those included in 
Section  B."; 
 
3. "For greater cert ainty, the mere fact that a Party takes or fails to take an action that may 
be inconsistent with an investor 's expectations does not constitute a breach of this Article  
(MSOT), even if there is loss or damage to the covered investment as a result. "; and  
  
4. "For greater certainty, the Parties understand that, for purposes of the definitions of 
"investor of a non -Party" and "investor of a Party, " an investor "attempts to make " an 
investment when that investor has taken concrete action or actions to make an investment, 
such as channeling resources or capital in order to set up a business, or applying for a permit 
or license. ". 
 
Response from the delegation of the United States  
 
The changes to investment -related provisions (Chapter Eleven starts on page 2) can  be 
found here:  https://ustr.gov/trade -agreements/free -trade -agreements/korus -fta/september -2018-
korus -amendment -and-modificat ion. The updated KORUS Investment Chapter, reflecting the 
modifications that entered into force on 1 January, can be found on the USTR website here: 
https://ustr.gov/sites/default/files/uploads/agreements/fta/korus/Chapter_Eleven_Investment.pdf   
 
1.3.  Bearing in mind the ongoing Section 232 investigation on cars, we would be  
interested in knowing what will take precedence: bilateral trade deals or the outcome of 
the investigation?  
Response from the delegation of the Republic of Korea  
 
The amended KORUS FTA already came into effect at the start of this year.   
Response from the delegation of the United States  
 
The U.S. Department of Commerce has submitted  to the President its report on its Section  232 
investigation into the effect of automotive imports on the national security of the United States.  The 
President is reviewing the analysis and will determine any measures to be taken pursuant to Section 
232. 
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