WT/REG4 31/2 
 
16 September  2022 
(22-6752) Page: 1/6 
Committee on Regional Trade Agreements  Original: English  
 
FREE TRADE AGREEMENT BETWEEN THE UNITED KINGDOM  AND THE  
REPUBLIC OF KOREA   
QUESTIONS AND REPLIES  
 The following communication, dated 16 September  2022, is being circulated at the request of 
the delegations of  the United Kingdom and the Republic of Korea.  
 
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Questions from Brazil  
 
1.1.  Concerning paragraph 3.20, could the parties please confirm which, if any, are the 
outward processing zones in the Korean Peninsula where materials can be processed and 
subsequently re -imported retaining their originating status, as well as which materials 
receive this specific treatment? Also, could the parties please clarify if there is any 
meeting of the Committee currently scheduled?  
Response from the United Kingdom  
 
 There are currently no outward processing zones in the Korean Peninsula where materials can 
be processed and subsequently re -imported retaining their originating status. There are no meetings 
of the Committee currently scheduled.  
 
Response  from the Republic of Korea  
 
 The outward processing zone in the Korea Peninsula refers to the Gaeseong Industrial Complex 
(GIC) located in North Korea. Provision on GIC aims to enhance intra -Korean cooperation which can 
further promote peace and mutual pr osperity in the Korean peninsula. GIC was shut down in 
February 2016 due to North Korea 's missile launch.  
 
 As the GIC is currently not in operation, there is no meeting planned for the time being.  
 
1.2.  Regarding bilateral safeguards, paragraph 3.26 of the r eport indicates that the surge 
must be the result of the tariff liberalization. Could the parties indicate how the causal 
link between these two elements is determined?  
Response from the United Kingdom  
 
 The Party seeking to impose a measure can use its di scretion in identifying a causal link 
between increased imports (as a result of tariff liberali zation) and serious injury or threat thereof.  
 
Response  from the Republic of Korea  
 
 According  to the Article  of the Agreement,  an impose  of a bilateral  safeguard  measure  requires  
increased  imports  of a good as a result  of the reduction  or elimination  of a customs  duty under  the 
agreement  and such imports  constitute  a cause  or a threat to cause serious  injury  to a domestic  
industry  producing  a like or directly  competitive  good.   
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   The investigating  authority  may determine  whether  the causal  link is established  between  the 
tariff reduction  or elimination  and the increase  of the imports,  by examining  any patterns  or trends  
in sales volume  of both the imported  good and the domestic  like or directly  competitive  good.  Time-
series  analysis  may be used to see if there  is sufficient  evidence  to decide  the tariff liberalization  has 
led to the increase  of the imports.   
 
1.3.  Regarding bilateral agricultural safeguards (paragraph 3.28 of the report) why there 
are no price triggers? Also, could the Parties please elaborate more on the transition 
period for maintaining these measures? For example, what is the duration and how it was 
agreed upon?  
Response from the United Kingdom  
 
 The UK -South Korea Free Trade Agreement (FTA) is a continuation of the EU -South Korea 
FTA. As such the bilateral agricultural safeguard measures are a replication of the safeguards 
established under that agreement and are measured in metric tonnage for consistency.  The 
transition period for these measures varies and is dependent on the agricultural product concerned. 
The transition periods can last up to 25 years with the last applicable year beginning on 1 July 2035.  
 
Response from the Republic of Korea  
 
 The Korea -UK FTA was signed with the aim of ensuring stable bilateral trade relations in 
response to Brexit. Most provisions of the Korea -UK FTA are in line with the Korea -EU FTA.  As the 
trigger level of the Korea -EU FTA i s established on the basis of the aggregate volume of imports, the 
Korea -UK FTA also sets the volume -based trigger level.  
 
 The subject goods (9 agricultural goods) and the implementation period (12~25 years)* of 
the Korea -UK FTA are equivalent to those se t out in the Korea -EU FTA . 
 
 * We understand that transition period refers to implementation period.  
 
 Though Agricultural Safeguard Measures of the Korea -UK FTA are in line with the Korea -EU 
FTA, its trigger level is lowered compared to that of the Korea -EU FTA, considering the difference in 
the aggregate volume of imports.  
 
1.4.  Could the parties please explain why the dispute settlement provisions inscribed 
under Chapter 14 are not applicable to Chapter 5 (SPS) of the Agreement? What kind of 
mechanism to sol ve problems on SPS related to the implementation of the agreement and 
remedies are foreseen by the Parties?  
Response from the United Kingdom  
 
 The purpose of the UK -South Korea FTA is to maintain continuity of the effects of the EU -
South Korea FTA in a bil ateral context. The UK -South Korea FTA replicates all sections of the existing 
EU-South FTA relevant for a bilateral agreement between the UK and Republic of Korea. As a result, 
the existing structure of SPS provisions have not been altered. The Agreement provides for a forum 
for discussion between the parties on matters of SPS implementation.  
 
Response from the Republic of Korea  
 
 As stipulated in Article 5.11. of the Korea -UK FTA, neither party may have recourse to Chapter 
14 (Dispute Settlement) for any matter arising under the Chapter 5 (Sanitary and Phytosanitary 
Measures). The SPS -related issues can be solved through technical consultations among the SPS 
experts of relevant Parties. WTO dispute settlement mechanism is more objective and receptive to 
domestic stakeholders.  
 
Questions from Canada  
 
1.5.  Paragraph 4.2. of the factual presentation states: "The Parties reaffirm their right s 
and obligations under the WTO Agreement (Article 7.1). Chapter 7 does not apply to 
subsidies or grants provided by a Party, to measures affecting natural persons seeking 
access to the employment market of a Party, to measures regarding citizenship, resid ence WT/REG4 31/2 
 
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  or employment on a permanent basis. Nothing in the Chapter shall be construed to impose 
any obligation with respect to government procurement."  
 Does this chapter apply to sub central governments?  
 
Response from the United Kingdom  
 
 Chapter 7 applies to measures adopted or maintained by central, regional or local 
governments and authorities, as well as by non -governmental bodies in the exercise of powers 
delegated by central, regional or local governments or authorities (per Article 7.2(b)).  
 
Response from the Republic of Korea  
 
 Chapter 7 of the Korea -UK FTA is applied to measures of the Parties. According to Article 7.2, 
'measures adopted of maintained by a Party' is defined as measures taken by (i) central, regional, 
or local governments and authorities, and (ii) non -governmental bodies in the exercise of powers 
delegated by central, regional or local governments or authorities.  
 
1.6.  Paragraph 4.4. of the factual presentation states: "The Agreement does not contain 
a specific provision on denial o f benefits but, as customary in trade agreements of the EU, 
a Party may deny the benefits of Chapter 7 to a juridical person, registered in the UK or 
in Korea, if it does not engage in substantive business operations (Article 7.2)."  
 Can the Parties confirm if this only applies to juridical persons of the parties or does 
this also apply to juridical persons of a third party?  
 
Joint r esponse from the Parties  
 
 The benefits conferred by Chapter 7 may be denied if a juridical person does not meet the 
test of conducting 'substantive business operation' in the territory of a Party that is required for 
them to be regarded as a "juridical person of a party" in Article 7.2(f)) and benefit from the rights 
under the agreement. It is the consistent treaty practic e of the UK  and Korea  that an enterprise shall 
be deemed to be 'of a Party' if they carry out substantive business activities / operations in the 
territory of the contracting Parties.  
 
1.7.  Paragraph 4.16 of the factual presentation states: "Under the Agreement , Korea 
maintains a different set of horizontal limitations on market access for mode 3 with 
respect to i) the acquisition of outstanding stocks of existing domestic companies in areas 
such as energy and aviation, ii) the transfer of equity interests or as sets held by state 
enterprises or governmental authorities and the privatization of services provided in the 
exercise of governmental authority, iii) the rights or preferences granted to socially or 
economically disadvantaged groups and iv) measures relate d to state -owned electronic 
information systems. Horizontal limitations on national treatment are also maintained for 
measures with respect to i) the acquisition of arms (for modes 1, 2 and 3), ii) the export 
of controlled commodities, software, and techno logy (for modes 1 and 2) and iii) the 
acquisition of land in certain situations (for mode 3). Horizontal limitations are also 
registered for mode 4."  
 Can Korea please explain in what regard these horizontal commitments differ from 
its GATS horizontal comm itments? Does this reflect changes in Korea 's domestic regime?  
 
Response from the Republic of Korea  
 
 Korea's horizontal commitments from GATS and the Korea -UK FTA each reflect Korea's 
domestic regime at the time when the commitments were made. In other wo rds, the differences in 
these commitments reflect changes in Korea's domestic regime.  
 
1.8.  Paragraph 4.46 of the factual presentation states: "The Agreement requests the 
Parties to encourage their relevant national representative professional bodies to jointl y 
develop and provide recommendations to the Trade Committee on mutual recognition 
(Article 7.21). If the recommendation is consistent with the Agreement and there is a 
sufficient level of correspondence between the Parties' relevant regulations, they shal l, WT/REG4 31/2 
 
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  through their competent authorities, negotiate an agreement on mutual recognition 
(MRA) of requirements, qualifications, licences and other regulations. The Agreement also 
establishes a Working Group on MRAs to consider mutual recognition -related matter s and 
act as a contact point for issues relating to mutual recognition raised by relevant 
representative bodies in either Party."  
 Can the Parties explain the difference between the Working Group on MRAs and the 
Trade Committee on Mutual Recognition given that recognition remains contingent on 
correspondence between the Parties ' relevant regulatory bodies? Is this done for 
transparency reasons?  
 
Response from the United Kingdom  
 
 For clarity, there is no specific "Trade Committee on mutual recognition " established in this 
agreement. There is a Trade Committee and a Working Group on MRA established under the auspices 
of the Trade Committee " (Article 15.3.1).  
 
 As the factual presentation describes, the Trade Committee considers recommendatio ns on 
mutual recognition made by relevant representative professional bodies to determine whether they 
are consistent with the Agreement (Article 7.21(1) -(3)). If consistent, and if there is sufficient level 
of correspondence between the Parties ' relevant regulations, the Parties shall, through their 
competent authorities, negotiate an agreement on mutual recognition (MRA) of requirements, 
qualifications, licences and other regulations (Article 7.21(4)).  
 
 According to Article 7.21.6 the Working Group on MR A's function is to facilitate the Trade 
Committee 's work in considering recommendations on mutual recognition. This includes by providing 
a contact point for relevant representative bodies and through developing procedures to encourage 
relevant representat ive bodies to make representations on mutual recognition 
(Article  7.21(6)(a) -(b). 
 
Response from the Republic of Korea  
 
 The Trade Committee is established under Article 15.1 of the Korea -UK FTA, and is responsible 
for supervising the implementation and ap plication of the Agreement.  
 
 The Working Group on MRA is established under Article 15.3, in accordance with Article 7.21.6. 
It was established in order to ensure sufficient discussions on MRA, and functions as a contact point 
for issues related to mutual  recognition.  
 
1.9.  Article 7.20.2 of the Agreement states: "No later than two years after the conclusion 
of the negotiations pursuant to Article XIX of GATS and to the Ministerial Declaration of 
the WTO Ministerial Conference adopted on 14 November 2001, the Trade Committee shall 
adopt a decision containing a list of commitments concerning the access of contractual 
service suppliers and independent professionals of a Party to the territory of the other 
Party. Taking into account the results of those GATS negot iations, the commitments shall 
be mutually beneficial and commercially meaningful.  
 Can the Parties please describe how it will assess market access commitments for 
contractual services suppliers and independent professionals to be "commercially 
meaningful ." For example, would this criterion require additional market access for 
contractual service suppliers and independent professionals than will have been provided 
by the GATS negotiations?  
 
Joint r esponse from the Parties  
 
 Article 7.20(2) reaffirms the co mmitments made by the Parties under GATS with regards to 
contractual service suppliers and independent professionals whilst noting the role of the Trade 
Committee to explore liberalisation beyond GATS. As it stands, no further liberalisation has been 
agree d. WT/REG4 31/2 
 
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  Questions from the United States1 
 
Environment and labour  
 
1.10.   Paragraph 5.38 states that "Chapter 13 of this agreement applies to measures 
adopted or maintained by the Parties affecting trade -related aspects of labo ur and 
environmental issues (Article 13.2). The Parties stress that labo ur and environmental 
standards should not be used for protectionist purposes. Articles 13.3, 13.4 and 13.5 
recognize the Parties' right to regulate and establish levels of labor and environmental 
protection and the value of international co -operation and agreement on employment and 
labor affairs … They commit to upholding levels of labor and environmental protection in 
the application and enforcement of laws, regulations or standards (Article 13.7)."  
 Would the Parties to this agreement please explain the importance and rationale for 
including such language in this bilateral agreement?  
 
Response from the United Kingdom  
 
 Bilateral trade agreements are an important driver for sustainable growth both in the UK and 
in partner countries. UK citizens rightly expect that UK trade agreements wit h our international 
partners should support workers' rights, environmental and climate objectives. Environment, 
Climate and Labour are key objectives for UK trade policy, and the UK is therefore committed to 
including Environment, Climate, Labour and Susta inability provisions in free trade agreements such 
as this one.  
 
Response from the Republic of Korea  
 
 The text is to prohibit an impact on trade and investment that results from not having  
effectively enforced national environmental and labor laws, regulations, practices and policies.  In 
addition, it explicitly states that it should not be used for trade protectionist purposes to ensure to 
create a  virtuous cycle from export to production, to employment and to growth thr ough FTA.   
 
 The text is the same as Article 19.3 Application and Enforcement of Labor Laws of KOR -US 
FTA and it has the same importance  and rationale  as Article 20.3 Application and Enforcement of 
Environmental  Laws of KOR -US FTA.  
 
1.11.   Paragraph 5.40 states t hat "dispute settlement mechanism of the Agreement is not 
applicable to matters arising under the Chapter. Disputes on environmental issues shall 
be resolved only through Government consultations (Article 13.14), and a panel of 
experts, if the issue has no t been satisfactorily addressed through Government 
consultations (Article 13.15)."  
 Is there a mechanism in this agreement to address labo ur? If not, could the Parties 
please explain the rationale for excluding such a mechanism?  
Response from the United Ki ngdom  
 
 The Trade and Sustainable Development Chapter covers both trade -related aspects of labour 
and environmental issues.  Where a dispute arises on a matter of mutual interest under this Chapter, 
including on relevant labour matters, then Articles 13.14 and 13.15 apply. They provide for seeking 
a mutually satisfactory resolution of the matter through Government consultations, and, if the matter 
is not satisfactor ily resolved through this, then a panel of experts may be convened to consider the 
matter.  
 
Response from the Republic of Korea  
 
 The Chapter 13 (Trade and Sustainable Development) in the KOR -UK FTA addresses  both 
labor and environment. In Chapter 13, the Article 14 (Government Consultation) and the Article 15 
(A Panel of Experts) ap ply the same to labor and environment.  
 
1 Question s were submitted to the Parties on 29 August  2022 (three  week s, three  days 
before the meeting).  WT/REG4 31/2 
 
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  Government Procurement  
 
1.12.   Article IV:2 of the WTO GPA reads: "With respect to any measure regarding covered 
procurement, a Party, including its procuring entities, shall not: a) treat a locally 
established supplier less favorably than another locally established supplier on the bas is 
of the degree of foreign affiliation or ownership; or b) discriminate against a locally 
established supplier on the basis that the goods or services offered by that supplier for a 
particular procurement are goods or services of any other Party." It seem s an important 
guarantee against discrimination in government procurement. The United States includes 
this language in USMCA .  
 Could the authorities provide the rationale for not including Article IV:2 of the WTO 
GPA in the Government Procurement chapter of the FTA?  
Response from the United Kingdom  
 
 The EU and Korea began their negotiations for the EU -Korea FTA in 2007, the agreement was 
then signed in 2009 and provisionally applied from 2011 before entering into force in 2015. During 
this period, the Go vernment Procurement Agreement 1994 was renegotiated and became the 
Government Procurement Agreement 2012, however it was the Government Procurement 
Agreement of 1994 that was  referenced in the EU -Korea FTA.  
 
 The UK -Korea FTA retain s the commitments on public procurement that were set out in the 
EU-Korea FTA that are based on the EU 's 1994 Government Procurement Agreement schedules. 
Article 9 in the UK -Korea FTA states that the procurement covered by the agreement will be all 
procurem ent covered by the WTO 's' Government Procurement Agreement 1994 including their 
amendments or replacements. This should be  interpreted to include the revised GPA as agreed in 
2012.  
 
Response from the Republic of Korea  
 
 The Government Procurement Chapter o f Free Trade Agreement between the United Kingdom 
and the Republic of Korea was adapted to the same text of Free Trade Agreement between EU and 
the Republic of Korea, for continuity and to avoid the cliff edge of trade since The UK left the EU.  
 
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