WT/REG452/1 /Rev.1  
17 Octobe r 2022 
(22-7806) Page: 1/78 
Committee on Regional Trade Agreements    
 
FACTUAL PRESENTATION  
FREE TRADE AGREEMENT  BETWEEN THE REPUBLIC OF KOREA  AND  
THE REPUBLICS OF CENTRAL AMERICA  
(GOODS AND SERVICES ) 
Report by the Secretariat  
Revision  
This report, prepared for the consideration of the Free Trade Agreement  between the 
Republic of Korea  and the Republics of Central America , has been drawn up by the WTO 
Secretariat on its own responsibility and in full consultation with the Parties. The fa ctual 
presentation reproduces as closely as possible the terminology used in the Agreement 
and in the comments provided and does not imply official endorsement or acceptance 
by the Secretariat of such terminology. The report has been drawn up in accordance  
with the rules and procedures contained in the Decision for a Transparency Mechanism 
for Regional Trade Agreements (WT/L/671) and thus does not imply any value 
judgement by the Secretariat regarding the contents of the Agreement.  
Any technical questions a rising from this report may be addressed to Maria Donner 
Abreu (tel: +41 22 739 5244) . Any statistical questions arising from this report may be 
addressed to Rowena Cabos (tel: +41 22 739 5185).  
 
  WT/REG452/1 /Rev.1  
 
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  Table of Contents  
Page 
1   TRADE ENVIRONMENT  ................................ ................................ ................................ . 4 
1.1   Merchandise trade  ................................ ................................ ................................ ....... 4 
1.2   Trade in services and investment  ................................ ................................ ..................  6 
2   CHARAC TERISTIC ELEMENTS OF THE AGREEMENT  ................................ ......................  8 
2.1   Background information  ................................ ................................ ...............................  8 
3   PROVISIONS ON TRADE IN GOODS  ................................ ................................ .............  9 
3.1   Import duties and charges, and quantitative restrictions ................................ .................. 10 
3.1.1    General provisions  ................................ ................................ ................................ ...10 
3.1.2    Liberalization of trade and tariff lines  ................................ ................................ ......... 11 
3.1.3    Liberalization schedule  ................................ ................................ ............................. 14 
3.1.3.1    Korea  ................................ ................................ ................................ .................. 14 
3.1.3.2    Central American countries  ................................ ................................ .................... 16 
3.1.4    Tariff rate quotas  ................................ ................................ ................................ .....20 
3.2   Rules of origin  ................................ ................................ ................................ ............ 20 
3.3   Export duties and charges, and quantitative restrictions  ................................ .................. 21 
3.4   Regulatory provisions on trade in goods  ................................ ................................ ........ 22 
3.4.1    Standards  ................................ ................................ ................................ ............... 22 
3.4.1.1   Sanitary and phytosanitary measures  ................................ ................................ ......22 
3.4.1.2    Technical barriers to trade  ................................ ................................ ..................... 22 
3.4.2    Safeguard mechanisms  ................................ ................................ ............................ 23 
3.4.2.1    Global safeguards  ................................ ................................ ................................ .23 
3.4.2.2    Bilateral safeguards  ................................ ................................ ............................... 23 
3.4.2.3    Balance -of-payments safeguards  ................................ ................................ ............ 24 
3.4.3    Anti-dumping and countervailing measures  ................................ ................................ .24 
3.4.4    Subsidies and state -aid ................................ ................................ ............................ 24 
3.4.5    Customs-related procedures ................................ ................................ ...................... 24 
3.5   Sector -specific provisions on trade in goods  ................................ ................................ ...26 
4   PROVISIONS ON TRADE IN SERVICES AND INVESTMENT  ................................ .........  26 
4.1   Scope and definitions  ................................ ................................ ................................ ..26 
4.2   Denial of benefits  ................................ ................................ ................................ .......26 
4.3   General provisions on trade in services and investment  ................................ ................... 26 
4.3.1    Market access  ................................ ................................ ................................ ......... 26 
4.3.2    National and MFN treatment  ................................ ................................ ...................... 27 
4.3.3    Commercial presence  ................................ ................................ ............................... 27 
4.3.4    Performance requirements  ................................ ................................ ........................ 27 
4.3.5    Senior Management and Boards of Directors  ................................ ............................... 28 
4.3.6    Movement of natural persons  ................................ ................................ .................... 28 
4.3.7    Other measures on Investment  ................................ ................................ ................. 29 
4.4   Liberalization commitments  ................................ ................................ ......................... 29 WT/REG452/1 /Rev.1  
 
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  4.4.1    Korea  ................................ ................................ ................................ ..................... 30 
4.4.2    Central American Parties  ................................ ................................ .......................... 34 
4.4.2.1    Costa Rica  ................................ ................................ ................................ ............ 34 
4.4.2.2    El Salvador ................................ ................................ ................................ ........... 38 
4.4.2.3    Honduras  ................................ ................................ ................................ ............. 41 
4.4.2.4    Nicaragua  ................................ ................................ ................................ ............ 45 
4.4.2.5    Panama  ................................ ................................ ................................ ............... 48 
4.5   Regulatory provisions  ................................ ................................ ................................ ..51 
4.5.1    Domestic regulation  ................................ ................................ ................................ .51 
4.5.2    Recognition  ................................ ................................ ................................ ............. 51 
4.5.3    Subsidies  ................................ ................................ ................................ ................ 52 
4.5.4    Safeguards  ................................ ................................ ................................ ............. 52 
4.6   Sector specific provisions on trade in services  ................................ ................................ 52 
4.6.1    Financial services  ................................ ................................ ................................ .....52 
4.6.2    Telecommunications  ................................ ................................ ................................ .53 
5   GENERAL PROVISIONS OF THE AGREEMENT  ................................ .............................  54 
5.1   Transparency  ................................ ................................ ................................ ............. 54 
5.2   Current payments and capital movements  ................................ ................................ .....54 
5.3   Exceptions  ................................ ................................ ................................ ................. 54 
5.3.1    General exceptions  ................................ ................................ ................................ ..54 
5.3.2    Essential security exceptions  ................................ ................................ ..................... 54 
5.3.3    Taxation  ................................ ................................ ................................ ................. 55 
5.4   Access ion and withdrawal  ................................ ................................ ............................ 55 
5.5   Institutional framework  ................................ ................................ ............................... 55 
5.6   Dispute settlement  ................................ ................................ ................................ .....55 
5.7   Relationship with other agreements concluded  by the parties  ................................ ........... 56 
5.8   Government procurement  ................................ ................................ ............................ 59 
5.9   Intellectual property rights  ................................ ................................ .......................... 60 
5.10   Competition  ................................ ................................ ................................ ............. 61 
5.10.1    State -owned enterprises (SOEs) and designated monopolies  ................................ .......61 
5.11   Environment  ................................ ................................ ................................ ............ 62 
5.12   Labour  ................................ ................................ ................................ .................... 62 
5.13   Electronic commerce  ................................ ................................ ................................ .63 
5.14   Small and medium -sized enterprises  ................................ ................................ ........... 63 
5.15   Cooperation  ................................ ................................ ................................ ............. 63 
ANNEX 1  ................................ ................................ ................................ ........................  65 
 
  WT/REG452/1 /Rev.1  
 
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  Key Facts  
 
Parties to the Agreement   Republic of Korea1 and  
  Costa Rica, El Salvador, Honduras,  
  Nicaragua and Panama (the Republics 
  of Central America ) 
 
Date of Signature    21 February 2018  
  
Date of Entry into Force  Honduras -Korea and   
    Nicaragua -Korea : 1 October 2019  
     Costa Rica -Korea : 1 November 2019  
     El Salvador -Korea : 1 January 2020  
     Panama -Korea : 1 March 2021  
 
Date of Notification:   15 April 202 1 
 
Full implementation   1 January 2039  
 
 
1  TRADE ENVIRONMENT2 
1.1.  In 2020, the collective GDP of the five Central American Parties – Costa Rica, El Salvador, 
Honduras, Nicaragua and Panama3 - totalled USD 174.8 billion and that of Korea USD 1,63 0.9 billion.   
1.1  Merchandise trade  
1.2.  In 2020, world trade rankings place Korea  as 6th largest importer and exporter (excluding intra -
EU trade) ; collectively, Central American countries4 are the 29th largest importer and the 36th largest 
exporter . Imports of all the Parties were dominated by manufacturing – 60% for Korea  and between 
74% (Costa Rica) and 65% (El  Salvador and Panama)  for Central American countries. Manufacturing 
also accounted for the vast majority of Korea's  exports ( 87%) and that of four Central American 
countries – 78% for Panama, 76% for El Salvador, 59% for Honduras and 56% for Costa Rica. A t 
47%, ag ricultural products dominated the  exports of Nicaragua. In 20 19, Korean figures place 
Central America as its 26th largest export market and its 45th largest supplier of imports. In turn, 
Korea  ranked between the 5th and 22nd largest export market f or the Central American countries and 
between  the 9th and the 15th largest  source  of imports.  
1.3.  Chart 1.1 presents the trends in global and intra -Party merchandise trade between 2011 and 
2020. Over the period, the overall balance of Korea's global trade showed a constant trade surplus . 
Central American countries experienced a trade deficit throughout the period. Figures on bilateral 
trade show a constant trade  surplus in favour of Korea.  Korea's trade both with the world and 
bilaterally has b een decreasing since 2019, w ith the exception of 2020 bilateral imports  – and that  
despite the COVID -19 pandemic . Central American figures show a decreasing trend from either 2018 
or 2019; however, exports to Korea have increased  since 2016.  
 
1 Hereinafter referred to as "Korea".  
2 Statistics from Comtrade ; data on GDP and breakdown by category sourced from WTO Trade Profile s 
2021.  Trade data on the basis of EU(28) . 
3 Central American countries normally include Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua 
and Panama . However, since Guatemala is not a Party to  the Agreement, in this document all references to 
"Central America" only include the other five countries.  
4 2019 is the latest year for which figures from the same sourc e – i.e. Comtrade – are available.  WT/REG452/1 /Rev.1  
 
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  Chart 1.1 Korea -Central America (Costa Rica, El Salvador, Honduras, Nicaragua, 
Panama):  Merchandise bilateral and global trade, 2011 -2020  
 
Source:  Based on data provided from the UNSD, Comtrade  database and Panama (INEC).  
 
Chart 1.2 Korea -Central America:  Product composition of merchandise trade by HS 
Section, annual average (2016 -2018)  
 
Source:  Panama's Instituto Nacional de Estadística y Censo (I NEC) and UNSD, Comtrade database.  
0123456789
0102030405060708090
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020B. Central America
(USD B illions)
Imports from Korea (Right Axis)
Exports to Korea (Right Axis)
Total Imports
Total Exports
0123456789
0100200300400500600700800900
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020A. Korea
(USD Billions)
Imports from Central America (Right Axis)
Exports to Central America (Right Axis)
Total Imports
Total Exports
11
8
12
481110Korea's imports from Central America 
(%)
27
9
829517Korea's Global Imports (%)
7
21
12
51681120Central America's Global Exports (%)
0
8
15
10
5
5
8191218Central America's imports from Korea 
(%)
8
12
13
7
8817719Central America's Global Imports (%)
7
8
7
0
9
4117527Korea's Global Exports (%)Total: USD 450 million Total: USD 473 billion
Total: USD 43 billion Total: USD 558 billionTotal:  USD 27 billion
Total: USD 13 billion
OtherPrepared foodsVegetablesLive animals, 
animal products
PlasticsChemicalsMinerals
MachineryBase metalsTextiles
OpticalVehicles, shipsWT/REG452/1 /Rev.1  
 
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  1.4.  Chart 1.2 shows the commodity structure of trade between Korea and Central American 
countries, as well as of their global trade , in the period 2016 -2018 on the basis of Harmonized 
System (HS)  Sections . Of the three main global exports by Korea (accounting for 67% of its exports), 
two –machinery and vehicles - were also among the top three imports by Central America from 
Korea (acco unting for 31% of bilateral imports). Almost half of Korea's imports from Central 
American countries concern ships from Chapter 89  (vehicles, s hips in the chart ); globally, these 
exports are however negligible for Central American Parties overall . Machiner y and vegetables, of 
great export interest to Central America globally, complete the top three imports into Korea from 
these countries.   
1.2  Trade in services and investment  
1.5.  In 2020 Korea was the world's 8th largest exporter and importer of commercial services  
(excluding intra -EU trade) while collectively Central America ranked 22nd for exports and 34th for 
imports.  
1.6.  Chart 1. 3 depicts Korea 's and Central America's global trade in commercial services during 
2011-2020. In 20 20, Korea's  global exports amounted to USD 89.4 billion while its global imports 
were USD 104.9 billion. Throughout this period Korea  has been a net importer of services from the 
world. Conversely, Central America n has constantly been a net services exporter, with 20 20 exports 
reaching USD 20.2 billion and imports USD 10.3 billion .  
Chart 1.3 Korea and Central America:  Global trade in commercial services, 201 1-2020  
 
Source:  WTO Statistics database, and Korean and Central  American authorities.  
 
1.7.  Chart 1.4 presents the Parties' global services trade broken down by services sectors, in the 
period 2016 -2018. For Korea, other business services and transport account  for the largest 
categories of traded service , while for Central  American countries transport services and travel are 
the top two traded services.  
-50-30-101030507090110130150
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Import Export Trade balance05101520253035404550
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Central America 
(USD Billion)Korea 
(USD Billion)WT/REG452/1 /Rev.1  
 
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  Chart 1.4 Korea and Central America: Top commercial services trade with world, by 
category (Average 2016 -2018)  
 
 
Source:  WTO Statistics Database and data submitted by the Korean authorities . 
 
1.8.  Chart 1. 5 shows Korea 's foreign direct investment (FDI) , both bilaterally and  with the world , 
for the most  recent years for which data is available. Bilaterally, with the excep tion of FDI from  
Panama  in 2018 , only outward flo ws were registered, to different countries . Globally, Korea has 
been a net source of FDI, with outward flows represent ing on average more than three times the 
amount of inward flows. Accordingly, outward stocks have constantly increased during this period . 
Chart 1.5 Korea: FDI stock and flow with Central America and world  
 
Note:  Bilateral  data on stock of FDI is not available.  
 Inward flow (2017) into Panama. Outward flow to Costa Rica, Honduras and Nicaragua, 2016 -2018; 
El Salvador 2018; Panama 2018 -2020.  
Source:  UNCTAD and Korean authorities (bilateral and global from 2016 onwards).  
0 10 20 30 40Other business servicesTransportTravelOthersKorea 
(USD Billion)
Import Export0 2 4 6 8 10 12Other business servicesTransportTravelOthersCentral America 
(USD Billion)
Import Export
050100150200250300350400
2015 2016 2017 2018 2019 2020FDI stock with world
(USD Billion )
051015202530354045
2015 2016 2017 2018 2019 2020FDI flow with world
(USD Billion ) FDI Flow with Central America (USD Million) 
WT/REG452/1 /Rev.1  
 
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  1.9.  Chart 1.6 shows that Central America has remained a net recipient of FDI stocks and flows 
from the world over the period 201 5-2020. Outward FDI flows were n egative  both globally and 
bilaterally in 2018 and 2019.  
Chart 1.6 Central America: FDI stock and flow with Korea and world  
 
Note:  In 2016 -2018, bilateral FDI concerned Costa Rica, Honduras ; in 2017-2019, El Salvador ; and in 
2018-2020, Panama.  
Source:  UNCTAD and Central American authorities.  
 
2  CHARACTERISTIC ELEMENTS OF THE AGREEMENT  
2.1.  The Agreement regulates trade between Korea on one side and each of the five Central America 
Parties on the other side, but not the trade among themselves (Article 1.5).  
2.1  Background information  
2.2.  Negotiations for the conclusion of a free trade agreement betw een the six Central American 
countries (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) and Korea were 
launched in June 2015. Guatemala , which had  stepped out during negotiations , has requested the 
resumption of the negotiations  on the occasion of the entry into force of the Agreement for all 
Parties.  As of June 2022 , discussion for the negotiations is being kept on bilaterally.  
2.3.  The Free Trade Agreement (hereafter the "Agreement") involving five Central American Parties 
and Korea was signed on 21 February 2018  and entered into force (bilaterally)  between October 
2019 and March 2021 . The Agreement was notified to the WTO on 15 April 2021 under 
Article  XXIV:7(a) of the GATT 1994 for its goods aspects, and Article V of the GATS for its se rvices 
aspects (WT/REG452/N/1 -S/C/N/1054). The Parties stated that the Agreement "establishes a free 
trade area for trade in goods and services within the meaning of GATT 1994 Article XXIV and GATS 
Article V." The text of the Agreement is available at:  
-150-100-50050100150
2016 2017 2018 2019FDI stock with Korea
(USD Million ) 
-20020406080100120
2016 2017 2018 2019FDI flow with Korea
(USD Million) 
020406080100120140
2015 2016 2017 2018 2019 2020FDI stock with world
(USD Billion )
Outward-2024681012
2015 2016 2017 2018 2019 2020FDI flow with world
(USD Billion ) 
InwardWT/REG452/1 /Rev.1  
 
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  • Republic of Korea: https://www.fta.go.kr/main/situation/kfta/lov5/c_america/1/  
• Costa Rica: http://www.comex. go.cr/tratados/corea/texto -del-tratado -1/ 
• El Salvador:  http://infotrade.minec.gob.sv/corea/textos -en-idioma -en-espanol/  
• Nicaragua: https://www.mific.gob.ni/Comercio -Exterior/Negociaciones -
Comerciales/Acuerdos -Comerciales -Internacionales -Vigentes/Centroamérica -Corea  
• Honduras:  https://sde.gob.hn/2017/08/17/tlc -korea/  
• Panama:  https://mici.gob.pa/tratados -comerciales -vigentes/tratado -de-libre-comercio -
entre -la-republica -de-corea -y-las-republicas -de-centroamerica  
 
2.4.  The Agreement contains 24 Chapters and three Annexes. Box 2.1 provides the structure of the 
Agreement.  
Box 2.1 Korea -Central America Free Trade Agreement  
 
Preamble   
Chapter 1  Initial Provisions and General Definitions   
Chapter 2  National Treatment and Market Access for Goods   
Chapter 3  Rules of Origin and Origin Procedures   
Chapter 4  Customs Procedures and Trade Facilitation   
Chapter 5  Sanitary and Phytosanitary Measures   
Chapter 6  Technical Barriers to Trade   
Chapter 7  Trade Remedies   
Chapter 8  Government Procurement   
Chapter 9  Investment   
Chapter 10  Cross -border trade in services   
Chapter 11  Financial Services   
Chapter 12  Temporary Entry for Business Persons   
Chapter 13  Telecommunications   
Chapter 14  E-Commerce   
Chapter 15  Intellectual Property Rights   
Chapter 16  Labor   
Chapter 17  Environment   
Chapter 18  Transparency   
Chapter 19  Cooperation   
Chapter 20  Competition   
Chapter 21  Institutional Provisions   
Chapter 22  Dispute Settlement   
Chapter 23  Exceptions   
Chapter 24  Final Provisions   
Annexes   
Annex I  Non-Conforming Measures of Services and Investment  
Annex II  Non-Conforming Measures of Services and Investment  
Annex III  Non-Conforming Measures of Financial Services  
 
 
3  PROVISIONS ON TRADE IN GOODS  
3.1.  A number of the Agreement's disciplines on trade in goods are those of the WTO. That includes 
the valuation of goods in accordance with the Agreement on Customs Valuation (Article 3.3), state 
trading enterprises being governed by Article XVII of GATT 1994 , and other provisions referred to 
in the sections below . WT/REG452/1 /Rev.1  
 
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  3.2.  The Agreement creates a review mechanism whereby the Committee on Trade in Goods  
(established under Article 2.16)  is to review trade-related non -tariff measures  (Article 2.14) , 
preferably within one year from the Agreement's entry into force. The aim of such a review is to 
recommend alternative, and better trade facilitation measures ; if appropriate, its results shall be 
submitted to the Joint Committee for consideration and/or action . As of June 2022 , the Committee 
had not met.  
3.1  Import duties and charges, and quantitative restrictions  
3.1.1   General provisions  
3.3.  Tariffs  are reduced or eliminated (from the 2015 MFN rate) i n accordance with the Parties' 
Schedules ( Article 2.4 and Annex 2 -B) within a maximum trans ition period of 19 years. The first 
tariff reduction - on trade between Honduras -Korea and Nicaragua -Korea  - was implemented on 1 
October 2019. Tariff reductions are delayed by one year between  Korea and El Salvador  and by two 
years between  Panama and Korea. As from year two, reductions take place on 1 January of each 
year. 
3.4.  Tariff increases are not allowed. Parties may agree through consultations to accelerat e tariff 
elimination.  
3.5.  The GATT 1994 principles of na tional treatment and general prohibition of quantitative 
restriction s are incorporated into the Agreement , mutatis mutandis  (Article s 2.2 and 2.9 ). Exceptions 
to these obligations include price undertakings agreed in the context of anti -dumping or 
counterv ailing measures and those specified in Annex 2 -A – namely actions authorized by the WTO's 
Dispute Settlement Body (DSB) and the following Party - and product -specific import controls:  
a. Costa Rica: crude oil, its fuel, derivatives, asphalt and gasoline; ethan ol and crude rums ; 
b. El Salvador: arms and ammunition, parts, and accessories; motor vehicles, buses and 
trucks older than 8/10/15 years, respectively; sacks and bags made out of jute and other 
similar textile fibr es up to 2029 ; 
c. Honduras : arms and ammunition  and motor vehicles and buses older than 7/10 years, 
respectively;  
d. Nicaragua : motor vehicles older than seven years; and  
e. Panama : lottery tickets in official circulation; used vehicles; video and other games 
providing cash prizes . 
3.6.  Import licensing measures are to be applied in accordance with the Agreement on Import 
Licensing Procedures (Article 2.10). Existing import licensing procedures were to be notified 
promptly after the Agreement's entry into force. As of June 2022, notifications had not been made 
in the context of the Agreement; notifications in the WTO context are however available. New or 
modified procedures are to be published on the Internet if possible 30 days prior to their entry into 
force (21 days under the WTO).  
3.7.  The Agreement also include the following t wo provisions:  
a. the prohibition o n requir ing the use of a contractual distributor for engaging in import s. A 
requirement for the designation of an agent is however authorized (Article 2.9, paragraphs 
3-5); and  
b. no import licence can b e required in case of non-compliance with the licensing 
transparency obligations specified under 3.6.   above  (paragraph 3 of Article 2.10).  
3.8.  Also reflected in Art icle 2.9 is the GATT 1994 prohibition o n conditioning the granting of an 
import licens e on the fulfilment of a  performance  requirement .  WT/REG452/1 /Rev.1  
 
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  3.9.  Article VIII of the GATT 1994 is incorporated into the Agreement (Article 2.11); information on 
fees and charges impose d in relation to importation is to be made available through the Internet. 
Neither Party shall require consular transactions, including related fees and charges in connection 
with the importation of any good from the other Party.  
3.10.   There is a stand -still com mitment o n existing waivers o n customs duties when these are 
conditioned on the fulfilment of a performance requirement (Article 2.5). Honduras and Nicaragua 
are exempted from this obligation for such time as they are an Annex VII country for the purposes 
of the WTO Agreement on Subsidies and Countervailing Measures  (hereafter the "Subsidies 
Agreement" ); thereafter , any such measures are subject to Article 27.4 disciplines.5  
3.1.2   Liberalization of trade and tariff lines  
3.11.   Tariffs are eliminated or reduced in accordance with the Parties' schedules of liberalization 
contained in Annex 2-B, on the basis of 15 categories. Liberalization schedules differ for each 
bilateral relation ship. Transition periods  last 15 years for impor ts by El Salvador  from Korea ; 16 
years for Korea from El Salvador, Panama from Korea as well as for bilateral trade between Korea  
and Honduras ; and 19 years for Korea from Panama and for bilateral trade  between Korea  and Costa 
Rica and Korea  and Nicaragua . In addition , the later implementation of the Agreement by El Salvador 
and Panama delay s liberalization by one  year (El Salvador) or two (Panama).  
3.12.   In 20 19 and 2020 , Korea 's applied MFN tariff comprised 12,2346 lines at the ten-digit level , 
of which 88 lines were non -ad valorem  (mixed).  
3.13.   Prior to its entry into force bilaterally – either in 2019, 2020 or 2021 – 19.8% of Korea's tariff 
lines were duty -free on an MFN basis, accounting for imports ranging from 25.9% in the case of 
Honduras to 9 5.7% in the case of Panama  during the three -year period before the entry into force 
of the Agreement . Following the Agreement's entry into force, Korea liberalized around  7,300 lines 
(60%) for imports from  all Central American Parties , virtually harmoniz ing liberalization in terms of 
tariff lines . Ten years after entry into force, more than 90% of lines  are to be duty free . Following 
the end of the transition period – 2034 for imports from Honduras, 2035 for El Salvador, 2037 for 
Costa Rica and Nicaragua an d 2039 for Panama, between 4.2% and 4.6% of total lines will remain 
dutiable, accounting for a maximum of 0.2% of imports (Costa Rica and Panama).  
3.14.   Table 3.1 shows the  tariff elimination commitments by Korea  under the Agreement.  Prior to 
its entry into force bilaterally – either in 2019, 2020 or 2021 – 19.8% of Korea's tariff lines were 
duty-free on an MFN basis, accounting for imports ranging from 25.9% in the case of Honduras  to 
95.7% in the case of Panam a during the three -year period before the entry into force of the 
Agreement . Following the Agreement's entry into force, Korea  liberalized around  7,300 lines (60%) 
for imports from  all Central American Parties , virtually harmoniz ing liberalization in terms of tariff 
lines. Ten years after entry into force, more than 90% of lines  are to be duty free . Following the end 
of the transition period – 2034 for imports from Honduras, 2035 fo r El Salvador, 2037 for Costa Rica 
and Nicaragua and 2039 for Panama, between 4.2% and 4. 6% of total lines will remain dutiable, 
accounting for a maximum of 0 .2% of imports (Costa Rica and Panama) .  
Table 3.1 Korea: Tariff elimination commitments under the Agreement and 
corresponding average trade  
Duty 
phase
-out 
period  Korea's Imports from Central American Parties  
period  COSTA RICA  HONDURAS  NICARAGUA  
  (2016 – 2018, USD million)   
 Lines  Imports  Lines  Imports  Lines  Imports  
 No  %  Value  %  Value  %  Value  %  Value  %  Value  %  
2019 
(MFN)  2,427  19.8 108.4  67.9 2,427  19.8 12.2 25.9 2,427  19.8 7.9 60.0 
2019 7,302  59.7 40.4 25.3 7,310  59.8 34.2 72.5 7,294  59.6 4.5 34.1 
 
5 World Bank data shows a 2020 GDP per capita of USD 2,406 for Honduras and of 1,905 for Nicaragua.  
6 The number of lines increased in 2021 by 8 ad valorem  tariff lines.  WT/REG452/1 /Rev.1  
 
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  Duty 
phase
-out 
period  Korea's Imports from Central American Parties  
2021 154 1.3 1.6 1.0 153 1.3 0.6 1.2 167 1.4 0.6 4.5 
2023 583 4.8 3.4 2.1 576 4.7 0.0 0.0 580 4.7 0.1 0.5 
2025 140 1.1 4.5 2.8 134 1.1 0.1 0.3 134 1.1 0.0 0.0 
2027     1 0.0 0.0 0.0     
2028 431 3.5 0.7 0.5 421 3.4 0.0 0.0 441 3.6 0.0 0.3 
2030 462 3.8 0.0 0.0 465 3.8 0.0 0.0 465 3.8 0.0 0.0 
2033 148 1.2 0.3 0.2 152 1.2 0.0 0.0 147 1.2 0.0 0.0 
2034 44 0.4 0.0 0.0 38 0.3 0.0 0.0 62 0.5 0.0 0.0 
2037 1 0.0 0.0 0.0     3 0.0 0.1 0.4 
Remain 
dutiable  542 4.4 0.4 0.2 557 4.6 0.0 0.0 514 4.2 0.0 0.1 
TOTAL  12,23
4 100 159.7  100 12,234  100 47.1 100 12,234  100 13.2 100 
 EL SALVADOR  
(2017 – 2019, USD million)   PANAMA  
(2018 – 2020, USD million)  
2020 
(MFN)  2,427  19.8 14.4 51.9         
2020 7,308  59.7 11.7 42.3         
2021 
(MFN)          2,428  19.8 163.1  95.7 
2021         7,301  59.6 4.4 2.6 
2022 174 1.4 1.3 4.7         
2023         169 1.4 0.7 0.4 
2024 564 4.6 0.2 0.7         
2025         603 4.9 0.1 0.1 
2026 138 1.1 0.0 0.0         
2027         139 1.1 1.4 0.8 
2028 4 0.0 0.0 0.0         
2029 414 3.4 0.1 0.4         
2030 1 0.0 0.0 0.0     439 3.6 0.3 0.2 
2031 456 3.7 0.0 0.0         
2032         463 3.8 0.1 0.1 
2033 4 0.0 0.0 0.0         
2034 153 1.3 0.0 0.0         
2035 31 0.3 0.0 0.0     126 1.0 0.0 0.0 
2036         32 0.3 0.0 0.0 
2039         3 0.0 0.1 0.1 
Remain 
dutiable  560 4.6 0.0 0.0     539 4.4 0.3 0.2 
TOTAL  12,23
4 100 27.7 100     12,242  100 170.3  100 
Note:  Tariff lines subject to in -quota rates are excluded from the computation . For the calculation of 
averages, specific rates are excluded, and the ad valorem  parts of alternate rates are included.  
 Based on the HS 2017 nomenclature.  
Source:  WTO estimates based on data provided by the Korean authorities.  
 
3.15.   The MFN rates of the original members of the Central American Common Market (CACM) - 
Costa Rica, El Salvador, Honduras and Nicaragua – are mainly those of the CACM's common external 
tariff (CET); Panama, which joined the CACM later, has a larger number of exceptions to the CET . 
The liberalization commitments  in the Agreement  are specific to each of the four CACM members. 
At entry into force , except for 28 tariff lines for Panama, all Central America's applied MFN tariffs 
were ad valorem . 
3.16.   Table 3.2 shows the tariff elimination c ommitments by each of the Central American countries 
towards Korea . Reflecting the largely harmonized CET for the four original CACM members, prior to 
the entry into force of the Agreement around 48% of their tariff lines were already duty -free on an 
MFN b asis (ranging from 4 7.7% for El Salvador  to 49.5% for Costa Rica); the corresponding figure 
for Panama was 45.5%. In terms of bilateral trade, MFN duty -free lines represented 81% of imports  WT/REG452/1 /Rev.1  
 
- 13 - 
 
  by Costa Rica from Korea, 72 % by Panama, 61% by El Salvador,  50% by Honduras and around 43% 
of imports by Nicaragua.  
3.17.   Upon entry into force, more than 60% of tariff lines of Costa Rica, Honduras and Panama 
were free for Korean products, while for El Salvador and Nicaragua the figure w as around 53% . Once 
fully implement ed (2034, 2036 or 2037), in general less than 5% of the lines and imports would still 
face tariffs when imported into one of the Central American countries . 
Table 3.2 Central America: Tariff eliminat ion commitments under the Agreement and 
corresponding average trade  
Duty 
phase
-out 
period  Central American Parties' Imports from Korea  
period  COSTA RICA  HONDURAS  NICARAGUA  
  (2016 – 2018, USD million)   
 Lines  Imports  Lines  Imports  Lines  Imports  
 No  %  Value  %  Value  %  Value  %  Value  %  Value  %  
2019 
(MFN)  3,450  49.5 183.2  81.0 3,361  48.2 52.0 49.6 3,395  48.7 36.5 42.9 
2019 1,307  18.7 19.9 8.8 1,120  16.1 5.8 5.5 344 4.9 0.6 0.7 
2021 15 0.2 0.0 0.0     15 0.2 1.3 1.5 
2023 464 6.7 2.4 1.0 649 9.3 4.3 4.1 761 10.9 6.4 7.6 
2025 6 0.1 0.0 0.0     129 1.8 26.5 31.1 
2026     40 0.6 34.0 32.5     
2028 1,050  15.1 8.1 3.6 1,191  17.1 4.1 3.9 1,610  23.1 7.6 8.9 
2030 3 0.0 0.0 0.0     18 0.3 0.0 0.0 
2033 328 4.7 0.7 0.3 301 4.3 0.4 0.4 372 5.3 5.7 6.7 
2034 12 0.2 0.0 0.0 4 0.1 0.0 0.0 50 0.7 0.0 0.0 
2037 1 0.0 0.0 0.0     2 0.0 0.0 0.0 
Remain 
dutiable  338 4.8 12.0 5.3 308 4.4 4.2 4.0 278 4.0 0.5 0.6 
TOTAL  6,974  100 226.2  100 6,974  100 104.8  100 6,974  100 85.2 100 
 EL SALVADOR  
(2017 – 2019, USD million)   PANAMA  
(2018 – 2020, USD million)  
2020 
(MFN)  3,450  47.7 140.3  60.6         
2020 302 4.2 9.3 4.0         
2021 
(MFN)          4,263  45.5 120.7  72.4 
2021 8a 0.1a 0.0 0.0     1,623  17.3 19.8 11.9 
2022 21 0.3 2.6 1.1         
2023         40 0.4 0.3 0.2 
2024 734 10.1 2.3 1.0         
2025         1,261  13.5 4.7 2.8 
2026 49 0.7 4.1 1.8         
2027         24 0.3 0.6 0.4 
2028 7 0.1 33.6 14.5         
2029 1,913  26.4 29.4 12.7     1,273  13.6 10.2 6.1 
2030             
2031 57 0.8 2.1 0.9         
2032         8 0.1 0.0 0.0 
2034 347 4.8 0.3 0.1         
2035         408 4.4 1.5 0.9 
2036         12 0.1 1.5 0.9 
Remain 
dutiable  350 4.8 7.5 3.2     460 4.9 7.5 4.5 
TOTAL  7,238  100.0  231.5  100
.0     9,372  100.0  166.7  100
.0 
a Reduction not  originally foreseen under the Agreement . Legislative Decree 738 of September 2020 
granted MFN duty -free treatment for electric and hybrid cars , encompassing eight tariff lines . WT/REG452/1 /Rev.1  
 
- 14 - 
 
  Note:  Based on the HS 2012 ( CRI, HND, NIC) and 2017 nomenclature s (SLV, PAN). 
 For Panama, data for HS 1 -97. 
Source:  WTO estimates based on data provided by the authorities (CRI, SLV , PAN ) or constructed by the 
WTO Secretariat (HND, NIC ). 
 
3.1.3   Liberalization schedule  
3.1.3.1   Korea  
3.18.   Chart 3.1 shows Korea's tariff liberalization by HS section and by partner. Products of six HS 
Sections – all agricultural , and also Sections V and VI - will remain subject to duties following the 
Agreement's full implementation. Lines liberalized between entry into force and 2039 cover  all HS 
Sections except X and XXI, already free on an MFN basis in 201 9. In general, n o preference is 
granted for products remaining dutiable ; and all of Korea's alternate rate of duties  apply to these 
products .  WT/REG452/1 /Rev.1  
 
- 15 - 
 
  Chart 3.1 Korea : Average of dutiable rates, by HS Section  
 
Note:  Tariff lines subject to in -quota rates are excluded in the computation. For the calculation of 
averages, specific rates are excluded, and the ad valorem  parts of alternate rates are included.  
 Based on the HS 2017 nomenclature.  
Source:  WTO estimates based on data provided by the Korean authorities and the WTO -IDB. 
020406080100120
0%20%40%60%80%100%
IIIIII IV VVIVIIVIII IX XXIXIIXIII XIV XVXVIXVIIXVIII XIX XXXXITotal
Average MFN (%)% tariff  lines
HS Section
0%20%40%60%80%100%120%
0%20%40%60%80%100%
Average MFNtariff  linesPanama
Free MFN Free EIF Free transition period Remain dutiable Avg. MFN tariff0%20%40%60%80%100%120%
0%20%40%60%80%100%
Average MFNtariff linesNicaragua0%20%40%60%80%100%120%
0%20%40%60%80%100%
Average MFNtariff  linesHonduras0%20%40%60%80%100%120%
0%20%40%60%80%100%
Average MFNtariff  linesEl Salvador0%20%40%60%80%100%120%
0%20%40%60%80%100%
Average MFN tariff  linesCosta RicaWT/REG452/1 /Rev.1  
 
- 16 - 
 
  3.19.   Chart 3.2  below presents the lines remaining dutiable by Chapter for imports by Korea  from 
Central American partners. Products remaining dutiable are found in  the same 26 Chapters  in all five 
partners. Except Chapter 14 (vegetable plaiting materials) that is fully liberalized, dutiable lines 
remain in  all other agr icultural chapter s (HS Sections  1-24). A further 17 lines of HS Chapters 27, 
33 and 35  will also remain dutiable.  These lines concern mineral oils; ginseng essential oils; and 
dextrins, starches and glues of HS 3505  (the latter is classified as an agricultural product under the 
WTO Agreement on Agriculture ). Among the remaining dutiable lines, preferential treatment by 
Korea is only granted to imports of fish and preparations  of meat, fish, vegetables and fruits 
(Chapter s 3, 16 and 20) . It can also be seen from the Chart that a signi ficant difference in the 
average tariff only exists  for products of Chapter 15 (animal or vegetable fats and oils ) imported 
from Nicaragua, as compared to the other four  Central American Parties (24.4% and 67.6%). For 
Chapter 15 Korea has a lower number of  dutiable lines for imports from Nicaragua as compared to 
the other four Parties – eight instead of  14 – and that these lines have lower MFN rates . The average 
tariffs remaining vary considerably, from 3.5% in HS 27 (mineral oils) to almost 500% in HS 10 
(cereals).  
Chart 3.2 Korea: Average of dutiable rates and number of dutiable lines, by HS Chapter  
 
Note: Tariff lines subject to in -quota rates are excluded in the computation. For the calculation of 
averages , specific rates are excluded, and the ad valorem  parts of alternate rates are included.  
 Based on the HS 2017 nomenclature.  
Source:  WTO estimates based on data provided by Korean authorities.  
 
3.1.3.2   Central American countries  
3.20.   Chart 3.3 shows Central America's tariff liberalization by HS section. Following the 
Agreement's full implementation, all products of HS Sections XIV, XVII, XVIII, XIX, XXI will be duty 
free in all five Central American Parties. Conversely, a  number of agricultural products of HS Sections 
I-IV and of industrial products of Sections VII, X, XV and XX will remain dutiable in all five Central 
American Parties. As regards all these sections/Parties, the average final dutiable rate will vary from 
7.6% to 57 .4% (respectively Section s VII and  I, both  in Panama ). Products from the remaining eight 
HS Section s will be subject to tariffs in at least one of the Central American Parties . Tariff peaks are 
less present in these Sections, with average final du tiable rates ranging between 7.4% and 15%.  
0%50%100%150%200%250%300%350%400%450%500%550%
ALL
CRI
SLV-HND
NIC
PAN
CRI
SLV
HND
NIC
PAN
CRI-HND
SLV
NIC
PAN
ALL
ALL
CRI
SLV
HND
NIC
PAN
CRI
SLV-HND
NIC
PAN
CRI-SLV-HND-PAN
NIC
ALL
ALL
  CRI-SLV-HND-PAN
NIC
ALL
CRI-SLV-HND-PAN
NIC
CRI-SLV-HND-NIC
PAN
ALL
ALL
ALL
ALL
CRI
SLV
HND-PAN
NIC
ALL
ALL
ALL
ALL
ALL
ALL
1 2 3 4 56 7 8 91011121315 1617181921 20 222324273335Tariff rateHundreds
HS Chapter
Preferential=MFN Preferential MFNWT/REG452/1 /Rev.1  
 
- 17 - 
 
  3.21.   Chart 3.4 presents the lines remaining dutiable by Chapter in Central American countries, 
covering a total of 45 Chapters. Of these, preferences are granted only by Costa Rica, Honduras and 
Nicaragua for one Chap ter each: beverages of Chapter 22 for the former two, and iron and steel for 
Nicaragua. For all other cases, no preferences are granted.  Products of seventeen chapters remain 
dutiable in all Central American countries , while products of fifteen  other chapt ers are dutiable only 
in one Central America n country.  WT/REG452/1 /Rev.1  
 
- 18 - 
 
  Chart 3.3 Central America: Average of dutiable rates, by HS Chapter  
 
02468101214161820
0%20%40%60%80%100%
IIIIII IV VVIVIIVIII IX XXIXIIXIII XIV XVXVIXVIIXVIII XIX XXXXITotal
Average MFN (%)% tariff  lines
HS Section
0%5%10%15%20%25%
0%20%40%60%80%100%
Average MFNtariff  linesPanama
Free MFN Free EIF Free transition period Remain dutiable Avg. MFN tariff0%5%10%15%20%
0%20%40%60%80%100%
Average MFNtariff linesNicaragua0%5%10%15%20%
0%20%40%60%80%100%
Average MFNtariff  linesHonduras0%5%10%15%20%25%30%
0%20%40%60%80%100%
Average MFNtariff  linesEl Salvador0%5%10%15%20%
0%20%40%60%80%100%
Average MFN tariff  linesCosta RicaWT/REG452/1 /Rev.1  
 
- 19 - 
 
  Chart 3.4 Central America: Average of dutiable rates, by HS Chapter  
 
Note: Charts 3.3 and 3.4 : Based on the HS 2012 (CRI, HND, NIC) and 2017 nomenclatures (SLV, PAN).  
Source : Charts 3.3 and 3.4: WTO estimates based on data provided by the authorities (CRI, SLV, PAN ) or 
constructed by the WTO Secretariat (HND, NIC), and the WTO -IDB. 
0%10%20%30%40%50%60%70%
2
3
4
6
7
8
9
10
11
15
16
17
18
19
20
21
22
23
24
39
40
44
48
70
72
73
76
85
94Tariff rate
HS ChapterCOSTA RICA
Preferential=MFN Preferential MFN0%10%20%30%40%50%60%70%
2479101115161719202122394244484952585960616263646872737476859496Tariff rateHundreds
HS ChapterEL SALVADOR
0%5%10%15%20%25%30%35%40%45%50%
2
3
4
7
8
9
10
11
15
16
17
18
19
20
21
22
23
24
25
39
40
48
64
72
94Tariff rateHundreds
HS ChapterNICARAGUA0%10%20%30%40%50%60%
2
4
7
9
10
11
15
16
17
18
19
20
21
22
24
39
44
48
64
68
70
72
73
85
94
96Tariff rateHundreds
HS ChapterHONDURAS
0%10%20%30%40%50%60%70%80%90%100%
24791011151617192021222434394048727376848594Tariff rateHundreds
HS ChapterPANAMAWT/REG452/1 /Rev.1  
 
- 20 - 
 
  3.1.4   Tariff rate quotas  
3.22.   Article 2.15 sets out the d isciplines for the administration of tariff -rate quotas (TRQ), in 
accordance with Article XIII of GATT 1994 and the Import Licensing Agreemen t. Korea grants a 
1,400 metric ton ne duty-free TRQ to "other shrimps and prawns" under HS 0306.17.90.90 for all 
Central American Parties except Costa Rica (Table 3.3). Central American Parties do not grant TRQs 
to Korea.  
3.23.    Article 2. 15 provides  that TRQ administration should be conducive to  full TRQ utilization7 and 
may be the subject of consultations upon  written request of either Party.  The TRQ is administered 
by Korea 's Fishery Trade Association through an auction system.  
Table 3.3 Korea 's allocation of duty-free TRQ for shrimps and prawns   
Party  Quota quantity (metric ton ne) Out-of-quota rates  
SLV 100 MFN rate  
HND 600 Progressively reduced, free on 1.1.2037  
NIC 500 Progressively reduced, free on 1.1.2037  
PAN 200 Progressively reduced, free on 1.1.2039  
Source:  Appendix 2 -B-1 of the Agreement.  
 
3.2  Rules of origin  
3.24.   Rules of origin disciplines are found in Chapter 3 . Products are originating when whol ly 
obtained (WO) in the Parties, or produced entirely in a Party either exclusively from originating 
materials or if the product -specific requirements (in Annex 3 -A) for non -originating material are 
fulfilled.  
3.25.   Product -specific requirements are either a change of tariff classification (CTC), a minimum 
regional value -content (RVC) or that certain process es take place in the Pa rties. The CTC 
requirement is generally at the heading level, but changes a t the subheading or chapter levels may 
instead be required.8 The RVC threshold  is generally at 40% or 45% of regional content; thresholds 
of 20%, 30% , 35%  and 50% may be required i n fewer instances. Such RVCs apply under the "build -
down method" using the value of non -originating materials calculated on a fob basis , or the "build-
up method ", based on value of originating materials  calculated on a fob basis .9 The processing rule 
applies to products of the chemical or allied industries (Chapter s 28-38); it requires that a c hemical 
reaction  take part in the Parties. This method can be applied as an alternative to either a CTC or a n 
RVC, as specified for each product.  
3.26.   Bilateral cumulation applies among Parties for which the Agreement is in force. Diagonal 
cumulation may be considered with countries with which both Parties have RTAs.10 As of June 2022, 
diagonal cumulation had not been implemented under the Agreement.  
3.27.   As is generally the case in many RTAS concluded by Korea,  outward -processing is foreseen 
for goods produced in designated geographical areas of the Korean Peninsula, in accordance with 
decisions to be taken by the Committee on Outward Processing Zones on the  Korean Peninsula (the 
"OP committee") .11 As of June 2022,  this Committee had not met ..  
 
7 The provision  in this regard goes beyond  the WTO provision which does  "not discourage the full 
utilization of quotas ".  
8 For certain products of Chapters 54, 55, 60-63, the requirements applied on trade between Korea and 
Costa Rica, Honduras, Nicaragua  and Panama  are different from those on trade between Korea and El 
Salvador . 
9 For fewer products under HS Chapters 73 -95 the build -up method  may be used instead. In these 
cases, the thresholds are generally 10 percentage points lower. Details can be found in Article  3.3. 
10 Common RTA partners include Canada, China, Chile, Colombia, EFTA countries, European Union, 
Peru, Singapore, the United Kingdom and the United States . 
11 In many of Korea's RTAs,  these benefits are granted to specific goods produced at the Kaesong 
Industrial Complex . WT/REG452/1 /Rev.1  
 
- 21 - 
 
  3.28.   A novel provision establishes Parties' mutual recognition of re -export certificate s allowing  
goods imported from third  parties to transit trough  a Party's free zone wi thout losing their 
preferential status under a trade agreement between that third party and the other Party. The criteria 
for the application of the provision is specified in Article 3.16.  
3.29.   Table 3.4 summarize s the main provisions  on rules of origin . Other provisions (non -qualifying 
operations, set s, etc) are also included in Chapter 3.  
Table 3.4 Main  rules of origin provisions under the Agreement (Chapter 3)  
Subject  Discipline  Article s 
Methods  WO – CTC – RVC – Processing  rule 3.1-3.2-3.3 
Absorption principle  Yes 3.4 
Cumulation  Bilateral cumulationa 
Diagonal cumulation may be con sidered.  3.6 
Tolerance  Non-originating material threshold for a g ood that did not undergo a 
CTC: 
- value (fob): 10 % of the total value except Ch apters  1-24 & 50 -63 
- for Chapters 15 -24, 10% threshold and non-originating material of a 
different subheading  
- for Chapters 50 -63: 10% threshold in terms of weight  of the final good  3.7 
Direct transport  Yes.  
Transit through third Parties possible provided no operation beyond 
those necessary to keep it in good condition. Evidence needed.  3.14 
Outward -processing  Foreseen; specifics to be agreed on the OP Committee  3.15 & 
Annex 3 -B 
a With Parties for which the Agreement is in force.  
 
3.30.   A Committee on Rules of Origin and Origin Procedures, and Customs Procedures and Trade 
Facilitation is established in Article 4.13.  
3.3  Export duties and charges, and quantitative restrictions  
3.31.   Disciplines with respect to export restrictions, fees and charges are in paragraphs  3.5.  and 
3.9.   above , mutatis mutandis . Exceptions to the general prohibition o n quantitative restrictions 
include actions authorized by the WTO's DSB and the following Party - and product -specific export 
controls:  
a. Costa Rica: wood in logs and boards from forests; hydrocarbons; coffee; ethanol and crude 
rums; and minimum export price for bananas;  
b. Honduras: wood from broadleaved forests; and  
c. Nicaragua: tempora ry controls on basic foodstuffs12 in case of short supply  (generally one 
year) . 
3.32.   Also reflected in Article 2.9 are the GATT 1994 prohibitions o n voluntary export restraints and 
price requirements unless in the context of price undertakings.  
3.33.   Duties and char ges imposed in connection with the export of goods to the other Party are 
prohibited except otherwise provided for in the Agreement (Article 2.12) or if these are also imposed 
on goods for domestic consumption, except export duties on the  follow ing (Annex 2 -C): 
a. for Costa Rica, bananas, coffee and meat;  
b. for Nicaragua, coffee.  
 
12 Beans, brown sugar, chicken meat, coffee, corn, corn flour, corn tortillas, powdered milk, rice, salt 
and vegetable oil.  WT/REG452/1 /Rev.1  
 
- 22 - 
 
  3.4  Regulatory provisions on trade in goods  
3.4.1   Standards  
3.4.1.1   Sanitary and phytosanitary measures  
3.34.   Chapter 5 of the Agreement covers Sanitary and Phytosanitary Measures (SPS) and affirms 
the Parties' rights and obligations under the WTO SPS Agreement (Article 5.3). 
3.35.   Neither harmonization nor mutual recognition are made mandatory under the Agreement.  
3.36.   The Chapter aims at strengthening cooperation, enhancing mutual regulatory understanding 
and en suring exchange of information upon request, including on risk analysis process . Cooperative 
activities specified under Article 5.4 are to be developed through consultations in the Committee on 
SPS Matters , which  is established under Article 5.6.  
3.37.   The Agreement's dispute settlement does not apply to the SPS Chapter (Article 5.7). 
3.4.1.2   Technical barriers to trade  
3.38.   Chapter 6 covers Technical Barriers to Trade (TBT) ; it affirms the Parties' rights and 
obligations under the WTO TBT Agreement , which is incorpo rated into the Agreement  (Article 6.2). 
3.39.   Neither harmonization nor mutual recognition are made mandatory under the Agreement.  
3.40.   Disciplines that go beyond those of the TBT Agreement  include : 
a. a general 60 -day timeframe for the provision of information requeste d by a Party (Article 
6.13);  
b. upon request, a Party is to provide information and guidance on compliance with its 
technical regulations to the other Party or its economic operators  (Article 6.6:1.b) ; 
c. a Party shall provide written explanation for not conside ring a conformity assessment body 
of the other Party as fulfilling its requirements, as well as, upon request, for not 
considering the other Party's technical regulation as equivalent or for not accepting the 
results of conformity assessment procedures per formed in its territory (Articles 6.6 -6.7); 
d. an illustrative list of approaches for enhancing mutual acceptance of conformity 
assessment (Article 6.7:1) - including  accepting suppliers' declaration of conformity  and 
developing mutual recognition  agreements  for conformity assessment procedures . Positive 
consideration shall be given to a request for negotiating such agreements ; in case 
decline d, the Party shall upon re quest provide a written explanation for such a decision.  
e. a best endeavour clause as regards reasonable requests for extending the time -period 
between the adoption of the technical regulation and its entry into force (Article 6.8:7);  
f. cooperation on TBT issu es (Article 6.9), including the identification of trade -facilitating and 
cooperation initiatives ;  
g. novel disciplines on mandatory marking or labelling  (Article 6.10) providing a list of good 
practices;13 and 
h. new disciplines on border control and market sur veillance activities  (Article 6.11) , under 
which the Parties commit to the following : 
 
13 E.g. confining marking  or labelling to products that pose a  risk to human, animal or plant health or 
life, the environment, or national safety.  WT/REG452/1 /Rev.1  
 
- 23 - 
 
  i. exchange of information and experience;  
ii. these  are undertaken by competent authorities  (including delegated bodies) ; 
iii. conflicts of interest between authorities a nd economic agents subject to control or 
supervision are avoided; and   
iv. promptly notifying the importer of the reasons for having detained at a port of entry 
goods due to perceived non-compliance ; 
3.41.   Transparency pro visions  (Article 6.8) are th e same as in  the TBT Agreement ; a Party's 
responses to significant comments received from the other Party on proposed TBT measures are to 
be published or made publicly available.  
3.42.   A Committee on TBT is established under Article 6.12. 
3.4.2   Safeguard mechanisms  
3.43.   Safeguard measures are addressed in Section A of the Trade Remedies Chapter 7.  
3.44.   Concomitant application of global and bilateral safeguards with respect to the same good is 
prohibited (Article  7.6). 
3.45.   The Agreement's dispute settlement does not apply to safeguard measures.   
3.4.2.1   Global safeguards  
3.46.   The Parties retain their rights and obligations under Article XIX of GATT 1994 and the WTO 
Safeguards Agreement (Article  7.6). 
3.47.   On the request of the other Party, t he investigating Party shall immediately notify in writing 
the initiation, provisional and final findings of a safeguard investigation.  
3.4.2.2   Bilateral safeguards  
3.48.   Bilateral safeguards are addressed in Articles 7.1 -7.6 of the Agreement. A safeguard measure 
may be  imposed on an originating product where, as a result of its tariff reduction/elimination, it is 
imported in such increased quantities (in absolute or relative terms) and under such conditions as 
to constitute a substantial cause of serious injury, or thre at thereof, to the domestic industry.  
3.49.   With the exception of the following , the Agreement's bilateral safeguard provisions are 
generally in line with those of the WTO Agreement on Safeguards :14 
a. suspension of a further reduction in the product's tariff or an increase in the product's 
tariff to a level not exceeding the lesser of its MFN tariff applied at that time or on the day 
immediately preceding the Agreement's entry into force;  
b. investigation s are to be in accordance with Articles 3 and 4.2 of the WTO Agreement on 
Safeguards, which are incorporated into the Agreement. The investigation  shall be 
completed within one year;  
c. a safeguard measure has a maximum duration of two years  subject to an ext ension of two 
years, provided its total period of application - including any provisional/extended 
application - does not exceed four years  (in both cases, half of the period under the WTO) ;  
d. a safeguard measure cannot be applied beyond the expiration of t he transition period, 
except with the consent of the other Party. "Transition period" means 10 years from the 
 
14 In particular, disciplines on provisional measures and reapplication of safeguard measures are the 
same as under the WTO Agreement.  WT/REG452/1 /Rev.1  
 
- 24 - 
 
  Agreement's entry into force; for goods having a tariff elimination schedule of 10 years or 
more, it means the good's relevant tariff elimination period plus three years;  
e. is to be accompanied by compensatory measures; in the absence of agreement, retaliation 
is possible;  
f. upon termination of the bilateral safeguard measure, the tariff shall be the rate that would 
have been in effect for the good, ac cording to the Schedule of that Party.  
3.4.2.3   Balance -of-payments safeguards  
3.50.   Article 23.5 authorizes a Party to apply safeguard measures in case of serious balance of 
payments and external financial difficulties, in accordance with GATT 1994 and its Understanding  on 
Balance -of-Payments Provisions. In adopting such measures, the Party shall immediately consult 
with the other Party.  
3.4.3   Anti-dumping and countervailing measures  
3.51.   Anti-dumping and countervailing measures are addressed in Section B (Article 7.7 -7.14) of 
Chapter 7.  
3.52.   Beyond the WTO disciplines, the Agreement also provides for the following:  
a. the Parties shall ensure, after any imposition of provisional measures and in any case 
before the final determination, full and meaningful  disclosure of all essential facts  and 
considerations which form the basis for the decision to apply definitive . Upon request 
opportunity shall be given to interested parties to be heard;    
b. clarification on:  
i. notification  of, and consultations  with, the other Party,  prior to the initiation of 
the investigation ; and 
ii. consultations with exporters about possible price undertakings, following 
preliminary affirmative determination to apply  either an AD or a countervailing 
(CV) measure ; 
c. best endeavour  clauses  to consider the public inter est before the application of 
countermeasures  and to hold a hearing with the interested parties; and  
d. careful examination of any application for initiation of an anti -dumping investigation on 
a good that had been subject to anti -dumping measures in the prev ious year.  
3.53.   The Agreement's dispute settlement mechanism does not apply to AD and CV measures 
(Article 7.14). 
3.4.4   Subsidies and state -aid 
3.54.   The Agreement has no provision s on subsidies and state -aid on trade in goods.  
3.4.5   Customs -related procedures  
3.55.   Customs procedures  related to origin are dealt with in Sections B of Chapter 3 whilst other 
procedures and trade facilitation provisions are found in Chapter  4. The m ain provisions are 
summarized in Table  3.3. 
3.56.   Preferential treatment is granted upon the presentation of a Cer tificate of Origin ; its format 
is included in Annex 3 -C. The Certificate of Origin  is self -issued by the exporter  or producer  
(Article  3.17) .  WT/REG452/1 /Rev.1  
 
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  3.57.   Verification procedures include written exchange of information , verification visits made along 
with officials from the competent authority of the exporting Party, or request s for assistance from 
the latter.  In the absence of a response , or if the information is insufficient, the customs 
administration of the importing Party may deny preferential treatment within 30 days in the first two 
cases , and 150 days in the latter case  (Article 3.24). 
3.58.   Best endeavour provisions call for the conformity of customs regulations with international 
standards and recommended practices est ablished by the World Customs Organization , and for the 
Parties' customs administration to cooperate on the implementation and operation of customs -
related matters  (Article 4.12) . Transparency disciplines require the establishment of enquiry points  
and spe cify information to be published ( Article 4.1). Promotion of Authorized Economic Operator 
programs and negotiations for their mutual recognition are in line with the provisions of the WTO 
Trade Facilitation Agreement (TFA).  
3.59.   Going beyond the TFA, Chapter 4 provides for : 
a. advance ruling s to be issued within 120 days from the receipt of the request (TFA: " in a 
reasonable, time -bound  manner ");; 
b. release  of goods within 48 hours of arrival to the extent possible , directly at the point of 
arrival without temporary transfer to warehouses or other facilities (not included in the 
TFA);  
c. a best endeavour commitment to make  an advance d notice of any significant modification 
of laws and regulations governing import s and  likely to substantially affect the 
Agreement's operation ;  
d. the right of a Party providing confidential information to require the other Party to furnish 
written assurance that the information will be held in confidence;  and 
e. precise  express shipment  provisions requir ing e.g. clearance within six hours under normal 
circumstances  and the setting of a threshold of USD 150 or less  for waiving customs duties .  
Table 3.5 Summary of Customs procedures  
Subject  Agreement's Provisions  
Origin -related  
Proof of origin  Certificate of Origin  
Certificate of Origin  Self-issued  
Standard form  (Annex 3 -C) 
Valid for 1 year  from date of signature  
Certified exporters  Not applicable.  
Waiving of proof of origin  Imports under USD 1,000; or  
If expressly provided that no proof is required for a certain good  
Verification procedures  Written  request s and verification visits  
Final determination by the customs administration of the importing 
Party within 1 year from the initiation of the verification (extension 
of 90 days possible)  
On-site verification by  Competent authorities of both importing and the other Party.  
Trade faci litation  
Advanced ruling provisions  Article 4.11 
Risk management provisions  Article 4.4 
Release of goods provisions  Article 4.2 
Express shipments  Article 4.8  
Both  
Review and appeal, Penalties provisions  Articles 4. 9-4.10 
Technical consultations  Article 4.14  
Source:  Chapters 3-4 of the Agreement.  
 WT/REG452/1 /Rev.1  
 
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  3.5  Sector -specific provisions on trade in goods  
3.60.   The Agreement contains no sector -specific provisions on trade in goods.  
4  PROVISIONS ON TRADE IN SERVICES  AND INVESTMENT  
4.1  Scope and definitions  
4.1.  Cross -border trade in services is governed by Chapter 10 and investment is covered by 
Chapter  9. Sector -specific disciplines on financial services and telecommunications are included in 
Chapters 11 and 13, respectively . Measures affecting the temporary entry of business persons of a 
Party into the territory of the other Party are regulated by Chapter  12. 
4.2.  Chapter 10 applies to measures adopted or maintained by a Party affecting trade in services 
supplied by the other Par ty's suppliers under the GATS modes of supply 1, 2 and 4; mode 3 on 
establishment is covered in Chapter 9. Sectoral coverage mirrors that of the GATS, including for air 
transport services; financial services are however only subject to the disciplines of C hapter 11. 
Certain provisions of Chapter 10 also apply to covered investments, as specified in this Section. 
Government procurement as well as subsidies and grants are carved out.  
4.3.  Chapter 9 applies to measures adopted or maintained by a Party relating to i nvestors of the 
other Party (including state enterprises) and their covered investments.15 In case of inconsistency 
between Chapters 9 and another Chapter, the latter shall prevail (Article  9.2). 
4.4.  Disciplines apply at central or local level s of governments, unless otherwise specified in the 
Agreement, and to delegated non -governmental bodies in the exercise of powers delegated by 
central or local governments or authorities (Articles 9.1 and 10 .1). Definitions generally follow those 
under the GATS, unless otherwise specified in this Section.  
4.5.  As in the GATS, services supplied in the exercise of gov ernmental authority are outside the 
Agreement's scope. Measures affecting citizenship, nationality, residence and permanent 
employment of natural persons are also carved out.  
4.6.  Government procurement as well as subsidies and grants remain subject to some dis ciplines 
of Chapter 9 as specified in the sub -sections below.  
4.2  Denial of benefits  
4.7.  A Party may deny the benefits of Chapters 10 (Article 10.11) and 9 (Article 9.12) to the other 
Party's service supplier/investor (and its investment) that is an enterprise:  
a. owned or controlled by persons of a non -party and the denying Party adopts or maintains 
measures prohibiting transactions with the non -party or a person of the non -party that 
would be circumvented if the benefits of the Chapter were extended to the person; or 
b. owned or controlled by persons of a non -party or of the denying Party that has no 
substantial business activities in the territory of the other Party.  
4.3  General provisions on trade in services and investment  
4.3.1   Market access  
4.8.  Article 10.4 on market access prohibits similar limitations as under GATS Article  XVI.2. 
Exemptions from these prohibitions are specified in the Parties' reservations (Annexes  I and II, as 
per Article 10.6 ). The same commitments apply to measures with respect to financial instit utions of 
another Party, investors of another Party seeking to establish a financial institution and certain cross -
border financial services (Article 11.4).  
 
15 Article s 9.9 and 9 .11 apply to all investments in the territory of a Party.  WT/REG452/1 /Rev.1  
 
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  4.9.  Market access provisions also apply to measures affecting the supply of a service by a covered 
investment . 
4.3.2   National and MFN  treatment  
4.10.   A Party shall grant, for all services and service suppliers, investors and covered investments 
of the other Party in its territory (in relation to establishment, acquisition, expansion, management, 
conduct, operation, and  sale or other disposition of their investments):  
a. national treatment (Articles 10.2 and 9.3);  and 
b. most-favoured nation (MFN) treatment (Articles 10.3 and 9.4).16 
4.11.   For financial services, national and MFN treatment are granted to investors and financial 
institutions of another Party, investments by investors of another Party in financial institutions and 
cross-border suppliers of financial services of another Party (Articles 11.2 and 11.3).17  
4.12.   Exceptions are as follows:  
a. the Parties' reservations in Annexes I,  II and III, existing non -conforming measures 
maintained at local levels of government, compulsory licenses as well as disclosure of 
proprietary information consistent with  the TRIPS Agreement, government procurement 
and subsidies or grants are neither sub ject to national nor to MFN treatment (Articles 10.1, 
10.6 and 9.13);  
b. MFN does not apply to Investor -State Dispute Settlement (ISDS) mechanisms such as 
those under the Agreement's or under any other international treaty or trade agreement 
(footnote to Art icle 9.4).  
4.3.3   Commercial presence  
4.13.   Neither Party may require a service supplier of the other Party to establish or maintain a 
representative office or any form of enterprise, or to be resident in its territory as a condition for the 
cross-border supply of a se rvice (Article 10.5). Exemptions from these obligations are specified in 
the Parties' lists of reservations.  
4.3.4   Performance requirements  
4.14.   Article 9.9 prohibits the following investment -related performance requirements:  
a. export, domestic  content, trade and fore ign exchange balancing and technology transfer 
requirements, with respect to the establishment, acquisition, expansion, management, 
conduct, operation or sale or other disposition of an investment; and  
b. domestic  content, trade and foreign exchange balancing  and export requirements with 
respect to the granting of an advantage in connection with the establishment, acquisition, 
expansion, management, conduct, operation, or sale or other disposition of an investment.  
These prohibitions apply to all investments,  including those of a non -party. Detailed provisions and 
applicable exceptions are found in Article  9.9. 
4.15.   Exceptions to these general prohibitions are spelled out in paragraph 3 of Article 9.9. 
Requirements on training of workers, location of production , supply of a service, training or 
employment of workers, construction and expansion of particular facilities  and R&D are authorized. 
The use of an intellectual property right in accordance with the TRIPS Agreement, or a requirement 
 
16 The Agreement's definitions of national treatment and MFN are in line with the ir GATS  equivalents . 
17 For financial institutions and investors of another Party, and their investments in financial institutions, 
the obligation of national treatment applies with respect to the establishment, acquisition, expansion, 
management, conduct, operation and sale or other disposition of financial institutions or investments in financial 
institutions in the Parties' territory.  WT/REG452/1 /Rev.1  
 
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  imposed or enforced to reme dy an anticompetitive practice are also authorized. Also authorized are 
performance requirements under some GATT Article XX -type measures as well as export promotion 
and foreign aid programmes, or in the context of government procurement or the granting of  
preferential treatment, as specified in sub -paragraphs c. to f.  
4.16.   The following are carved -out from this obligation:  
a. financial services, in accordance with paragraph 2 of Article 11.1; and  
b. existing measures or reservations listed in Annex I or II.  
4.3.5   Senior Management and Boards of Directors  
4.17.   The Parties cannot impose nationality requirements for senior management positions of a 
company that is a covered investment, but can require that a majority of its board of directors, or 
any committee thereof,  be of a particular nationality, or resident in the territory of the Party, 
provided that the requirement does not materially impair the ability of the investor to exercise 
control over its investment (Article 9.10).  
4.18.   A similar provision prohibits nationality criteria with respect financial institution of the other 
Party; also prohibited is requiring that more than a minority of the board of directors of a financial 
institution of the other Party be composed of n ationals of the Party, persons residing in the territory 
of the Party, or a combination thereof (Article 11.8).  
4.19.   Measures or reservations listed in Parties' Annexes I -III, government procurement and 
subsidies or grants are not subject to these disciplines.  
4.3.6   Movement of natural persons  
4.20.   Chapter 12 of the Agreement on the Movement of Natural Persons builds on the GATS Annex. 
The scope of and principles used in both agreements are similar.18  
4.21.   Temporary entry and stay , provided that the business person otherwise c omplies with 
immigration measures applicable to temporary entry,  is granted for the following categories of 
natural persons (defined in Article 12.9 and Annex 12 -A): 
a. business visitors engaged in activities listed in Appendix 12 -A-1. Prior approval 
requirem ents (including certification and other similar procedures) and quotas are 
prohibited;  
b. traders and investors. Labour certification tests and other similar procedures, as well as 
quotas are prohibited; and  
c. intra-corporate transfers (ICTs). Parties may req uire that the person has been employed 
continuously by the enterprise for one year within the three years immediately preceding 
the date of the application for temporary entry.  
4.22.   The Chapter clarifies that the Parties may require a visa or an equivalent requirement prior 
to temporary entry.  
4.23.   No reference is made in  the Agreement  to the length of stay for each category of natural 
person.  
4.24.   The Parties are required to publish their requirements for temporary entry of business persons 
(referred to in Appendix 12 -A-2) for transparency purposes . No commitment is undertaken on 
informing the applicants of the progress of the ir application for entry.  
 
18 E.g. access to employment market and right of residence is carved out, and the right of entry of 
natural persons of the other Party, including by establishing eligibility re quirements, is authorized provided 
they are not applied in a manner that nullifies or impairs the Agreement's benefits.  WT/REG452/1 /Rev.1  
 
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  4.25.   Recourse to the Agreement's dispute settlement mechanism is possible if the matter involves 
a pattern of practice and the natural persons affected have exhausted all available domestic 
remedies.  
4.3.7   Other measures on Investment  
4.26.   Chapter 9 sets out disciplines on investment that go beyond those of GATS mode 3. These 
guarantee e.g., the application of generally accepted internationa l legal standards regarding the 
minimum standard of treatment; treatment in case of armed conflict or civil strife; expropriation 
and compensation; and subrogation. The Chapter does not prevent a Party from adopting or 
maintaining investment -related enviro nmental measures provided they are compatible with Chapter 
9 (Article 9.11); this applies to all investments (including those from a non -party) in the territory of 
a Party.  
4.27.   Section B of Chapter 9 provides arbitral proceedings under an ISDS mechanism (Secti on 5.6). 
Disciplines relating to the prevalence of other Chapters in case of inconsistency, investment -related 
environmental measures and special formalities in connection with covered investment (Articles 9.9, 
9.11 and 9.14:1) cannot be brought before the  ISDS mechanism .  
4.28.   Bilateral investment agreements between Korea and each of the Central American parties 
were terminated upon entry into force of the Agreement (Article 9.30).  
4.29.   The Parties have listed sectoral reservations to commercial presence in non-services aspects 
– i.e. manufacturing. These include fishing, arms and explosives, liquor, mining and quarrying; and 
the production of electricity. Reservations include measures such as  nationality or residency 
requirements  and time-bound licence requirements.  
4.4  Liberalization commitments  
4.30.   For all services sectors except for the cross border supply of financial services, the Agreement 
uses a negative list approach for scheduling liberalization commitments.  
4.31.   Accordingly, Articles 10 .6 and 9.13 provide for both standstill and ratchet provisions, with the 
following non -conforming measures constituting exceptions to the disciplines in sub -sections 4.3.2 -
4.3.5 above : 
a. existing measures as well as their continuation, renewal or modificatio n, provided their 
level of non -conformity is not increased and they were listed in Annex I as measures at 
the central level of government.  
b. existing non -conforming measures applied at the regional level of government;  
c. existing and future measures in sector s, subsectors or activities listed in Annex II.  
4.32.   For financial services, a hybrid approach is used. Liberalization commitments are scheduled 
on the basis of a positive list of activities covered  and permitted under terms and conditions of 
national treatment  (Annex 11 -A on cro ss-border trade), subject to non -conforming measures along 
the lines described in the above paragraph. More specifically:  
a. the Parties' sectoral coverage in Annex 11 -A is broader than under the GATS 
Understanding on Commitments in Financ ial Services (hereafter "the Understanding"), 
since it also include s insurance intermediation; life insurance remains however carved out 
from the Agreement; and  
b. existing non -conforming measures are listed in Section A of Annex III, while future 
measures – for all Parties except Nicaragua and Panama - are included in Section B.  WT/REG452/1 /Rev.1  
 
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  4.33.   This Section summarizes the Parties ' commitments19 while comparing  them to those under 
the GATS. Two tables, presenting respectively horizon tal and sectoral reservations, summarize each 
Party's liberalization. Comparisons provided in the sectoral tables reflect commitments in the 
Agreement and the GATS for modes 1 -3 and exclude those under mode 4 and horizontal 
reservations.  
4.34.   Three Annex II reservations are common to all the Parties to the Agreement thus carving out 
all related services sectors from the coverage of the Agreement:  
a. for social services: law enforcement and correctional services, and the following social 
services to the extent they are established or maintained for a pub lic purpose: income 
security or insurance, social security or insurance, social welfare, public education, public 
training, health, and child care;20  
b. for international agreements, grandfathering trade in services agreements in force prior 
to the conclusio n of the Agreement and carving out any future agreement covering 
aviation, fisheries and maritime matters. Some Parties have extended this exemption to 
other sectors; and  
c. minority affairs/disadvantaged groups, allowing the Parties to adopt or maintain any  
measure that grants rights or preferences to disadvantaged social or economic groups or 
native groups.  
4.35.   Some Parties have a public services/utility reservation requiring a concession and/or authorize 
State monopol ies in  sectors such as the environment, pos tal, or transport  services . Some 
reservations are of a cross -sectoral nature - production and distribution of energy, petroleum and 
fisheries.21 To the extent possible, these are reflected in the sectoral tables.  
4.4.1   Korea  
4.36.   The GATS mode 3 horizontal limitatio n on the acquisition of outstanding stocks and bonds of 
existing domestic companies has been replaced, under the Agreement, by an Annex II privatization 
reservation and by sector -specific limitations in Annexes I and II. The minimum threshold for FDI  
was also lifted . New horizontal measures include  the maintenance of public order,22 limitations on 
possible future privatization and social services for public purpose s. The MFN reservation for 
international agreements is extended to also cover railroad t ransportation as well as 
telecommunication services in trade with El Salvador. Moreover, Korea reserves the right to adopt 
market access limitations not inconsistent with its obligations under GATS  Article  XVI as set out in 
its WTO Schedule of Specific Com mitments. All horizontal reservations are listed in Table 4.1. 
Table 4.1 Korea: Horizontal reservations, Annex II  
No. Subject  Type  GATS  Reservation  
(Y/N, 
Mode)  NT MFN MA LP PR SMBD  
Annex II          
1 Maintenance of public order  I Ya       
2 Privatization of SOEs and public services   S&I Yb (3)       
3 Land acquisition  I Y (3)       
5 Disadvantaged Groups  S&I N       
 
19 Based on the GATS  Services Sectoral Classification, document MTN.GNS/W/120.  In cases where t he 
Parties have classifie d sectors differe ntly from the GATS  classification , the general approach taken was to 
allocate these in accordance with the GATS classification . 
20 For Costa Rica and Honduras this reservation has a wider scope.  
21 In this document, reservations related to energy as well as petroleum related services have been 
reflected under : 1-Business services: services incidental to mining and services incidental to energy 
distribution; 4-Distribution services: wholesale trade services and retailing services; and 11 -Transport services: 
pipeline transport and storage and warehouse services in services auxiliary to all modes of transport.  
Reservations related to  fisheries have been reflected in 1-Business services: services incidental to  fishing.  
22 Article 23 of the Agreement and GATS Articles XIV and XIV bis are of relevance . WT/REG452/1 /Rev.1  
 
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  No. Subject  Type  GATS  Reservation  
(Y/N, 
Mode)  NT MFN MA LP PR SMBD  
7 Social services  S&I N       
8 Limitations not inconsistent with GATS 
schedule  S Y (1 -
4)+       
9 International agreements  S&I         
a GATS Article XIV and XIV bis are of relevance . 
b General limitation on all foreign investment.  
I Investment.  
LP Local presence.  
MA Market access.  
MFN Most-favoured nation.  
NT National treatment.  
PR Performance requirements  
S Services.  
SMBD  Senior managers and Board of directors.  
Note:  Reservations to the Agreement's specific disciplines are indicated in grey.  
Source:  Draft Consolidated GATS Schedule of Specific Commitments (S/DCS/W/KOR/Rev.1) and Korea's 
Schedules annexed to the Agreement.  
 
4.37.   Sectoral commitments under the Agreement and the GATS (modes 1 -3 horizontal 
reservations excluded) are presented in Table 4.2. The paragraphs that follow highlight liberalization 
applying at the c entral level of government in some sectors.  
Table 4.2 Korea: Commitments under the Agreement and the GATS (modes 1 -3) 
Sectors  GATS  Agreement  
Commit -
ments  Reservations  
Existing  
(Ann. I)  Future  
(Ann. II)  
1. Business services      
A. Professional  Services  Partial  Partial  6, 21-28, 37  32, 33  
B. Computer  and Related  Services  Full Fulla  (6a) 
C. Research  and Development  Services  Partial  Partial  20  
D. Real  Estate  Services  --- Partial  17 21 
E. Rental/Leasing  Services  without  Operators  Partial  Partial  2, 3, 13, 18, 19   
F. Other  Business  Services  Partial  Partial  2, 3, 5, 13, 18, 29 -
31, 41, 42, 44, 45  11, 13, 22 -
26, 33  
2. Communication services      
A. Postal  services  --- Partial   16 
B. Courier  services  --- Partial  15  
C. Telecommunication  services  Partial  Partial  16 18 
D. Audiovisual  services  Partial  Partial  46 17-20, 29  
E. Other  --- Full   
3. Construction and related engineering services  
A. General construction work for buildings  Partial  Partial  1  
B. General construction work for civil 
engineering  Partial  Partial  1, 9  
C. Installation and assembly work  Partial  Partial  1, 9  
D. Building completion and finishing work  Partial  Partial  1  
E. Other  Partial  Partial  1  
4. Distribution services      
A. Commission  agents'  services  Partial  Partial   12 
B. Wholesale  trade services  Partial  Partial  2-4, 7, 32, 43 -45 4, 11, 12  
C. Retailing  services  Partial  Partial  2-4, 7, 8, 32, 43 -45 4, 11, 12  
D. Franchising  Partial  Full   
E. Other  --- Full   WT/REG452/1 /Rev.1  
 
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  Sectors  GATS  Agreement  
Commit -
ments  Reservations  
Existing  
(Ann. I)  Future  
(Ann. II)  
5. Education services      
A. Primary education services  --- Partial   27 
B. Secondary education services  --- Partial   27 
C. Higher education services  --- Partial  34 27 
D. Adult education  --- Partial  35 27 
E. Other education services  --- Partial  36 27 
6. Environmental services      
A. Sewage services  Partial  Partial  38 10 
B. Refuse disposal services  Partial  Partial  38 10 
C. Sanitation and similar services  --- Partial  38 10 
D. Other  Partial  Partial  38 10 
7. Financial servicesb     
A. All insurance  and insurance -
related  services  Partial  Partial  III-A.1-2 III-B.14 
B. Banking  and other  financial  services  Partial  Partial  III-A.3-13 III-B.15-17 
C. Other  --- Partial    
8. Health related and social services      
A. Hospital services  --- ---  28 
B. Other Human Health Services  --- ---  28 
C. Social Services  --- ---   
D. Other  --- ---   
9. Tourism and travel related services      
All sub -sectors A -C Partial  Full   
D. Other  --- Full   
10. Recreational, cultural and sporting services  
A. Entertainment  services  --- Partial  39  
B. News agency services  --- Partial  40  
C. Libraries, archives, museums and other 
cultural services  --- Partial   29 
D. Sporting and other recreational services  --- Partial   30, 31  
E. Other  --- Partial    
11. Transport services      
A. Maritime Transport Services  Partial  Partial  11 34 
B. Internal Waterways Transport services  --- ---  14 
C. Air  Transport  Services  Partial  Partial  12, 13, 33   
D. Space  Transport services  --- ---  14 
E. Rail  Transport  Services  --- Partial  9  
F. Road  Transport  Services  Partial  Partial  10, 14  14 
G. Pipeline  Transport services  --- Partial  45 11 
H. Services  auxiliary  to all modes  of transport  Partial  Partial  9, 11 15 
I. Other  Transport  Services  Partial  Full   
12. Other services n.i.e.  --- Full   
a Service supplied in the exercise of governmental authority, which is excluded from the Agreement's 
scope. The reservation is thus not relevant for this table and the sub -sector is thus fully liberalized. 
[KOREA: Please confirm that this qualifies as a Serv ice supplied in the exercise of 
governmental authority]  
b Existing measures are listed in Section A of Annex III, future measures in Section B of Annex III.  
Full No sector -specific limitation/reservation and all sub -sector covered.  
n.i.e. Not included els ewhere.  
Partial  Sector -specific limitations/reservations or not all sub -sector covered.  
--- No commitments.  
Note:  Excludes horizontal reservations and mode 4.  
Source:  As table above.  
 WT/REG452/1 /Rev.1  
 
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  4.38.   Collectively, commitments undertaken improve those made under the GATS . Full 
commitments are taken in  computer  and related  services; other communication services; 
franchising; other distribution services; all tourism and travel related services;23 other  transport  
services; and other services n.i.e.  
4.39.   In business services, Korea improved its commitments while maintaining numerous 
limitations. The establishment of foreign legal consultant (FLC) offices, for which it has no GATS 
commitments , is subject to progressive opening but certain limitations remain. There are also 
limitations for various other professional services - e.g. patent attorneys, auditing  (both not 
committed under the GATS) and  accounting ; overall however commitments on professional services 
are improved as compared to those under the GATS . The only health -related business service subject 
to limitations concern s veterinar y services , and a number of limitations apply to engineering and 
architectural services. Leasing and repair of various types of equipment (for construction, cars, 
medical devices  etc) require local presence. An Annex II reservation on computer services authorizes 
Korea to adopt any measure in relation to state -owned information systems.24 
4.40.   In communications, some commitments are made on non -monopoly postal services. Korea 
has liber alized the conditions of ownership of KT Corporation and other facilities -based suppliers of 
public telecommunications services compared to its GATS schedule. In audiovisual services, sectoral 
coverage is wider than in its GATS schedule but numerous limita tions apply in Annex II. For example, 
subscription -based video services are carved out through an Annex II reservation, MFN exemptions 
for co -production arrangements, and carving out the promotion of and post -production services of 
motion pictures etc.  
4.41.   In construction and related engineering services, GATS commitments require a compulsory 
subcontract or joint ventures. Under the Agreement, the only mode 3 limitation concerns an 
establishment requirement . Services related to construction equipment (rental, repair, sale etc) are 
also subject to the same requirement. Rail construction services are reserved for the government ; 
these are not committed under the GATS . The GATS limitation on licensing and contract limits are 
lifted.  
4.42.   There are partial commitments on distribution services under the GATS ; in particular, 
restrictions apply to distribution of agricultural, fishery and livestock products . Under the Agreement, 
the scope of  such limitations  has been narrowed to apply only on wholesale and retail distribut ion of 
tobacco and liquor . GATS establishment requirements included economic needs test or joint 
ventures, while under the Agreement establishment requirements for wholesale and retail only 
applied to a range of products (e.g.  construction material, used c ars, pharmaceuticals, drugs, food 
supply). National treatment limitations apply with respect to distribution services related to 
publications, agriculture and livestock. A broad  Annex II reservation authorizes Korea to adopt or 
maintain measure s with respe ct to commission agent services, wholesaling (including importation) 
and retailing with respect to various agricultural products including rice. The distribution, generation, 
sale, and transmission of energy – gas and electric - are subject to foreign equi ty limitations under 
Annex I, while an Annex II reservation carves out atomic energy from the Agreement. The 
distribution of arms, explosives and similar items is also restricted.  
4.43.   Educational services, not committed under the GATS, is partially opened for higher education 
(subject to a nationality requirement for the board of directors), adult education (subject to 
restrictions on the number of participants and length of courses) and vocational training (subject to 
a local presence requirement). Nonetheless , Korea has scheduled a broad reservation on the right 
to adopt or maintain any measure with respect to pre -primary, primary, secondary, and other 
education, as well as some aspects of higher and adult educational services.  
4.44.   In environmental services, GATS  quotas on sewage and disposal services have been removed, 
but the GATS establishment requirement continues to apply. Local presence is required for various 
environmental services. Under an Annex II reservation Korea reserves the right to adopt or maintain  
any measure with respect to a broad range of environmental services such as treatment and supply 
 
23 It has scheduled a measure in Annex II under recreational services reserving the right to adopt or 
maintain any measure with respect to tourism in rural, fishery, and agricultural services.  
24 Since this involves services supplied in the exercise of governmental authority , which is excluded from 
the Agreement's scope , the reservation is not relevant for this table and the sub -sector is thus fully liberalized.  WT/REG452/1 /Rev.1  
 
- 34 - 
 
  of potable water, collection and treatment of municipal refuse and sewage, and sanitation and similar 
services. Contracts between private parties are however not affected by this reservation.  
4.45.   In financial services, the scope of Korea's commitments goes beyond the GATS Understanding 
with the addition of liberalization of insurance intermediation services. The commitments themselves 
are broader than those in its GATS schedule (where, for example, mode 2 in life and non -life 
insurance and insurance broking and agency businesses is unbound). Korea has listed a  number of 
non-conforming measures applicable to the financial services sector, including an equity ceiling on 
ownership of commercial banks in Korea  – though with higher ceilings than under the GATS , 
limitations on branching for certain financial entities  – generally in line with the GATS requirements , 
and special treatment for government -sponsored institutions  – which were not committed under the 
GATS . For the securities industry, certain functions are reserved for the Korea Securities Depository. 
In portfolio management, Korea allows a financial institution organized outside its territory to provide 
investment  advice and portfolio management services to the manager of a collective investment 
scheme located in its territory, provided that the scope of the services does not include trustee 
services, custodial services and execution services not related to managin g a collective investment 
scheme.  
4.46.   Health related and social services are uncommitted in Korea's GATS schedule. Under the 
Agreement, Korea maintains the horizontal reservation on social services and reserves the right to 
adopt or maintain any measure regar ding human health services; all sectors are thus uncommitted.  
4.47.   Recreational, cultural and sporting services, uncommitted in Korea's GATS schedule, remain 
subject to a wide range of restrictions under the Agreement: public performances by foreigners 
require  a recommendation from the Korea Media Rating Board; news agency services, and publishing 
of periodicals (excluding newspapers), are subject to various limitations including nationality 
requirements. Under future measures, Korea reserves the right to adopt  or maintain any measure 
with respect to conservation and restoration of cultural heritage and properties, and with respect to 
tourism in rural, fishery, and agricultural sites. Betting is fully excluded from any liberalization.  
4.48.   Air, maritime and railroad transport services are covered by the horizontal reservation for 
international agreements. In maritime transport, an Annex II reservation carves out international 
maritime passenger transportation services, maritime cabotage, and the operation of Korean 
vessels. Other maritime related services require the establishment of a company, and marine 
pilotage services are reserved for nationals. In internal waterways, and space transportation, 
uncommitted in its GATS schedule, Korea reserves the right to adopt or maintain any measure. The 
supply of rail transportation services, uncommitted in the GATS, is subject to authorization based 
on an economic needs test. Limitations on national treatment and senior managers apply for air 
transport services, while local pres ence is required for repair and maintenance services. In road 
transportation services, Korea reserves the right to adopt or maintain any measure with respect to 
taxi services, scheduled passenger road transportation services and freight road transportation  
services, thus liberalizing other subsectors of road transport. Services auxiliary to all modes of 
transport and other transport services (except storage and warehousing services related to 
agricultural and livestock) have been liberalized under the Agree ment.  
4.4.2   Central American Parties  
4.49.   The GATS commitments of Central American Parties  are limited. Given the wider scope of the 
Agreement as compared to the GATS, these countries have listed a number of new horizontal 
reservations in their Annexes I and II. The scope and depth of their commitments under the 
Agreement significantly increases liberalization in favour of Korean suppliers.  
4.50.   Certain Central American Parties had listed in their GATS Schedules a number of restrictions 
concerning taxation. These horizont al measures are not included in their Annexes in particular given 
that tax conventions are carved out from the Agreement.  
4.4.2.1   Costa Rica  
4.51.   In the explanatory note to its Schedule, Costa Rica specifies that the extraction of natural 
resources - including mining and hydrocarbons, electricity generation, refining of crude oil and its 
derivatives, hunting, forestry, logging and fishing shall not be considered as services for the purposes WT/REG452/1 /Rev.1  
 
- 35 - 
 
  of the Agreement.25 Annex II reservation on natural resources carves out the sector by authorizing 
any measure including conservation, management, protection, exploration, extraction and 
exploitation.  
4.52.   Costa Rica's horizontal reservations listed in Annexes I and II are summar ized in Table 4.3. 
The same GATS limitation regarding foreign investment in coastal areas is included in the 
Agreement. Other reservations include e.g. non-conforming requirements for concessions for public 
works, limitations on domestic sale s of goods  and services  produced in free zones, State ownership 
(or concessions) of natural resources  and exemptions for transport infrastructure (such as ports and 
airports). The social service reservation has a wide scope and also includes public sewage services, 
and water supply services.  
Table 4.3 Costa Rica: Horizontal reservations  
No Subject  Type  GATS  Reservation  
(Y/N, 
Mode)  NT MFN MA LP PR SMBD  
Annex I          
1  Branches  S N        
2 Coastal area  S&I N          
3 Concessions of public works  S&I           
10 Free zones  I N        
   In the Explanatory note          
§8 Extraction of n atural resources , electricity 
generation, refining of crude oil and its 
derivatives, hunting, forestry, logging and 
fishinga  S&I N       
Annex II          
1 International agreements  S&I Y        
3 Social services (wide scope)  S&I N       
4 Public services (including SOEs)  S&I N       
7 Minority Affairs and Native Groups  S&I N       
11 Transport infrastructure (railways, ports, 
airports)  S&I N       
12 Natural resources  S&I N       
a Not a reservation per se (see paragraph 4.51.   above ). 
Note:  Abbreviations in accordance with those of Table 4. 1. 
Source:  Costa Rica's GATS Dra ft Consolidated Schedule of Specific Commitments (S/DCS/W/CRI) and its 
Schedules annexed to the Agreement.  
4.53.   Sectoral commitments under the Agreement and the GATS (modes 1 -3 horizontal 
reservations excluded) are presented in Table 4.4. The paragraphs that f ollow highlight liberalization 
applying at the central level of government in some sectors.  
Table 4.4 Costa Rica: Commitments under the Agreement and the GATS (modes 1 -3) 
Sectors  GATS  Agreement  
Commit -
ments  Reservations  
Existing  
(Ann. I)  Future  
(Ann. II)  
1. Business services      
A. Professional  Services  Partial  Partial  4  
B. Computer  and Related  Services  Partial  Partial  4  
C. Research  and Development  Services  --- Partial  9  
 
25 For the sake of completeness, the se are also reflected in the corresponding tables of horizontal 
measures.  WT/REG452/1 /Rev.1  
 
- 36 - 
 
  Sectors  GATS  Agreement  
Commit -
ments  Reservations  
Existing  
(Ann. I)  Future  
(Ann. II)  
D. Real  Estate  Services  --- Full   
E. Rental/Leasing  Services  without  Operators  Partial  Full   
F. Other  Business  Services  --- Partial  4, 9, 19 2, 10, 13, 17, 18 
2. Communication services      
A. Postal  services  --- Partial   15 
B. Courier  services  --- Full   
C. Telecommunication  services  --- Partial  18  
D. Audiovisual  services  --- Partial  19 2, 16 
E. Other  --- Full   
3. Construction and related engineering services  
Sub-sectors A , C-E --- Full   
B. General construction work for civil 
engineering  --- Partial  12  
4. Distribution services      
A. Commission  agents'  services  --- Full   
B. Wholesale  trade services  --- Partial  13, 14, 15  2, 10, 18  
C. Retailing  services  --- Partial  14, 15, 20 2, 10, 18  
D. Franchising  --- Full   
E. Other  --- Full   
5. Education services      
A. Primary education services  Partial  ---  5 
B. Secondary education services  Partial  ---  5 
C. Higher education services  Partial  ---  5 
D. Adult education  --- Partial   5 
E. Other education services  --- ---  5 
6. Environmental services      
All sub -sectors A -D --- ---  14 
7. Financial servicesa     
A. All insurance  and insurance related  services  --- Partial  III-A1.6 III-B.8 
B. Banking  and other  financial  services  Partial  Partial  III-A.1-5 III-B.8 
C. Other  --- Partial   III-B.7-8 
8. Health related and social services      
A. Hospital services  Partial  ---  6 
B. Other Human Health Services  --- ---  6 
C. Social Services  --- ---  6 
D. Other  Partial  ---  6 
9. Tourism and travel related services      
A. Hotels  and restaurants (incl. catering)  Partial  Partial  20  
B. Travel  agencies  and tour operators  services  Partial  Partial  7  
C. Tourist  guides  services  Partial  Partial  6  
D. Other  Partial  Partial  12  
10. Recreational, cultural and sporting services  
A. Entertainment  services  --- Partial  19 2, 20 
B. News agency services  --- Partial  4, 11 2 
C. Libraries, archives, museums and other 
cultural services  --- Partial  4 2 
D. Sporting and other recreational services  Partial  Partial  9, 12 8, 9 
E. Other  --- Partial   20 
11. Transport services      
A. Maritime Transport Services  --- Partial  16  
B. Internal Waterways Transport services  --- Partial  12, 16  
C. Air  Transport  Services  --- Partial  17  
D. Space  Transport services  --- Full   WT/REG452/1 /Rev.1  
 
- 37 - 
 
  Sectors  GATS  Agreement  
Commit -
ments  Reservations  
Existing  
(Ann. I)  Future  
(Ann. II)  
E. Rail  Transport  Services  --- Partial    
F. Road  Transport  Services  --- Partial  5  
G. Pipeline  Transport services  --- Partial   10 
H. Services  auxiliary  to all modes  of transport  --- Partial  8 10 
I. Other  Transport  Services  --- Full   
12. Other services n.i. e. --- Full   
a Existing measures are listed in Section A of Annex III, future measures in Section B of Annex III.  
Note:  Excludes horizontal reservations and mode 4.  
 Definitions in accordance with those of Table 4. 2. 
Source:  As table above.  
 
4.54.   The c ommitments improve those made under the GATS. Full commitments are made for  real 
estate  services; rental/leasing  services  withou t operators; courier  services; other communication 
services; construction and related engineer ing services; commission  agents'  services; franchising; 
other distribution services; space  transport services; and other  transport  services.  
4.55.   Costa Rica has listed  a number of cross -sectoral reservations in its Annex II:  
a. cultural industries - audiovisual and recreational and cultural services such as services 
related to books and music - are exempted from MFN and performance requirements 
obligation s (reservation 2);  
b. electric energy services, including e.g. generation and distribution (reservation 10),  
c. the social services reservation is combined with Annex II sector -specific reservations 
limiting Korea 's services suppliers and investors as follows:  
i. education services remain largely reserved for nationals; only adult distance 
education not conferring academic credits or degrees has been fully liberalized. 
All other education services are subject to an Annex II reservation allowing the 
State t o take any measure with respect to the sector except adult distance 
learning. This contrasts with the GATS, under which partial commitments are 
made for primary, secondary and higher education services;  
ii. all environmental services, in accordance with Annex  II reservations on 
environmental , social service s and public utilities, remain closed. However, 
concessions may be granted for such services, which may also be provided by 
SOEs or be subject to a State monopoly;  
iii. human health services, partially committed under the GATS, are closed to Korea 
due to an Annex II sectoral reservation.  
4.56.   On business services, professional services – not committed under the GATS – have been 
opened up while remaining subject to a number of reservations including reciprocity, mandat ory 
social service and local presence requirements, depending on the sub -sector. Services related to 
fishing as well as investigation and security are carved out from the application of certain obligations 
of the Agreement , as described in Annex II .  
4.57.   On co mmunication services, for which Costa Rica has no GATS commitments, universal postal 
services remain reserved for the State. Wireless telecommunication and audiovisual services are 
subject to various limitations, including the need for a concession and eco nomic needs tests. A 
concession is also needed for traditional telephone services. As regards radio and television services, 
a broad reservation carves out the sector from several of the Agreement's disciplines , as described 
in Annex II .  WT/REG452/1 /Rev.1  
 
- 38 - 
 
  4.58.   Costa Rica has no  commitments in distribution services in the GATS whilst this sector  is fully 
liberalized in the Agreement save for some products : crude oil and its derivatives (state monopoly 
on importation and wholesale distribution), retail and wholesale distribution o f pharmaceuticals, 
biomedical equipment and materials, cultural goods, electrical energy, arms and explosives, and the 
retail sale of alcoholic beverages (market access limitations requiring a license).  
4.59.   Financial services are partially committed under the GATS. Under the Agreement, the scope 
of Costa Rica's commitments goes beyond the GATS Understanding with the addition of liberalization 
of insurance services necessary to support global accounts, insurance intermediation and surplus 
lines. Under the Agreem ent's Annex III -B Costa Rica has listed an MFN reservation on the financial 
sector and require s incorporation of institutions other than banks and insurance. Pension funds and 
other social insurance are subject to the social services reservation. On insura nce and reinsurance -
related services, reservations provide for the incorporation of companies other than of insurance 
and reinsurance, prohibit doing business and solicit ing by representative offices; and  establish that 
the State guarantees the insurance activity of the insurance SOE . The banking sector remains subject 
to various limitations; they involve in particular the presence of State Banks  and non -State banks 
of Public Law , market access limitations and MFN exemptions.  
4.60.   Costa Rica has liberalized tou rism and travel -related services under the Agreement, with the 
exception of limitation s on the number of travel agencies, restrictions relating to rural community 
tourism by granting of incentives for tourism development, a nationality or residency require ment 
for tourist guides , and restrictions related to marinas . This improves upon its GATS commitments, 
which are often unbound, for example as regards hotel services under mode 3 or travel agency 
services under mode 1. Finally, hotels and restaurants remai n subject to limitations on the sale of 
alcoholic beverages.  
4.61.   Beyond the cultural reservation, recreational, cultural and sporting services, for which there 
are no GATS commit ments , are opened up subject to a few restrictions on news agencies , libraries, 
marina services and recreational fishing. Lottery, betting and gambling remain closed to Korean 
suppliers, while cross -border trade in gam ing services may remain subject to market access 
limitations. A reservation also applies to marketing and p ost-production services of motion 
pictures.26  
4.62.   Transport services, for which Costa Rica has no GATS commitments, is partially liberalized, 
with the horizontal transport infrastructure and public service reservations representing carve outs.  
Water transport  services remain subject to some reservations on e.g. registration, trade and tourism 
restrictions to  domestically -registered vessels, local presence for foreign owned vessels, and a 10% 
nationals threshold for the crew. A number of existing non -conforming  measures also relate to road 
transport of freight; services auxiliary to transport and customs brokers (nationality and local 
presence requirements); air transport and specialty air services. Nationality requirements apply for 
senior management and boards  of directors  in road freight transportation . 
4.4.2.2   El Salvador  
4.63.   El Salvador's  GATS wide restrictions on foreign investment (e.g. local presence, maximum 
transfer of gains), the 20% tax on foreigners without local presence and the reserv ation for  senior 
positions  of small -scale enterprises for nationals have been lifted. The other GATS reservations on 
small -scale trade have been maintained in the Agreement. A series of more focused limitations 
apply, as indicated in Table 4. 5. Foreign investment , including rural o wnership of land , is subject to 
a reciprocity requirement, except for land used for industrial plants. A national treatment reservation 
on investment requires that at least 75% of the partners in cooperative production societies be 
Salvadoran. The 90% thre shold o n national personnel in the GATS has been kept but the 85% wage 
threshold has been lifted. The MFN reservation for international agreements is extended to cover 
railroad transportation as well as telecommunication services vis-à-vis Korea.  
 
26 This also affects in part other business services.  WT/REG452/1 /Rev.1  
 
- 39 - 
 
  Table 4.5 El Salvador: Horizontal reservations, Annexes I and II  
No. Subject  Type  GATS  Reservation  
(Y/N, 
Mode)  NT MFN MA LP PR SMBD  
Annex I          
6 Rural land ownership on the basis of 
reciprocity  I Y        
7 Personnel  S Y (4)       
8 Cooperative productions societies  I N          
12 Small -scale trade reserved to nationals and 
CA nationals  I Y (3-4)        
Annex II          
2 Social services  S&I N       
3 Minority Affairs  S&I N       
7 International agreements  S&I Y        
Note:  Abbreviations in accordance with those of Table 4. 1. 
Source:  El Salvador's GATS Draft Consolidated Schedule of Specific Commitments (S/DCS/W/SLV) and its 
Schedules annexed to the Agreement.  
4.64.   Sectoral commitments under the Agreement and the GATS (modes 1 -3 horizontal 
reservations excluded) are presented in Table 4.6. The paragraphs that follow highlight liberalization 
applying at the central level of government in some sectors.  
Table 4.6 El Salvador: Commitments under the Agreement and the GATS (modes 1 -3) 
Sectors  GATS  Commit -
ments  Reservations  
Existing  
(Ann. I)  Future  
(Ann. II)  
1. Business services      
A. Professional  Services  Partial  Partial  10 5 
B. Computer  and Related  Services  Partial  Full   
C. Research  and Development  Services  --- Full   
D. Real  Estate  Services  --- Full   
E. Rental/Leasing  Services  without  Operators  Partial  Full   
F. Other  Business  Services  Partial  Partial   8, 13, 16, 18  
2. Communication services      
A. Postal  services  --- ---  1 
B. Courier  services  --- Full   
C. Telecommunication  services  Partial  ---  9 
D. Audiovisual  services  --- --- 9, 13 15 
E. Other  --- Full   
3. Construction and related engineering services  
All sub -sectors A -E  --- Partial   6 
4. Distribution services      
A. Commission  agents'  services  --- Full   
B. Wholesale  trade services  --- Partial   10, 12, 13, 18  C. Retailing  services  --- Partial  1 
D. Franchising  --- Full   
E. Other  --- Full   
5. Education services      
All sub -sectors A -E --- ---  14 
6. Environmental services      
Sub-sectors A -B-C --- Full   
D. Other  Partial  Full   
7. Financial servicesa     WT/REG452/1 /Rev.1  
 
- 40 - 
 
  Sectors  GATS  Commit -
ments  Reservations  
Existing  
(Ann. I)  Future  
(Ann. II)  
A. All insurance  and insurance -
related  services  --- Partial  III-A.1, 5, 6  III-B.12 
B. Banking  and other  financial  services  Partial  Partial  III-A.2-6 III-B.7-9, 11, 13  
C. Other  --- Partial  III-A.5-6 III-B.10  
8. Health related and social services      
A. Hospital services  --- ---  11 
B. Other Human Health Services  --- ---  11 
C. Social Services  --- ---   
D. Other  --- ---   
9. Tourism and travel related services      
Sub-sectors A -B-C Partial  Full   
D. Other  --- Full   
10. Recreational, cultural and sporting services  
A. Entertainment  services  --- Partial  2, 3, 4  16 
B. News agency services  --- Full   
C. Libraries, archives, museums and other 
cultural services  --- Partial   16 
D. Sporting and other recreational services  --- Partial   16 
E. Other  --- Full   
11. Transport services      
A. Maritime Transport Services  --- Partial  11  
B. Internal Waterways Transport services  --- Full   
C. Air  Transport  Services  Partial  Partial  5  
D. Space  Transport services  --- Full   
E. Rail  Transport  Services  --- Partial   4 
F. Road Transport  Services  --- Partial   4 
G. Pipeline  Transport services  --- Partial   13 
H. Services  auxiliary  to all modes  of transport  --- Partial   4, 13 
I. Other  Transport  Services  --- Full   
12. Other services n.i.e.   --- Full   
a Existing measures are listed in Section A of Annex III, future measures in Section B of Annex III.  
Note:  Excludes horizontal reservations and mode 4.  
 Definitions in accordance with those of Table 4. 2. 
Source:  As table above.  
 
4.65.   El Salvador has listed a number of cr oss-sectoral reservations in its Annex II:  
a. creative/cultural industries – other professional services and recreational and cultural 
services, such as services related to books and music, photography, video games - are 
exempted from MFN, national treatment,  market access and local presence obligations 
(reservation 16);  
b. electric energy services, including e.g. generation and distribution (reservation 13); and  
c. the horizontal social services reservation (number 2) combined with Annex II reservations 
on health and education services (reservations 11 and 14) carves out all of these sectors 
from liberalization.  
4.66.   El Salvador has also listed in Annex  II reservations for non-services aspects of certain sectors 
–manufacturi ng of liquor is exempted from performance requirement obligations, while mining and 
quarrying is fully carved -out.  
4.67.   The following are fully liberalized under the Agreement : computer  and related  services; 
research  and development  services; real  estate  services; rental/leasing  services  without  operators; 
courier  services; other communication services; commission  agents'  services; franchising; other WT/REG452/1 /Rev.1  
 
- 41 - 
 
  distribution services; all e nvironmental services; all tourism and travel related services; news agency 
services; other recreational; cultural and sporting services; internal waterways transport services; 
space  transport services; other transport services ; other services n.i.e.  
4.68.   Liberalization for business services is improved under the Agreement as compared to the 
GATS, except for professional services, where an Annex II reservation carves out the sub -sector 
from the Agreement's disciplines. In other business services, restrictions ap ply only as regards 
private security services, services related to energy distribution and mining, cultural -related sub -
sectors (e.g. photographic services); under the GATS, commitments in this sub -sector were only 
taken for certain advertising services  
4.69.   In communication services, Annex II reservations on postal, telecommunications and 
audiovisual services carve out these sub -sectors from liberalization.  
4.70.   In distribution services, restrictions apply to the wholesale and retail trade of products of the 
petro leum, pharmaceutical and energy industries. In addition,  El Salvador reserve s the right to 
maintain a measure enabling  only nationals and enterprises majority -owned by nationals to establish 
duty-free commercial centres or establishments in El Salvador's seaports.  
4.71.   On financial services, the scope of El Salvador's commitments goes beyond the GATS 
Understanding with the addition of brokerage of insurance risks - under the GATS they only cover 
banking and other financial services. All sub -sectors remain , howev er, subject to numerous 
limitations, including foreign equity limitations for insurance companies and banks, and nationality 
and/or residency requirements for foreign exchange offices and institutions managing pension funds, 
incorporation of companies in El Salvador – including all foreign financial institutions other than 
those seeking to operate as banks or insurance companies. For many of the limitations, nationals of 
all Central American countries are assimilated with Salvadorians. Reservations for futu re measures 
carve out information services of credit data history, management of mutual funds, providers of 
electronic money, securities market services, and pension fund services from the scope of the 
Agreement. Limitations on lending also authorize El Sa lvador to take any measure in relation with 
the establishment of maximum interest rates to avoid usury.  
4.72.   On recreational, cultural and sporting services, beyond Annex II cultural reservation s referred 
to above, El Salvador has also taken reservations for ex isting measures related to the performing 
arts and circuses; these involve authorization, payment of  fees to corresponding trade unions and 
associations  and mandatory participation by Salvadorian nationals.  
4.73.   With respect to transport services, El Salvador u ndertook commitments going significantly 
beyond its GATS commitments in the sector, which are limited to maintenance and repair services 
for aircraft. Existing non -conforming measures relate to reciprocity requirements for permits and 
licenses of certain a ir transport staff as well as national treatment and local presence limitation as 
regards maritime transport services. Land transportation services – road, rail and their auxiliary 
services – remain reserved to Salvadorians. Pipeline transport services are  also fully excluded given 
the energy -related reservations.  
4.4.2.3   Honduras  
4.74.   Compared to the GATS, the horizontal reservation regarding land ownership has been made 
more flexible as it authorizes Korean investors to own/lease land in such areas for tourism or othe r 
economic or social development reasons or public interest, subject to government authorization. 
Limitations on personnel have been made less restrictive: GATS thresholds on the maximum 
percentage of foreign personnel and their wages (10% and 15%, respect ively) may be increased (or 
decreased) under certain specific circumstances,27 with senior management being exempted from 
these ceilings. GATS requirements that senior management speak Spanish, as well as those linking 
foreign establishment to capacity -building of nationals of Honduras, and limiting foreigners in labour 
unions , have been lifted. Compared to the GATS, small -scale trade has been opened up to Koreans 
 
27 Authorised by the Executive authority; the ceiling may be increased by 10% each during a five -year 
period; the ceiling may als o be decreased up to forbidding foreign work.  WT/REG452/1 /Rev.1  
 
- 42 - 
 
  that are naturalized citizens of Honduras on the basis of reciprocity. Other horizontal reserv ations 
have been introduced under the Agreement; they are indicated in Table 4.7.  
4.75.   The MFN reservation for international agreements is extended to also cover railroad 
transportation. The social service reservation has a wide scope and also covers pension fund 
services.  
Table 4.7 Honduras: Horizontal reservations, Annexes I and II  
No. Subject  Type  GATS  Reservation  
(Y/N, 
Mode)  NT MFN MA LP PR SMBD  
Annex I          
1 Ownership/lease of State/common land and 
of land on coastal and border areas  I Y (3)        
2 Personnel  S&I Y (4)       
3 Small -scale trade opened up to naturalized 
citizens on the basis of reciprocity  I Y(3)         
4 Cooperatives – prior authorization required 
on the basis of reciprocity and economics 
needs test  S&I N       
7 Registration required for foreign companies  I N       
29 Privatization of SOEs  I N       
Annex II          
2 Social services  S&I N       
3 Minority Affairs  S&I N       
5 International agreements  S&I Y        
6 Governmental services  S&I N       
Note:  Abbreviations in accordance with those of Table 4. 1. 
Source:  Honduras' GATS Draft Consolidated Schedule of Specific Commitments (S/DCS/W/HND/Rev.1) and 
its Schedules annexed to the Agreement.  
 
4.76.   Sectoral commitments under the Agreement and the GATS (modes 1 -3 horizontal 
reservations excluded) are presented in Table 4.8. The paragraphs that follow highlight liberalization 
applying at the central level of government in some sectors.  
Table 4.8 Honduras: Commi tments under the Agreement and the GATS (modes 1 -3) 
Sectors  GATS  Agreement  
Commitments  Reservations  
Existing  
(Ann. I)  Future  
(Ann. II)  
1. Business services      
A. Professional  Services  --- ---  8 
B. Computer  and Related  Services  Partial  Full   
C. Research  and Development  Services  --- Full   
D. Real  Estate  Services  --- Partial  28  
E. Rental/Leasing  Services  without  Operators  --- Full   
F. Other  Business  Services  Partial  Partial  6, 10, 24  9 
2. Communication services      
A. Postal  services  --- --- 9  
B. Courier  services  --- Full   
C. Telecommunication  services  Partial  Partial  12-14 1 
D. Audiovisual  services  --- Partial  11 11 
E. Other  --- Full   
3. Construction and related engineering services  
A. General construction work for buildings  --- Full   WT/REG452/1 /Rev.1  
 
- 43 - 
 
  Sectors  GATS  Agreement  
Commitments  Reservations  
Existing  
(Ann. I)  Future  
(Ann. II)  
B. General construction work for civil engineering  --- Partial  15  
C. Installation and assembly work  --- Full   
D. Building completion and finishing work  --- Full   
E. Other  --- Full   
4. Distribution services      
A. Commission  agents'  services  --- Partial  8  
B. Wholesale  trade services  --- Partial  8, 10, 16, 23  4 
C. Retailing  services  --- Partial  8, 10, 16, 23   
D. Franchising  --- Partial  8  
E. Other  --- Partial  8  
5. Education services      
A. Primary education services  --- Partial  18  
B. Secondary education services  --- Partial  18  
C. Higher education services  --- Full   
D. Adult education  --- Full   
E. Other education services  --- Full   
6. Environmental services      
All sub -sectors A -C --- --- 22  
D. Other  --- Full   
7. Financial servicesa     
A. All insurance  and insurance -related  services  Partial  Partial  III-A.7  
B. Banking  and other  financial  services  Partial  Partial  III-A.1-6 III-B.8 
C. Other  --- Partial   III-B.9 
8. Health related and social services      
All sub -sectors A -D --- Partial    
9. Tourism and travel related services      
A. Hotels  and restaurants (incl. catering)  Full Full   
B. Travel  agencies  and tour operators  services  Partial  Full   
C. Tourist  guides  services  --- Full   
D. Other  --- Full   
10. Recreational, cultural and sporting services  
A. Entertainment  services  --- Partial  19  
B. News agency services  --- Partial  11  
C. Libraries, archives, museums and other 
cultural services  --- Full   
D. Sporting and other recreational services  --- Partial  20  
E. Other  --- --- 17, 21  10 
11. Transport services      
A. Maritime Transport Services  --- Partial  26  
B. Internal Waterways Transport services  --- Full   
C. Air  Transport  Services  Partial  Partial  25  
D. Space  Transport services  --- Full   
E. Rail Transport  Services  --- Partial  27  
F. Road  Transport  Services  Partial  Partial   7 
G. Pipeline  Transport services  --- Full   
H. Services  auxiliary  to all modes  of transport  --- Partial  5 7 
I. Other  Transport  Services  --- Full   
12. Other services n.i.e.  --- Full   
a Existing measures are listed in Section A of Annex III, future measures in Section B of Annex III.  
Note:  Excludes horizontal reservations and mode 4.  
 Definitions in accordance with those of Table 4. 2. 
Source:  As table above.  
 WT/REG452/1 /Rev.1  
 
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  4.77.   The following are fully liberalized under the Agreement: computer  and related  services; 
research  and development  services; rental/leasing  services  without  operators; courier  services; 
other communication services; all construction  and related engineering services except general 
construction work for civil engineering; higher education services; adult education; other education 
services; other environmental services; all tourism and travel related services; libraries, archives, 
muse ums and other cultural services; internal waterways transport services; space  transport 
services; pipeline  transport services; other  transport  services; and other services n.i.e.  
4.78.   In business services, Honduras expands coverage under the Agreement to all su b-sectors 
except professional services, which remains closed as under the GATS. Real estate services are fully 
liberalized except for warehousing services which require authorization. In other business services, 
Honduras schedules reservations for existing  measures in agricultural (nationality), electrical energy 
(local presence and licence) and investigation and security services (domestic partnership and 
authorization).  
4.79.   In communication services, Honduras continues to reserve the supply of postal services  to 
the government but broadens its commitments in the other subsectors. Honduras does not permit 
the direct participation of foreign governments in the provision of telecommunication services; equity 
limitations apply. In audiovisual services, nationality  by birth28 is required for senior management 
positions in radio and television  while the other sub -sectors (animation, videogames, motion picture 
and videotapes) are excluded from liberalization. Honduras also reserves the right to adopt, maintain 
or modi fy the level of ownership in the national telecommunications company.  
4.80.   In construction and related engineering services, Honduras has made full commitments in all 
subsectors, except in construction or consulting services for civil engineering services which  require 
foreign firms to be organized and registered according to Honduran law. Higher registration fees 
apply to foreign companies and authorization is also required for foreign workers in order to 
participate in such projects.  
4.81.   In distribution services, the cross sectoral energy reservation applies to electric energy 
services, including e.g. generation and distribution. Distribution services for petroleum, weapons 
and other related items are also reserved. Other limitations applying to the sector involve reserving 
licenses for nationals or companies with a maximum of 49% foreign equity; registration is also 
required.  
4.82.   Public education, public health -related and social services are reserved through the horizontal 
social services reservation. Private educatio n services at the preschool, primary, and secondary 
levels are subject to some nationality or reciprocity requirements for school directors, supervisors 
or teachers of certain subjects. Other levels of private education are free. Similarly, private provisi on 
of health -related and social services is free. 
4.83.   In financial services, the scope of Honduras' commitments goes beyond the GATS 
Understanding  on insurance with the inclusion of insurance intermediation. In its Annex III, 
Honduras has scheduled reservations for current measures covering inter alia  requirements 
applicable to banks, exchange bureaux, securities exchanges, fund administration companie s, and 
centralized depositories for the custody, compensation and liquidation of shares. Foreign insurance 
institutions seeking to establish in Honduras are subject to capital requirements. Under future 
measures, Honduras reserves the right to adopt or mai ntain a measure with respect to the provision 
of services by savings and loan cooperatives, and measures requiring the incorporation of foreign 
financial institutions other than those seeking to operate as banks or insurance companies in 
Honduras.  
4.84.   In tran sport services, Honduras has broadened its commitments but maintains reservations 
in air, maritime, land, rail and pipeline transport. In air transport services, public cabotage is 
reserved for Honduran companies while private air speciality services are subject to nationality and 
authorization requirements. Coastal navigation for commercial purposes is generally reserved for 
Honduran vessels. In railways, privatization of the subsidiar y SOEs is reserved for Honduran 
 
28 This is also required for newspapers, as reflected in Sector 10.B . in Table 4.9, News agency services.  WT/REG452/1 /Rev.1  
 
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  nationals and companies, while senior managers must be Honduran by birth. Land transport of 
passengers, freight and related auxiliary services are carved out though an annex II reservation.  
4.4.2.4   Nicaragua  
4.85.   The GATS economic needs test for approval of FDI has been lifted under the Agreement. A 
number of other horizontal limitations, not included in the GATS, are listed in both Annexes; they 
may result from the Agreement's wider scope and coverage. For example, Nicaragua has reserved 
its righ ts to take any measure with respect to coastal lands, islands, and riverbanks in its possession, 
reserved the exploitation of natural resources to the State, limited the number of foreign partners 
in cooperatives, and taken market access exemptions for tra nsport infrastructure such as ports and 
airports.  Horizontal reservations under the Agreement are listed in  Table 4. 9. 
Table 4.9 Nicaragua: Horizontal reservations, Annexes I and II  
No Subject  Type  GATS  Reserv ation  
(Y/N, 
Mode)  NT MFN MA LP PR SMBD  
Annex I          
1 Local presence  S N        
21 Cooperatives – foreign partners  S&I N       
24 Grand Canal of Nicaragua  S&I N         
32 Free-zones and inward -processing regime  I N       
35
44 Transport infrastructure - airports and ports  S N       
38 Local governments procurement  S N       
41 Natural Resources  S N       
Annex II          
1 Privatization of SOEs  S&I N       
2 Minority affairs and indigenous peoples  S&I N       
4 International agreements  S&I N        
5 Costal land & islands ownership/investment - 
Local presence  I N       
6 Social services  S&I N       
7 SMEs  S&I N       
Note:  Abbreviations in accordance with those of Table 4. 1. 
Source:  Nicaragua's GATS Draft Consolidated Schedule of Specific Commitments (S/DCS/W/NIC ) and its 
Schedules annexed to the Agreement.  
 
4.86.   The scope and depth of Nicaragua's commitments under the Agreement significantly increases 
liberalization in favour of Korean  suppliers. Table 4. 10 compares commitments under both 
Agreements (modes 1 -3, horizontal reservations excluded).  
Table 4.10 Nicaragua: Commitments under the Agreement and the GATS (modes 1 -3) 
Sectors  GATS  Agreement  
Commit -
ments  Reservations  
Existing  
(Ann. I)  Future  
(Ann. II)  
1. Business services      
A. Professional  Services  --- Partial  27-30  
B. Computer  and Related  Services  Partial  Full   
C. Research  and Development  Services  Partial  Partial  31  
D. Real Estate  Services  --- Partial  33  
E. Rental/Leasing  Services  without  Operators  --- Full   WT/REG452/1 /Rev.1  
 
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  Sectors  GATS  Agreement  
Commit -
ments  Reservations  
Existing  
(Ann. I)  Future  
(Ann. II)  
F. Other  Business  Services  Partial  Partial  7, 8, 15 -20, 36, 
40, 42  9, 10 
2. Communication services      
A. Postal  services  --- --- 12, 37  8 
B. Courier  services  --- Full   
C. Telecommunication  services  Partial  Partial  11-14, 39  3 
D. Audiovisual  services  Partial  Partial  9, 10  
E. Other  --- Full   
3. Construction and related engineering services  
A. General construction work for buildings  --- Partial  6  
B. General construction work for civil engineering  --- Partial  6  
C. Installation and assembly work  --- Partial  6, 34  
D. Building completion and finishing work  --- Partial  6  
E. Other  --- Partial  6  
4. Distribution services      
A. Commission  agents'  services  --- Full   
B. Wholesale  trade services  --- Partial  7, 15, 16, 36, 40  9-10 C. Retailing  services  --- Partial  
D. Franchising  --- Full   
E. Other  --- Full   
5. Education services      
All sub-sectors A -E --- Full   
6. Environmental services      
A. Sewage services  --- --- 34  
B. Refuse disposal services  --- Full   
C. Sanitation and similar services  --- Full   
D. Other  --- Full   
7. Financial servicesa     
A. All insurance  and insurance -related  services  Partial  Partial  III-A.3  
B. Banking  and other  financial  services  Partial  Partial  III-A.1,2, 4, 5   
C. Other  --- Partial  III-A.2, 4,5   
8. Health related and social services      
All sub -sectors A -D --- Full   
9. Tourism and travel related services      
A. Hotels  and restaurants (incl. catering)  Partial  Partial  3, 5  
B. Travel  agencies  and tour operator services  Partial  Partial  3  
C. Tourist  guides  services  Full Partial  3  
D. Other  --- Partial  3  
10. Recreational, cultural and sporting services  
A. Entertainment  services  --- Partial  2, 5  
B. News agency services  --- Full   
C. Libraries, archives, museums and other 
cultural services  --- Full   
D. Sporting and other recreational services  --- Full   
E. Other  --- Partial  4, 5, 43   
11. Transport services      
A. Maritime Transport Services  --- Partial  23  
B. Internal Waterways Transport services  --- Full   
C. Air  Transport  Services  Partial  Partial  25, 26,   
D. Space  Transport services  --- Full   
E. Rail  Transport  Services  Partial  Partial    
F. Road  Transport  Services  --- Partial  22  
G. Pipeline  Transport services  --- Partial  11, 16, 36, 40  9-10 H. Services  auxiliary  to all modes  of transport  --- Partial  11, 16, 30, 36, 40  WT/REG452/1 /Rev.1  
 
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  Sectors  GATS  Agreement  
Commit -
ments  Reservations  
Existing  
(Ann. I)  Future  
(Ann. II)  
I. Other  Transport  Services  --- Full   
12. Other services n.i.e.  --- Full   
a Existing measures are listed in Section A of Annex III, future measures in Section B of Annex III.  
Note:  Excludes horizontal reservations and mode 4.  
 Definitions in accordance with those of Table 4. 2. 
Source:  As table above.  
 
4.87.   The following are f ully liberalized under the Agreement: computer  and related  services; 
rental/leasing  services  without  operators; courier  services; other communication services; 
commission  agents' services; franchising; other distribution services; all education services; all 
environmental services except sewage services; news agency services; libraries, archives, museums 
and other cultural services; sporting and other recreational services; int ernal waterways transport 
services; space  transport services; other  transport  services; and other services n.i.e.  
4.88.   On business services, Nicaragua expands on its GATS Schedule by increasing the coverage of 
its commitments. Numerous limitations are however listed, including in professional services - such 
as accounting and auditing, legal services, and advertisement ser vices and other business services, 
such as services incidental to fishing, mining, electricity distribution, investigation and security. 
Market access restrictions apply to mapping services. The R&D reservation requires a permit and 
legal representative in  Nicaragua for the entire duration of the R&D in natural science s.  
4.89.   In postal services, as per Annex II postal activities are reserved for SOEs. A sector -wide MFN 
reservation for telecommunication s authorizes discrimination on the basis of reciprocity or 
international agreements as regards the supply of such services. Other Annex I reservations on 
telecommunications and postal services may require concessions. Audiovisual reservations include 
equity limitations and nationality requirements for announcers.  
4.90.   For construction and related engineering services incorporation in Nicaragua and  either 
residency or a local legal representative  are required . 
4.91.   Distribution services, uncommitted under the GATS, are subject to reservations related to 
alcoholic beverages, py rotechnic material and ammunition, and energy including fossil fuels.  
4.92.   There are no GATS commitments in e nvironmental services. Under the Agreement, water -
related services – potable and sewage services - are reserved for an SOE. This reservation also 
exten ds to construction -related work. Beyond that, all sub -sectors are liberalized.  
4.93.   In financial services, the scope of Nicaragua's commitments diverges somewhat from the 
GATS Understanding. In insurance, the brokerage of insurance risks is also covered while the 
services auxiliary to insurance can only be provided by an insurance supplier. There are no 
commitments i n banking, credit reference and analysis. All sub -sectors remain , however , subject to 
various reservations.  
4.94.   Tourism services are more restricted than under the GATS, as the supply of such services 
requires e.g. incorporation under Nicaraguan law and commercial presence, none of which are 
specified under the GATS. Further, the requirement that tourist guides be nationals of Nicaragua is 
specified under the Agreement but not under the GATS. The sale of alcoholic beverages in 
restaurants, casinos, etc. is restricted to residents and registered entities – thus also affecting 
entertainment services. In the latter, unc ommitted under the GATS, restrictions also apply for 
musicians, gambling and betting.  
4.95.   Despite the numerous limitations under the Agreement applying to transport services, 
commitments are improved as compared to the GATS (limited to air and rail transport s ervices). In 
particular limitations apply to passenger and cargo transportation, which may require majority equity 
and effective control by Nicaraguans, etc. In air transport limitations apply in particular for 
registering aircrafts in Nicaragua and the su pply of complementary services for air transport; these WT/REG452/1 /Rev.1  
 
- 48 - 
 
  may include nationality, local presence and other requirements . Maintenance and repair of aircraft 
is, however , liberalized.  
4.4.2.5   Panama  
4.96.   In the explanatory note to its Schedule, Panama specifies that fish ing and related activities in 
Panamanian jurisdictional waters shall not be considered services and therefore need not be listed 
in Annexes I and II with respect to the obligations of Chapter 10.29 Despite that , reservations have 
been taken in Annexes I an d II for fishing relat ed services; these are reflected in the sectoral table.  
4.97.   The Agreement maintains the GATS horizontal limitation on the acquisition of land by 
non-Panamanians in border areas and adds a limitation on land acquisition by foreign governme nts 
(except for an embassy). Other limitations, as listed in Table 4.11, include the right to adopt or 
maintain any measure in relation to the Panama Ca nal Authority (PCA), including that a member of 
its board of directors be a Panamanian national and a reservation on national treatment and 
performance requirements for the maintenance of public order .30 The GATS threshold on foreign 
personnel has been lifted. The MFN reservation for international agreements is extended to also 
cover railroad transportation.  
Table 4.11 Panama: Horizontal reservations, Annexes  I and II 
No Subject  Type  GATS  Reservation  
(Y/N, 
Mode)  NT MFN MA LP PR SMBD  
Annex I          
2 Ownership of land   I Y (3)        
3 Public utilities service  I N       
4 Panama Canal  S&I N       
   In the Explanatory note           
§6 Fishinga  S&I N       
Annex II          
1 Social services for a public purpose  S&I N       
2 Native populations and minorities  S&I N       
3 Issues related to the Panama Canal  S&I N       
4 Privatization of SOEs  S&I N       
7 International agreements  S&I Y        
9 Maintenance of public order   I N       
   In the Explanatory note          
§5 Fishinga  S&I N       
a Not a reservation per se (see paragraph 4.51.   above ) 
Note:  Abbreviations in accordance with those of Table 4. 1. 
Source:  Panama's GATS Draft Consolidated Schedule of Specific Commitments (S/DCS/W/PAN ) and its 
Schedules annexed to the Agreement .  
4.98.   The Agreement expands significantly Panama's GATS specific commitments both in terms of 
scope and depth in favour of EU suppliers. Table 4.1 2 compares commitments under both 
Agreements (modes 1 -3, horizontal reservations excluded).  
 
29 For the sake of completeness and comparability, this is nevertheless reflected in the corresponding 
table. 
30 Article 23 of the Agreement and GATS Articles XIV and XIV bis are of relevance . WT/REG452/1 /Rev.1  
 
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  Table 4.12 Panama: Commitments under the Agreement and the GATS (modes 1 -3) 
Sectors  GATS  Agreement  
Commitments  Reservations  
Existing  
(Ann. I)  Future  
(Ann. II)  
1. Business services      
A. Professional  Services  Partial  Partial  21-23  
B. Computer  and Related  Services  Partial  Full   
C. Research  and Development  Services  --- Partial  22  
D. Real  Estate  Services  --- Partial  22  
E. Rental/Leasing  Services  without  Operators  Partial  Full   
F. Other  Business  Services  Partial  Partial  9-15, 20, 22  6 
2. Communication services      
A. Postal  services  --- Partial  28  
B. Courier  services  --- Full   
C. Telecommunication  services  Partial  Partial  6, 24, 25   
D. Audiovisual  services  Partial  Partial  6  
E. Other  --- Full   
3. Construction and related engineering services  
All sub -sectors A -E Partial  Partial   5 
4. Distribution services      
A. Commission  agents'  services  Full Full   
B. Wholesale  trade services  Full Partial  9-12  
C. Retailing  services  --- Partial  1, 9-12  
D. Franchising  Partial  Full   
E. Other  --- Full   
5. Education services      
A. Primary education services  Partial  Partial  8  
B. Secondary education services  Partial  Partial  8  
C. Higher education services  Partial  Partial  8  
D. Adult education  --- Partial  8  
E. Other education services  --- Partial  8  
6. Environmental services      
All sub -sectors A -C --- Full   
D. Other  Partial  Partial   6 
7. Financial servicesa     
A. All insurance  and insurance -related  services  Partial  Partial  III.2-4  
B. Banking  and other  financial  services  Partial  Partial  III.1, III.4   
C. Other  --- ---   
8. Health related and social services      
A. Hospital services  Partial  ---   
All sub -sectors B -D --- ---   
9. Tourism and travel related services      
A. Hotels  and restaurants (incl. catering)  Partial  Partial  26  
B. Travel  agencies  and tour operators  services  Partial  Full   
C. Tourist  guides  services  --- Full   
D. Other  --- Full   
10. Recreational, cultural and sporting services  
A. Entertainment  services  Partial  Partial  5  
B. News agency services  --- Full   
C. Libraries, archives, museums and other 
cultural services  --- Full   
D. Sporting and other recreational services  --- Full   
E. Other  --- Partial  27  
11. Transport services      
A. Maritime Transport Services  --- Partial  16, 17, 29   
B. Internal Waterways Transport services  --- Full   WT/REG452/1 /Rev.1  
 
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  Sectors  GATS  Agreement  
Commitments  Reservations  
Existing  
(Ann. I)  Future  
(Ann. II)  
C. Air  Transport  Services  Partial  Partial  18, 19, 29   
D. Space  Transport services  --- Full   
E. Rail  Transport  Services  --- Full   
F. Road  Transport  Services  --- Partial   8 
G. Pipeline  Transport services  --- Partial  9-12 10 
H. Services  auxiliary  to all modes  of transport  --- Partial  9-12, 17   
I. Other  Transport  Services  --- Partial   6 
12. Other services n.i.e. --- Full   
a Existing measures are listed in Section A of Annex III, future measures in Section B of Annex III.  
Note:  Excludes horizontal reservations and mode 4.  
 Definitions in accordance with those of Table 4. 2. 
Source:  As table above.  
 
4.99.   The following are fully liberalized under the Agreement: computer  and related services; 
rental/leasing  services  without  operators; courier  services; other communication services; 
commission  agents'  services; franchising; other distribution services; all environmental services  
except other ; all tourism and travel related service s except hotels and restaurants; news agency 
services; libraries, archives, museums and other cultural services; sporting and other recreational 
services; internal waterways transport services; space  transport services; rail  transport  services; 
other servi ces n.i.e.  
4.100.   Compared to the GATS, Panama made broader commitments in almost all the sub -sectors 
in business services by expanding sectoral and/or modal coverage while maintaining some 
reservations. Panama reserves a wide list of professions and activities f or its nationals (e.g. 
economists, psychologists, legal, engineering), although in some cases foreign professionals may to 
practice in Panama in particular o n the basis of reciprocity. In other business services, commitments 
under the Agreement are also br oader than under the GATS; nationality and establishment 
requirements apply in many instances.  
4.101.   In communications services, Panama expands sectoral coverage in telecommunications and 
audiovisual services, subject to limitations. Beyond the public utilities  reservation, limitations include 
prohibiting foreign government participation in companies supplying telecommunication services in 
Panama, quotas on mobile phone operators, local presence requirement, and foreign equity The 
horizontal reservation on publi c utilities also applies to radio and television services. No 
commitments were taken in postal which is reserved for the State.  
4.102.   In construction services, Panama undertakes  broader commitments but maintains the GATS 
nationality reservation for engineers an d architects responsible for a project. It also reserves the 
right to adopt or maintain any residency or local presence requirement or ask for a financial deposit 
to supply these services.  
4.103.   In distribution services, Panama added retailing and other service s to its schedule, but 
applies nationality or ownership requirements for individuals or companies willing to provide retailing 
services in Panama. Distribution of electrical energy is subject to a number of reservations.  
4.104.   In education services, Panama expan ded its commitments in the area of private education 
but made no commitments regarding public education, which is covered by a broad reservation on 
social services. In the field of private education, the GATS authorization requirement for private 
education al institutions was removed but a new reservation restricts teaching of history and civics 
to nationals.  
4.105.   The scope of environmental services is increased as compared to the GATS, with sewage 
services being subject to the public utilities reservation.  Other  environmental services are subject to 
Annex II limitations on fisheries.  WT/REG452/1 /Rev.1  
 
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  4.106.   Panama made broader commitments in financial services. A reservation applying to both 
sectors limits issuance of bonds/banking guarantees related to government procurement only to 
companies established in Panama. The other non -conforming measures for banking include 
residence and nationality requirements for general proxies of foreign banks. Some non -conforming 
measures relating to insurance are also listed with regard to national tre atment and senior 
management and boards of directors.  
4.107.   Panama made no commitments in health related and social services, as they are subject to 
a broad reservation on social services.  
4.108.   In tourism and travel related services, Panama made broader commitments by expanding 
sectoral coverage. It maintains only two reservations, one on the establishment of bars and another 
on residency conditions for tourist guides. In entertainment services, it maintains a few restrictions 
under which it reserves the supply of games of chance and gambling for the State and allows mu sic 
shows by foreign artists upon the fulfilment of certain conditions.  
4.109.   Panama expanded the sectoral coverage of transport services, which under the GATS is 
limited to aircraft maintenance and repair services. Under the Agreement, Panama made 
commitments in all the other subsectors while maintaining some reservations in air, road, maritime 
and internal waterway transport services as well as auxiliary services to maritime and waterways 
transport services  and other services (in relation to fishing activities ). In maritime and internal 
waterway transport and auxiliary services, Panama reserves for example the right to determine the 
number of concessions for national ports and airports. It also imposes restrictions on the ownership 
of vessels willing to provide  certain services, on the nationality of their crew, and on the crew of 
placement/manning companies registered in Panama. In road transport services Panama reserves 
the right to adopt or maintain any measure that restricts the provision of services and inv estments 
related to passenger transportation, buses terminals and the rental of commercial vehicles with 
operator. Cabotage (by land) is reserved for Panamanian nationals.  
4.5  Regulatory provisions  
4.5.1   Domestic regulation  
4.110.   Article 10.7 on domestic regulation rep licates the provision of GATS Article VI as regards 
information to be provided to the applicant who has requested an authorization to supply a service; 
this does not apply to services sectors exempted under Annexes I and II.  
4.111.   The GATS underlying principle t hat any new disciplines to be developed on qualification, 
licensing and technical standards – namely that they do not constitute an unnecessary barrier to 
trade in services – is incorporated in the Agreement in the form of a best endeavour provision. It is  
also foreseen that new disciplines agreed under the GATS or other multilateral fora in which the 
Parties participate shall be incorporated, as appropriate, into the Agreement.  
4.112.   These provisions also apply to measures affecting the supply of a service by a covered 
investment.  
4.113.   For financial services, disciplines require that measures of general application are 
administered in a reasonable, objective, and impartial manner, except with respect to non -
conforming measures listed in Annex III.  
4.5.2   Recognition  
4.114.   Article 10.9 on recognition of service suppliers incorporates the substantive disciplines of 
GATS Article VII.  
4.115.   No mandatory recognition of qualifications is foreseen. The Article expressly states that no 
MFN treatment applies with respect to mutual recognition in struments concluded between a Party 
and a non -party.  
4.116.   Equivalent provisions are applicable to financial services (Article 11.15).  WT/REG452/1 /Rev.1  
 
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  4.5.3   Subsidies  
4.117.   Subsidies and grants are outside the scope of Chapter 10 (paragraph 4 of Article 10.1). 
Subsidies and grants remain s ubject to disciplines of Chapter 9 except national treatment, MFN and 
senior management and boards of directors (paragraph 5 of Article 9.13).  
4.5.4   Safeguards  
4.118.   Safeguard provisions on trade in services and investment (Annex 9 -F on "Transfers") are 
authorized:  
a. in the event of serious balance of payments and external financial difficulties or under 
threat thereof; or  
b. in exceptional circumstances, when payments and capital movements cause or threaten 
to cause serious difficulties for the operation of monetary or exc hange rate policies in the 
Party concerned.  
4.119.   The terms and conditions for the application of such safeguard measures are similar to those 
of GATS Article XII, except as follows:  
a. a maximum duration of one year is foreseen, extendable in extremely exceptional  
circumstances but subject to prior coordination with the other Party . However, any such 
extension shall not be subject to the authorization of the Parties;  
b. the measures shall not constitute a dual or multiple exchange rate practice except as 
prescribed by the Articles of Agreement of the International Monetary Fund; and  
c. beyond a. above, no consultation is foreseen.  
4.6  Sector specific provisions on trade in services  
4.6.1   Financial services  
4.120.   Disciplines and definitions of Chapter 11 on financial services builds upon those of the 
Agreement's Chapter 9, the GATS and its Annex on Financial Services, as well as some of the 
provisions included in the GATS Understanding on Commitments in Financial Services (hereafter 
"the Understanding"). Liberalization  is bas ed on a hybrid approach (see paragraph 4.32.   above ).  
4.121.   The scope of Chapter 11 on financial services is as follows:  
a. it applies to measures of a Party rel ating to a financial institution of the other Party, their 
investors and their investments in a financial institution in the Party's territory and cross -
border trade in financial services (Article  11.1);31  
b. it does not apply to public retirement plan s; social security system s; services involving 
State financial resources, unless any of these activities are opened up for domestic 
institutions; and  
c. it does not apply to government procurement.  
4.122.   The Chapter contains the Parties' liberalization commitments in fin ancial services as well as 
exceptions for regulatory measures, which are built upon those under the GATS Annex on Financial 
Services and Understanding on Commitments in Financial Services (hereafter the GATS 
Understanding). It contains provisions on MFN an d national treatment, exceptions and prudential 
measures, market access, new financial services, transfer of information, senior management and 
 
31 Financial services are defined as in the GATS Annex on Financial Services.  WT/REG452/1 /Rev.1  
 
- 53 - 
 
  boards of directors' requirements, recognition, self -regulatory organisations, access to payment and 
clearing sy stems, consultations and dispute settlement.  
4.123.   In addition, Chapter 11 incorporates various obligations from Chapters 9 and 10.32 These 
provisions refer to expropriation and compensation, special formalities and information 
requirements, denial of benefits a nd investment and environmental, health, safety and other 
regulatory objectives. Additionally, provisions related to payments and transfers are also 
incorporated subject to obligations pursuant to national treatment, market access and cross -border 
trade st andstill.  
4.124.   The disciplines on new financial services differ from those of the Understanding in that the 
Agreement authorizes the Parties to apply limitations on the form of the legal entity supplying the 
services as well as to require authorization for the supply of the service.  
4.125.   The c ross-border supply of financial services (modes 1, 2 and 4, Article 11.5) is authorized 
for Party-specific activities listed in Annex  11-A, subject to the list of reservations in Annex III. The 
scope of financial services is br oader than that in the GATS Understanding:  
a. as regards activities, since it also generally includes insurance intermediation as well as 
advisory and other auxiliary banking services;  
b. as regards consumers, since it authorizes persons located in a Party's ter ritory but also its 
nationals wherever located to purchase financial services from cross -border financial 
service suppliers of the other Party located therein;  
c. however,  a Party is not required to permit such cross -border suppliers to do business or 
solicit in its territory; also, the  Parties  remain authorized to require registration of such 
service suppliers.  
4.126.   The list of exceptions to financial services (Article 11.10) builds upon those of the GATS and 
its Annex on Financial Services and includes the abili ty of a Party to prevent or limit transfers by a 
financial institution or service supplier for prudential  reasons .33 
4.127.   In case of inconsistency between Chapter 11 and the Chapter on Investment, the provisions 
of Chapter 11 shall prevail (Article 9.2).  
4.128.   Articles 11.18 and 11.19 adapt the Agreement's dispute settlement to the financial services 
sector. These disciplines refer in particular to the qualifications of the panellists/arbitrators, cross -
sectoral retaliation, and investment disputes in financial servic es. 
4.129.   Article 11.16 establishes a Committee on Financial Services.  
4.6.2    Telecommunications  
4.130.   Chapter 13 on Telecommunications builds upon the GATS and its Annexes on 
Telecommunications and on Negotiations on Basic Telecommunications as well as the WTO's 
Reference Paper, to which Korea, El Salvador and Honduras have committed as regards its regulatory 
principles. The Chapter has three Annexes:  
a. Annex 13 -A (Additional obligations relating to major suppliers) provides party -specific 
exemptions from various obligations for major suppliers;   
b. Annex 13 -B (Rural services) exempts Nicaragua from some obligations with respect to a 
rural telephone company supplying fewer than 2% of installed lines; and  
 
32 These have been referred to earlier in this document.  
33 Article XIV(c)(i) and the Annex on Financial Services list exceptions for prudential reasons; monetary, 
credit and exchange rate policies; and for prevention of deceptive and fraudulent practices. These exceptions 
are with respect to different Chapters, including Chapters 9, 10, 13 and 14.  WT/REG452/1 /Rev.1  
 
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  c. Annex 13 -C (Obligations applicable to Costa Rica) establishes Costa Rica’s obligations with 
regards to telecommunications services. In short, it includes clarifications related to its 
domestic regulation but does not include obligations such as co -location, number 
portability, dialling parity and access to telephone numbers, resale, unbundling of network 
elements and provisioning and pricing of leased circuits services. .  
4.131.   In case of inconsistency between Chapter 13 and another Chapter, Chapter 13  shall prevail.  
In case of inconsistency between Annex 13 -C and another Chapter, the Annex shall prevail.  
4.132.   The Chapter's scope extends  non-discriminatory access to and use of public 
telecommunications services to measures relating to broadcast or cable distribution of radio or 
television programming, only to ensure that an enterprise operating a broadcast station or cable 
system has continued access to and use of public telecommunicat ions services. Otherwise, as in 
GATS, the Chapter shall not apply to any measure adopted or maintained by a Party relating to 
broadcast or cable distribution of radio or television programming, . 
4.133.   Additional disciplines building upon the regulatory framework  of the WTO's Reference Paper 
impose obligations on the Parties with respect in particular to the practices of major suppliers of 
public telecommunications services, while also addressing issues such as the Parties' regulatory 
bodies and allocation and use  of scarce resources. Obligations to be abided by major suppliers aim 
in particular to prevent anti -competitive practices;34 those applying to regulatory bodies also include 
the right s of recourse of enterprises to these bodies in order to resolve disputes  with other 
enterprises. New disciplines on e.g. international submarine cable systems, universal service s and 
licensing process es are also provided for.  
5  GENERAL PROVISIONS OF THE AGREEMENT  
5.1  Transparency  
5.1.  The provisions of Chapter 1 8 on Transparency deal wit h publication, notification and provision 
of information, administrative proceedings , and the existence of review and appeal; they are in line 
with those of the WTO.  Article 18.2.1 establishes that t o the maximum extent possible  each Party 
shall notify the  other Party  of any proposed or actual measure that the Party considers might 
materially affect the operation of the Agreement or otherwise substantially affect that other Party's 
interests under it.  
5.2  Current payments and capital movements  
5.2.  With respect to t he supply of services, including financial services, and investment, each Party 
shall permit all transfers relating to the supply of services and/or a covered investment to be made 
freely and without delay into and out of its territory (Articles 10.10, 11. 1:2.c and 9.8  respectively). 
Limitations are however possible under  certain conditions, such as when payments and capital 
movements cause or threaten to cause serious difficulties for macroeconomic management , and will 
be applied only through equitable and  non-discriminatory measures a s specified in the relevant 
articles (e.g. in cases of bankruptcy).  
5.3  Exceptions  
5.3.1   General exceptions  
5.3.  Articles XX of the GATT 1994 and XIV of the GATS are incorporated into the Agreement and 
made applicable to the trade relations between the Parties with respect to provisions governing trade 
in goods and services, respectively (Article 23.1). Equivalent ex ceptions apply with respect to 
investment  and electronic commerce .  
5.3.2   Essential s ecurity exceptions  
5.4.  Article 23.2 provides that a Party may : 
 
34 However various exemptions are provided for in Annexes 13. A and 13.B . WT/REG452/1 /Rev.1  
 
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  a. refrain from disclosing information contrary to its essential security interest s; and  
b. apply m easures necessary for the  fulfilment of its obligations with respect to the 
maintenance or restoration of international peace or security , or the protection of its own 
essential security interests . 
5.3.3   Taxation  
5.5.  The Agreement's disciplines on taxation are provided for in Article 23.3:  
a. tax conventions are carved out from the Agreement; in cases of inconsistency between 
the Agreement and the convention, the convention prevails  
b. paragraphs 3 to 6 of Article 23.3 specify the extent to which national treatment, MFN and 
performance requ irements apply to trade in goods and services, as appropriate . 
5.4  Accession and withdrawal  
5.6.  The Agreement is open to accession by any country or group of countries  upon terms and 
conditions  mutually agreed  between it/them and the Joint Committee  (Article 24.4) .  
5.7.  Article 2 4.6 provides for a written notification  by a Party wishing to withdraw from  the 
Agreement , which shal take effect 180 days after the receipt of such notification by all the Parties . 
The Agreement shall expire at that date if the withdrawal con cerns Korea.  
5.5  Institutional framework  
5.8.  The Agreement's governing body is the Joint Committee, established in Chapter 21 on 
"Institutional Provisions". The Committee is tasked with the implementation and operation of the 
Agreement. The Joint Committee shall m eet on an annual basis, unless the Parties agree otherwise. 
The first meeting of the Joint Committee took place on 30 September 2021 by videoconference.  
resulting in the adoption of its rules of the procedures and of the operating plan of the executing 
agency. Parties also agreed that negotiations for the inclusion  of Guatemala into the Agreement 
would start as soon as the relevant procedures were establi shed (see paragraph 2.2.   above ).  
5.9.  Numerous other Sub -Committees and a Working Group have also been established under the 
Agreement; these have been referred t o in the relevant sections.  
5.6  Dispute settlement  
5.10.   The Agreement's dispute settlement process is contained in Chapter 2 2, divided into two 
Sections (A  and B), as well as a n Annex that deals with the remuneration and payment of panellists  
and experts.  It applie s to avoidance or settlement of disputes arising under the Agreement 
(Article  22.2).  
5.11.   Non-violation complaints are also permitted in respect to market access for goods, rules of 
origin, TBT, government procurement or cross -border trade in services (Chapter s 2, 3, 6, 8 and 10, 
respectively; paragraph 1(c) of Article  22.2)), except for measures justified under general 
exceptions Article 23.1 . The Chapter does not apply to the settlement of disputes relating to SPS, 
trade remedies, labour, environment, coopera tion and competition ( Chapters 5, 7, 16, 17, 19 and 
20 respectively).  
5.12.   Forum selection is provided for by Article 22.3, with the forum deemed to have been selected 
upon the request to establish a panel under either the Agreement or the WTO Agreement . Unless 
otherwise agreed, the panel is composed of three panellists.  
5.13.   An initial  panel report shall be issued within 90 days from the appointment of the Chair; this 
may be extended to a maximum of 120 days  following  a justification to be provided to the Parties . 
The Parties may comment within 14 days; the final report shall be circulated within 30 days from 
the initial report and made public within 15 days thereafter.  In cases of urgency timeline s for holding WT/REG452/1 /Rev.1  
 
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  and concluding consultations are  reduce d. Good offices, conciliation and mediation remain possible 
at any time  (Article 22.6) . 
5.14.   The Parties may agree on a panel to suspend its work for a period not exceeding 12 months . 
Termination of proceedings is possible at any time if the Parties find a mutu ally satisfactory solution 
to the dispute.  
5.15.   The dispute settlement mechanism does not provide the right to appeal the panel report.  
5.16.   The Parties are to reach an agreement on a resolution regarding implementation within 30 
days of the final report, failing wh ich compensation shall be negotiated and agreed upon.  Lack of 
agreement regarding the compensation , disagreement on the compensation or non -implementation 
of the resolution opens the door for the affected Party to suspend benefits of equivalent effect . 
Cross-sectoral retaliation is authorized as a second resort. Retaliation may also be challenged; in 
that case, the Panel is to reconvene, and it shall issue its report within a maximum of 90 or 120, 
depending on the extent of the measure challenged .  
5.17.   If the P arty complained considers that it has eliminated the non -conformity or the nullification 
or impairment , it may request the panel for a compliance review, with a report to be made within 
60 days. If it decides in favour of the Party complained against the r etaliation shall immediately be 
suspended.  
5.18.   Domestic proceedings and private commercial dispute settlement are provided for in Section 
B of Chapter 22. Th ey may involve domestic tribunals, recourse to the Joint Committee, arbitration 
or other alternative di spute resolution mechanisms . 
5.19.   Section B of Chapter 9 provides for an ISDS mechanism to settle disputes between an investor 
of a Party and the other Party.  
5.7  Relationship with other agreements concluded by the parties  
5.20.   In Article 1.3 the Parties reaffirm their rights and obligations under the WTO Agreement and 
other agreements to which both are party ; the Agreement has no effect on preferences granted  
other agreements.  In the event of an inconsistency between the agreements, consultations shall 
take place  with a view to finding a mutually satisfactory solution.  
5.21.   Table 5.1 below sets out other regional trade agreements to which the Parties are party.  
Table 5.1 Korea and Central America: Participation in other RTAs (notified and non -
notified in force), as of 12 July  2022  
RTA Name  Date of 
entry into 
forcea Coverage  GATT/WTO Notification  
Year WTO Provision  
Republic of Korea  
United Kingdom - Republic of Korea  01-Jan-21 Goods & 
Services  2020 GATT Art. XXIV & GATS Art. V  
Republic of Korea - Colombia  15-Jul-16 Goods & 
Services  2016 GATT Art. XXIV & GATS Art. V  
China - Republic of Korea  20-Dec-15 Goods & 
Services  2016 GATT Art. XXIV & GATS Art. V  
Republic of Korea - New Zealand  20-Dec-15 Goods & 
Services  2015 GATT Art. XXIV & GATS Art. V  
Republic of Korea - Viet Nam  20-Dec-15 Goods & 
Services  2016 GATT Art. XXIV & GATS Art. V  
Canada - Republic of Korea  01-Jan-15 Goods & 
Services  2015 GATT Art. XXIV & GATS Art. V  
Republic of Korea - Australia  12-Dec-14 Goods & 
Services  2014 GATT Art. XXIV & GATS Art. V  
Republic of Korea - Turkey  01-May-13 
01-Aug-18 Goods  
Services  2013 
 GATT Art. XXIV  
GATS Art. V  
Republic of Korea - United States  15-Mar-12 Goods & 
Services  2012 GATT Art. XXIV & GATS Art. V  WT/REG452/1 /Rev.1  
 
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  RTA Name  Date of 
entry into 
forcea Coverage  GATT/WTO Notification  
Year WTO Provision  
Peru - Republic of Korea  01-Aug-11 Goods & 
Services  2011 GATT Art. XXIV & GATS Art. V  
EU - Republic of Korea  01-Jul-11 Goods & 
Services  2011 GATT Art. XXIV & GATS Art. V  
ASEAN - Republic of Korea  01-Jan-10 
14-Oct-10 Goods  
Services  2010 GATT Art. XXIV, Enabling Clause  
GATS Art. V  
Republic of Korea - India 01-Jan-10 Goods & 
Services  2010 GATT Art. XXIV, Enabling Clause 
& GATS Art. V  
EFTA - Republic of Korea  01-Sep-06 Goods & 
Services  2006 GATT Art. XXIV & GATS Art. V  
Republic of Korea - Singapore  02-Mar-06 Goods & 
Services  2006 GATT Art. XXIV & GATS Art. V  
Republic of Korea - Chile 01-Apr-04 Goods & 
Services  2004 GATT Art. XXIV & GATS Art. V  
Global System of Trade Preferences 
among Developing Countries (GSTP)  19-Apr-89 Goods  1989 Enabling Clause  
Asia Pacific Trade Agreement (APTA)  17-Jun-76 
17-Sep-13 Goods  
Services  1976 
2019 Enabling Clause  
GATS Art. V  
• APTA - Accession of China  01-Jan-02 Goods  2004 Enabling Clause  
• APTA - Accession of Mongolia  01-Jan-21 Goods & 
Services  Not notified  
Protocol on Trade Negotiations (PTN)  11-Feb-73 Goods  1971 Enabling Clause  
Regional Comprehensive Economic 
Partnership (RCEP)  01-Jan-22 Goods & 
Services  Not notified  
CENTRAL AMERICA - COLLECTIVELY  
United Kingdom - Central America  
(all CACM Member States)  01-Jan-21 Goods & 
Services  2020 GATT Art. XXIV & GATS Art. V  
EFTA - Central America  
(Costa Rica and Panama)  19-Aug-14b Goods & 
Services  2014 GATT Art. XXIV & GATS Art. V  
EU – Central America  
(all CACM  Member States)  01-Aug-13c Goods & 
Services  2013 GATT Art. XXIV & GATS Art. V  
Mexico - Central America  
(all CACM Member States, except 
Panama)  01-Sep-12d Goods & 
Services  2014 GATT Art. XXIV & GATS Art. V  
Dominican Republic - Central America 
- United States Free Trade Agreement 
(CAFTA -DR) 
(all CACM Member States, except 
Panama)  01-Mar-06e Goods & 
Services  2006 GATT Art. XXIV & GATS Art. V  
Panama - Central America  11-Apr-03f Goods & 
Services  2005 GATT Art. XXIV & GATS Art. V  
Chile - Central Ame rica 
(all CACM Member states, except Panama)  15-Feb-02g Goods & 
Services  2002 GATT Art. XXIV & GATS Art. V  
Dominican Republic - Central America  
(all CACM Member States, except 
Panama)  04-Oct-01h Goods & 
Services  2012 GATT Art. XXIV & GATS Art. V  
Central American Common Market 
(CACM)  04-Jun-61 Goods  1961 GATT Art. XXIV  
• CACM - Accession of Panama  06-May-13 Goods  2017 GATT Art. XXIV  
Treaty on Investment and Trade in  
Services (TICS)  
(El Salvador, Guatemala and 
Honduras)  20-07-08i Services   Not notified   
COSTA RICA  
Costa Rica - Colombia  01-Aug-16 Goods & 
Services  2016 GATT Art. XXIV & GATS Art. V  
Costa Rica - Singapore  01-Jul-13 Goods & 
Services  2013 GATT Art. XXIV & GATS Art. V  
Costa Rica - Peru 01-Jun-13 Goods & 
Services  2013 GATT Art. XXIV & GATS Art. V  
China - Costa Rica  01-Aug-11 Goods & 
Services  2012 GATT Art. XXIV & GATS Art. V  
Canada - Costa Rica  01-Nov-02 Goods  2003 GATT Art. XXIV  
Costa Rica - Bolivarian Republic of 
Venezuela  09-Jul-86 Goods  2020 Enabling Clause - Changes to 
LAIA TM 80  WT/REG452/1 /Rev.1  
 
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  RTA Name  Date of 
entry into 
forcea Coverage  GATT/WTO Notification  
Year WTO Provision  
[LAIA, AAP.A25 TM 26]  
CARICOM - Costa Rica  15-Nov-05 Goods  Not notified  
EL SALVADOR  
El Salvador - Ecuador  16-Nov-17 Goods  2018 Enabling Clause  
El Salvador - Cuba 01-Aug-12 Goods  2013 Enabling Clause  
Colombia - Northern Triangle (El 
Salvador, Guatemala, Honduras)  01-Feb-10 Goods & 
Services  2012 GATT Art. XXIV & GATS Art. V  
El Salvador - Honduras - Chinese Taipei  01-Mar-08 Goods & 
Services  2010 GATT Art. XXIV & GATS Art. V  
Bolivarian Republic of  Venezuela - El 
Salvador  
[LAIA, AAP.A25 TM 27]  09-Jul-86 Goods  2020 Enabling Clause - Changes to 
LAIA TM 80  
HONDURAS  
Peru - Honduras  01-Jan-17 Goods & 
Services  2018 GATT Art. XXIV & GATS Art. V  
Canada - Honduras  01-Oct-14 Goods & 
Services  2015 GATT Art. XXIV & GATS Art. V  
Colombia - Northern Triangle (El 
Salvador, Guatemala, Honduras)  27-Mar-10 Goods & 
Services  2012 GATT Art. XXIV & GATS Art. V  
El Salvador - Honduras - Chinese Taipei  15-Jul-08 Goods & 
Services  2010 GATT Art. XXIV & GATS Art. V  
Honduras - Bolivarian Republic of 
Venezuela  
[LAIA, AAP.A25 TM 16]  14-May-86 Goods  2020 Enabling Clause - Changes to 
LAIA TM 80  
NICARAGUA  
Ecuador - Nicaragua  
[LAIA, AAP.A25 TM 45]  19-Nov-17 Goods  2022 Enabling Clause - Changes to 
LAIA TM 80  
Cuba – Nicaragua  
[LAIA, AAP.A25 TM 44]  09-Oct-14 Goods  2022 Enabling Clause - Changes to 
LAIA TM 80  
Plurinational State of Bolivia, Cuba, 
Nicaragua and Bolivarian Republic of 
Venezuela  
[LAIA, AAP.CE 70]  30-Jan-14 Goods  2020 Enabling Clause - Changes to 
LAIA TM 80 
Nicaragua - Bolivarian Republic of 
Venezuela  
[LAIA, AAP.A25 TM 25]  26-Feb-92 Goods  2020 Enabling Clause - Changes to 
LAIA TM 80  
Global System of Trade Preferences 
among Developing Countries (GSTP)  19-Apr-89 Goods  1989 Enabling Clause  
Colombia – Nicaragua  
[LAIA, AAP.A25 TM 6]  02-Sep-85 Goods  2020 Enabling Clause - Changes to 
LAIA TM 80  
PANAMA  
Mexico - Panama  01-Jul-15 Goods & 
Services  2016 GATT Art. XXIV & GATS Art. V  
Canada - Panama  01-Apr-13 Goods & 
Services  2013 GATT Art. XXIV & GATS Art. V  
United States - Panama  31-Oct-12 Goods & 
Services  2012 GATT Art. XXIV & GATS Art. V  
Panama - Peru 01-May-12 Goods & 
Services  2012 GATT Art. XXIV & GATS Art. V  
Panama – Cuba 
[LAIA, AAP.CE 71]  20-Aug-09 Goods  2020 Enabling Clause - Changes to 
LAIA TM 80  
Panama - Chile 07-Mar-08 Goods & 
Services  2008 GATT Art. XXIV & GATS Art. V  
Panama - Singapore  24-Jul-06 Goods & 
Services  2007 GATT Art. XXIV & GATS Art. V  
Panama - Chinese Taipei  01-Jan-04 Goods & 
Services  2009 GATT Art. XXIV & GATS Art. V  
Colombia – Panama  
[LAIA, AAP.A25 TM 29]  01-Jan-95 Goods  2020 Enabling Clause - Changes to 
LAIA TM 80  
Panama - Dominican Republic  08-Jun-87 Goods  2016 Enabling Clause  
Panama - Israel  01-Jan-20 Goods & 
Services  Not notified  
Panama - Trinidad and Tobago  04-Jul-16 Goods  Not notified  WT/REG452/1 /Rev.1  
 
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  RTA Name  Date of 
entry into 
forcea Coverage  GATT/WTO Notification  
Year WTO Provision  
LAIA - Accession of Panama  03-May-12 Goods  Not notified  
a Dates of the first entry into force for at least one of the Parties.  
b Dates of entry into force: Costa Rica, Panama and Norway: 19 Aug 14; Costa Rica, Panama, 
Liechtenstein and Switzerland: 29 Aug 14; Costa Rica, Panama and Iceland: 5 Sept 14.  
c Dates of entry into force: EU, Honduras, Nicaragua and Panama: 1 Aug 13; Costa Rica and El 
Salvador: 1 Oct 13; Guatemala: 1 Dec13.  
d Dates of entry into force:  El Salvador, Nicaragua: 01 Sep 12; Honduras: 01 Jan 13; Costa Rica: 01 
Jul 13; Guatemala: 01 Sept 13.  
e  Dates of entry into force: El Salvador, the United States: 01 Mar 06; Honduras, Nicaragua: 01 Apr 
06; Guatemala: 01 Jul 06; the Dominican Republic: 01 Mar  07; Costa Rica: 01 Jan 09.  
f The bilateral Protocols to the Free Trade Agreement between Panama and Central America have 
been notified to the WTO separately. Dates of entry in force: El Salvador: 11 Apr 03; Costa Rica: 23 
Nov 08; Honduras: 09 Jan 09; Guat emala: 20 Jun 09; Nicaragua: 21 Nov 09.  
g  The bilateral Protocols to the Free Trade Agreement between Chile and Central America have been 
notified to the WTO separately. Dates of entry in force: Costa Rica: 15 Feb 02; El Salvador: 01 Jun 
02; Honduras: 19 Jul 08; Guatemala: 23 Mar 10; Nicaragua: 19 Oct 12.  
h Dates of entry into force: El Salvador: 4 Oct 01; Guatemala: 15 Oct 01; Honduras: 19 Dec 01; Costa 
Rica: 7 Mar 02; Nicaragua: 3 Sep 02.  
i Date of entry into force of the Protocol that modifies the TICS.  El Salvador, Honduras: 20 -Jul-08, 
Guatemala: 31 -Mar-10. 
Note:  The LAIA reference is indicated in brackets for some RTAs notified as a change to LAIA's TM 80. 
Further details can be found at: http://aladi.org .  
Source:  WTO Secretariat. Further information including on dates of entry into force/provisional application 
may be found in the WTO Database on RTAs: http://rtais.wto.org .  
 
 
5.8  Government procurement  
5.22.   Among the Parties, only Korea  is a signatory to the WTO Government Procurement Agreement 
(GPA); Costa Rica and Panama have observer status in the Agreement.  
5.23.   Government procurement provisions, addressed in Chapter 8 , mirror those of the WTO GPA.  
In addition  Korea does not change its thresholds or entities under the Agreement.  
5.24.   The following are covered by the Agreement (Article 8.2) : 
a. procurement by government entities (central, sub -central35 and others) listed in the 
Parties' Schedules included in Annex 8-A; 
i. of goods, services or any combination thereof;  
ii. above the thresholds indicated in Table 5.2 below; and   
b. sectoral exclusions, either permanent or time -bound, are specified in the Schedules. 
Section G includes general notes specific to each Party.  
Table 5.2 Government Procurement Thresholds (SDRs)a 
Party  Government Entities 
Central Sub-central Other 
Goods & 
Services  Construc - 
tion BOTc Goods & 
Services Construc -
tion  BOTc Goods & 
Services Construc -
tion BOT
c 
KOR 130,000  5,000,000  A: 200,000d 
B: 400,000  15,000,000  400,000  15,000,000  --- 
CRIc 130,000  5,000,000  355,000  15,000,000  A: 200,000d 
B: 400,000  15,000,000  
SLV 130,000b 5,000,000b --- 355,000b 15,000,000  --- 
400,000  15,000,000  --- 
 
35 Procurement of Nicaragua's sub -central government entities remain closed to goods and services from 
Korea.  WT/REG452/1 /Rev.1  
 
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  Party  Government Entities 
Central Sub-central Other 
Goods & 
Services  Construc - 
tion BOTc Goods & 
Services Construc -
tion  BOTc Goods & 
Services Construc -
tion BOT
c 
HND 130,000  5,000,000  --- 
400,000  15,000,000  --- 
400,000  15,000,000  --- 
NICb 130,000  5,000,000  --- --- --- --- A: 200,000d 
B: 400,000  15,000,000  --- 
PAN 130,000  5,000,000  400,000  15,000,000  400,000  15,000,000  
Thresholds applied by most Parties to the WTO Government Procurement Agreement  
WTO 130,000  5,000,000  NA 200,000  5,000,000  NA 400,000  5,000,000  NA 
a In September 2021, 1 SDR=1.42 USD.  
b Higher thresholds were applied during the three -year period after the Agreement's entry into force.  
c For Costa Rica, p ublic work concessions  is also included under BOT.  
d Two groups of entities  are listed  (A/B) , each with a different threshold. In the case of Ko rea, List B 
only includes local government s. 
BOT Build-operate -transfer.  
NA Not applicable.  
--- No commitment.  
Source:  Annex 8-A to the Agreement and WTO website.  
 
5.9  Intellectual property rights  
5.25.   Chapter 15 (divided into ten sections) covers intellectual property  rights. It reaffirms the 
rights and obligations under the WTO Agreement on Trade Related Aspects of Intellectual Property 
Rights (TRIPS) and other international treaties in the field of in tellectual property  to which the Parties 
are signatories, and includes  a provision in Article 15.2 inviting Parties to make all reasonable efforts 
for non -signatory Parties to join other agreements listed in such Article (e.g. the Patent Law Treaty 
of 200 0). The Parties commit to provide at a minimum the protection provided for in the Chapter.  
5.26.   National treatment is provided for in accordance with the relevant TRIPS provisions (Article 
15.4). The Parties are free to establish their own regime on the exhaust ion of intellectual property 
rights (Article 15.7).  
5.27.   Best endeavour provisions on t ransfer of technology and cooperation  (Section I ) encourage 
cooperation; an illustrative list of areas for cooperation is included in Article 15.72 . 
5.28.   The term of protection g ranted under the Agreement to all types of intellectual property rights  
is generally higher than under the TRIPS Agreement , while other provisions , including any exceptions 
that might be provided for , are similar in both agreements . The following main disc iplines differ from 
TRIPS or are new:  
a. there is no provision regarding geographical indication s; 
b. on trademarks (Section B), protection granted by a registration is increased to no less 
than 10 years (7 years under the TRIPS Agreement) and additional discipl ines address 
registration procedures. Well known marks are further protected; it is clarified that 
trademarks apply to unregistered well known trademarks ; there is a prohibition to require 
recordation of licenses to establish their validity, to assert any rights in a trademark, or 
for other purposes ; and the registration of a trademark that is identical or similar to a 
well-known trademark shall be refused or cancelled;  
c. novel disciplines on  patents (Section C) include e.g . restricting the use by third person s of 
the subject matter of a subsisting patent for generating information in the context of 
marketing approval of a pharmaceutical or agricultural chemical product ;36 a grace period 
applicable when determining the novel nature of an invention, and providing criteria for 
granting a patent to a claimed invention.   
 
36 Less precise but related disciplines are included in paragraph 3 of Article 39 of the TRIPS Agreement . WT/REG452/1 /Rev.1  
 
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  d. on pharmaceutical or agricultural chemical products  (Section D):  
i. national treatment applies to undisclosed data provided in the c ontext of marketing 
approval for such new products; and  
ii. a minimum term of protection of five years  for pharmaceutical products  and 10 years  
for agricultural chemical products  is considered " satisfactory ";  
e. on designs ( Section E ), the Agreement extends the protection to the use, for commercial 
purposes, of a copied product and of an unregistered appearance of a product;  
f. on copyright and related rights (Section G), a main change is the extension of the term of 
protection to 70 yea rs (from 50 years under the TRIPS Agreement). T he rights of 
reproduction and distribution of phonograms are harmonized for authors, performers and 
producers . Numerous other provisions have been added if compared to the TRIPS 
Agreement on e.g. technological  protection measures, protection of encrypted program -
carrying satellite signals, etc ; 
g. the TRIPS obligations regarding plant varieties  (Article 27.3(b)) applies , though not 
specifically stated  in the Chapter . A best endeavour provision call s on the Parties  to accede 
to the  International Convention for the Protection of New Varieties of Plants (1991) . As of 
November 2021, Korea, Costa Rica and Panama were signatories to the Convention and 
Honduras was in the process of acceding.37 A footnote to that Article 15.2 clarifies that for 
El Salvador, an effective protection of plant varieties either by patents, a sui generis  
system, or by any combination thereof by the date of entry into  force of t he Agreement 
shall be considered to be con sistent with this Chapter.   
5.29.   Detailed disciplines on enforcement of intellectual property rights are contained in Section H . 
Novel provisions provide for effective action against infringement in the digital environment (Articles 
15.69 and 15.70).  
5.30.   A Committe e on Intellectual Property Rights i s established ( Section J ). 
5.10  Competition  
5.31.   Chapter 20 requires the Parties to adopt or maintain and enforce, in a non -discriminatory 
manner, national competition laws that proscribe anticompetitive practices. Procedural fairn ess, 
including access to an independent review or appeal, is required. Appropriate actions shall be taken 
towards promoting an efficient functioning of the markets and consumer welfare.  
5.32.   The Parties agree to cooperate on the enforcement on their respective competition legislation 
and policies. Accordingly, the Chapter contains provisions on notification , consultation, exchange of 
information and technical assistance.   
5.33.   The Agreement's dispute settlement mechanism does not apply to the Competition Chapter 
(Article 20.10 ). 
5.10.1   State -owned enterprises (SOEs) and designated monopolies  
5.34.   State enterprises and/or designated monopolies  are subject to the Parties' competition 
legislation . Thus, they shall not adopt or maintain any anticompetitive practice (as referred to in 
Article 20.1.2 ) that affect s trade between the Parties, insofar as this does not obstruct the 
performance, in law or in fact, of the tasks assigned to them  (Article 20.9).   
5.35.   Accordingly, al l provisions specified in pa ragraphs 5.31.  5.33.   above  apply to SOEs and 
designated monopolies.  
 
37 See https://www.upov.int/export/sites/upov/members/en/pdf/status.pdf . WT/REG452/1 /Rev.1  
 
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  5.11  Environment  
5.36.   Chapter 17 on Environment aims at strengthening  the Parties' trade relations and cooperation 
in a way that promotes sustainable development . It reaffirms their sovereign  right to regulate and 
set their own levels of environment al protection , policies and priorities , and to adopt or modify 
accordingly their environmental laws, regulations and policies . Further, it  notes that compliance with 
the Chapter's commitments shall take into account their different level of development.   
5.37.   The Chapter includes a series of environment -related principles, best endeavour provisions 
and specific commitments  as follows :  
a. general pr inciples and best endeavour  commitments : 
i. seek mutually supportive trade and environmental policies;  
ii. maintain high levels of environmental protection and of sustainable use of natural  
resources ; and 
iii. laws, regulations and policies consistent and in complianc e with multilateral 
environmental agreements . 
b. specific commitment s: 
i. not to relax or fail to enforce environmental laws as an incentive to trade and 
investment promotion ; 
ii. environmental laws and  policies  shall not be used  in a manner that constitutes a means 
of arbitrary or unjustifiable discrimination  between the Parties or a disguised restriction 
on trade or investment ;  
iii. environmental laws shall provide for a  fair, equitable  and transparent public 
participation mechanism , and interested persons shall have access to tribunals 
regarding the enforcement of environmental laws ; and  
iv. environmental measures that affect trade or investment will be developed in a 
transparent manner . 
5.38.   Article 17.5 clarifies that the Agreement does not empower a Party's authority to carry out 
activities oriented towards the enforcement of environmental legislation in the territory of the other 
Party.   
5.39.   The Chapter provides for the promotion of cooperation among the Parties on environmen tal 
issues  and for consultations to take place on matters related to its implementation and 
interpretation.  An Environmental Committee is established in Article 17.8.  
5.40.   The Agreement's dispute settlement mechanism does not apply to Chapter 17 on Environment 
(paragraph 5 of Article 17.1).  
5.12  Labour  
5.41.   Chapter 16 on Labour uses a cooperative approach to promote sustainable development 
taking into account  the Parties' different level s of development. The Chapter does not aim at 
harmonizing labour standards , but to strengthen their trade relations and cooperation . 
5.42.   The Parties reaffirm their obligations as members of the International Labour Organization  
(ILO). The Chapter reaffirms the Parties' sovereign rights to set their own labour laws, regulations 
and practices, wh ile including a best endeavour clause for adopting labour rights included in the ILO 
Declaration.  WT/REG452/1 /Rev.1  
 
- 63 - 
 
  5.43.   The Parties commit not to relax or fail to enforce labour laws as an incentive to trade and 
investment promotion. They also commit not to use such laws, regu lations , practices  and labour 
policies for trade protectionist purposes.  
5.44.   The Parties are to allow adequate public participation and access to tribunals as regards labour 
laws as specified under paragraph 5.37.  b.iii above , mutatis mutan dis. 
5.45.   The Chapter provides for the promotion of cooperation among the Parties on labour issues 
and for consultations to take place on matters related to its implementation and interpretation. A 
Labour Committee is established in Article 16.4.  
5.46.   The Agreement's dispute settlement mechanism does not apply to Chapter 1 6 on Labour 
(paragraph 5 of Article 1 6.5). 
5.13  Electronic commerce  
5.47.   Disciplines on electronic commerce are found in Chapter 14.  
5.48.   Digital products transmitted electronically as well as an origina ting digital product fixed in a 
carrier medium38 are exempted from the payment of customs dut ies, fees or other charges on 
importation; internal taxes may however be imposed.   
5.49.   National treatment applies for digital products transmitted electronically, unle ss listed in the 
schedules of non -conforming measures.  
5.50.   The importance of maintaining legislation for the  protection of consumers and of personal 
information is recognized but the Agreement  does not require the  Parties to adopt such legislation.  
5.51.   Each Party  shall endeavo ur to accept electronic versions of trade administration documents  
and invite the Parties to make electronic versions of trade administration documents publicly 
available.  The Parties recognize the importance of cooperation mechanisms on issu es arising from 
electronic commerce as well as the importance of exchanging related information and to participate 
in regional and multilateral fora to promote the development of electronic commerce . 
5.52.   The Chapter has no provision on local requirements for c omputing facilities nor on source 
code.  
5.53.   In the event of an inconsistency between Chapter 14 and another Chapter, the latter shall 
prevail.  
5.14  Small and medium -sized enterprises  
5.54.   The Agreement does not include a specific chapter  on Small and medium -sized Enterprises. 
However, Parties recognize the importance of supporting and promoting the development of micro, 
small and medium sized enterprises (MSMEs.  Cooperation is foreseen so that MSMEs can overcome 
the obstacles they face in  the use of electronic commerce; furthermore, the cooperation chapter 
refers to them as a specific topic of cooperation . 
5.15  Cooperation  
5.55.   Chapter 19 on Cooperation supplements cooperation activities already dealt with in specific 
Chapters. The Chapter  provides an illustrative list of sectors to be given priority in terms of 
cooperation (Article 19.6 ). Implementation of the Chapter involves the designation of focal points 
and the establishment of a Cooperation Committee, tasked with the establishment of work plan s for 
the development of cooperation . 
 
38 Relevant HS codes are specified i n Annex14 -A. WT/REG452/1 /Rev.1  
 
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  5.56.   Four priority areas  for cooperation are singled -out - namely MSMEs ; audiovisual co -production 
and services; improvement of the business environment; and the healthcare industry including 
pharmaceuticals, medical device s and cosmetics (respectively in Annexes 19 -A to 19 -D).  
5.57.   The Agreement's dispute settlement mechanism does not apply to the Cooperation Chapter 
(Article 19.7)WT/REG452/1  
 
- 65 - 
 
  ANNEX 1  
1. Table s A1.1-A1.2 show the Parties ' tariff liberalization under the Agreement by total, 
agricultural and industrial products. Applied MFN rates in 2019, 2020 or 2021, as relevant, as well 
as for the most recent year available in WTO's IDB serve as a comparison.  
2. Prior to the Agreement's entry  into force, around 20% of Korea's tariff lines (overall) were 
duty-free. Upon its entry into force, this figure  increased to around 80% as regards Central American 
Parties. Corresponding a verage preferential tariffs were lower by around 5  percentage points , from 
an MFN rate of 13.9%. The average preferential tariff for industrial products w as 0.7% , down from 
the MFN rate of 6%; for agricultural goods, the reduction was from 50.7% to  46.6% in the case of 
El Salvador and around 48% for the o ther four countries . At the end of liberalization, the share of 
duty-free lines for imports from Central American Parties  is expected to increase to around 95% -
96% overall, between 74.8% and 77% for agricultural products (El Salvador and Nicaragua 
respecti vely) and to 9 9.8% for industrial products.  
Table A1.1 Korea: Indicators of MFN tariff rates and preferential rates for bilateral imports  
Origin 
of goods  Year ALL PRODUCTS  HS Chapters 1 -24 HS Chapters 25 -97 
Average 
applied tariff  Share 
of 
duty-
free 
tariff 
lines 
(%) Average 
applied tariff  Share of 
duty-
free 
tariff 
lines 
(%) Average 
applied tariff  Share of 
duty-
free 
tariff 
lines 
(%) Overall (%)  
On dutiable 
(%) 
Overall (%)  
On dutiable 
(%) 
Overall (%)  
On dutiable 
(%) 
MFN 2019  13.9 17.3 19.8 50.7 51.9 2.5 6.0 7.9 23.6 
Costa  2019 9.1 44.3 79.5 48.0 52.6 8.8 0.7 13.6 94.7 
Rica 2020 8.7 42.5 79.5 46.2 50.7 8.8 0.7 12.3 94.7 
 2021 8.3 43.3 80.8 44.4 49.8 10.8 0.6 13.9 95.8 
 2022 8.0 41.5 80.8 42.7 47.8 10.8 0.5 12.9 95.8 
 2023 7.6 52.8 85.5 40.9 58.3 29.7 0.5 20.1 97.5 
 2024 7.4 51.5 85.5 40.0 56.9 29.7 0.5 19.4 97.5 
 2025 7.3 54.5 86.7 39.0 60.8 35.9 0.5 19.2 97.6 
 2026 7.1 53.3 86.7 38.1 59.5 35.9 0.4 18.4 97.6 
 2027 6.9 52.1 86.7 37.3 58.2 35.9 0.4 17.7 97.6 
 2028 6.8 69.2 90.2 36.5 68.2 46.5 0.4 96.7 99.6 
 2029 6.7 68.2 90.2 36.0 67.2 46.5 0.4 96.1 99.6 
 2030 6.6 109.7  94.0 35.5 106.7  66.8 0.4 228.5  99.8 
 2031 6.6 109.1  94.0 35.3 106.1  66.8 0.4 228.5  99.8 
 2032 6.5 108.5  94.0 35.1 105.5  66.8 0.4 228.5  99.8 
 2033 6.5 135.1  95.2 34.9 132.0  73.6 0.4 241.9  99.8 
 2034-
2036 6.5 145.8  95.6 34.8 142.7  75.6 0.4 241.9  99.8 
 2037 6.5 146.1  95.6 34.8 143.0  75.7 0.4 241.9  99.8 
Honduras  2019 9.1 44.5 79.6 48.2 52.8 8.8 0.7 13.7 94.8 
 2020 8.7 42.8 79.6 46.5 51.0 8.8 0.7 12.5 94.8 
 2021 8.4 43.9 80.8 44.9 50.5 11.1 0.6 13.9 95.8 
 2022 8.1 42.2 80.8 43.4 48.8 11.1 0.5 12.9 95.8 
 2023 7.8 53.9 85.5 41.8 59.5 29.7 0.5 20.1 97.5 
 2024 7.6 52.6 85.5 40.8 58.1 29.7 0.5 19.4 97.5 
 2025 7.4 55.4 86.6 39.8 61.8 35.6 0.5 19.2 97.6 
 2026 7.2 54.2 86.6 39.0 60.5 35.6 0.4 18.4 97.6 
 2027 7.1 53.1 86.7 38.2 59.3 35.7 0.4 17.7 97.6 
 2028 6.9 69.9 90.1 37.3 68.9 45.8 0.4 96.7 99.6 WT/REG452/1 /Rev.1  
 
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  Origin 
of goods  Year ALL PRODUCTS  HS Chapters 1 -24 HS Chapters 25 -97 
Average 
applied tariff  Share 
of 
duty-
free 
tariff 
lines 
(%) Average 
applied tariff  Share of 
duty-
free 
tariff 
lines 
(%) Average 
applied tariff  Share of 
duty-
free 
tariff 
lines 
(%) Overall (%)  
On dutiable 
(%) 
Overall (%)  
On dutiable 
(%) 
Overall (%)  
On dutiable 
(%) 
 2029 6.8 68.8 90.1 36.7 67.8 45.8 0.4 96.1 99.6 
 2030 6.7 109.9  93.9 36.1 106.9  66.2 0.4 228.5  99.8 
 2031 6.7 109.0  93.9 35.9 106.1  66.2 0.4 228.5  99.8 
 2032 6.6 108.3  93.9 35.6 105.3  66.2 0.4 228.5  99.8 
 2033 6.6 134.8  95.1 35.3 131.6  73.2 0.4 241.9  99.8 
 2034 6.5 143.6  95.4 35.2 140.5  75.0 0.4 241.9  99.8 
Nicaragua  2019 9.1 44.2 79.5 48.1 52.7 8.8 0.7 13.5 94.6 
 2020 8.7 42.4 79.5 46.3 50.8 8.8 0.7 12.2 94.6 
 2021 8.3 43.5 80.8 44.6 50.1 11.0 0.6 13.9 95.8 
 2022 8.0 41.8 80.8 42.9 48.2 11.0 0.5 12.9 95.8 
 2023 7.7 53.2 85.6 41.2 58.7 29.8 0.5 20.1 97.5 
 2024 7.5 51.8 85.6 40.1 57.1 29.8 0.5 19.4 97.5 
 2025 7.3 54.4 86.7 39.0 60.7 35.7 0.5 19.2 97.6 
 2026 7.1 53.1 86.7 38.1 59.2 35.7 0.4 18.4 97.6 
 2027 6.9 51.7 86.7 37.1 57.7 35.7 0.4 17.7 97.6 
 2028 6.7 69.0 90.3 36.2 68.0 46.8 0.4 96.7 99.6 
 2029 6.6 67.8 90.3 35.5 66.7 46.8 0.4 96.1 99.6 
 2030 6.5 109.2  94.1 34.9 106.2  67.2 0.4 228.5  99.8 
 2031 6.4 108.1  94.1 34.5 105.1  67.2 0.4 228.5  99.8 
 2032 6.4 107.1  94.1 34.1 104.0  67.2 0.4 228.5  99.8 
 2033 6.3 132.9  95.3 33.8 129.6  73.9 0.4 241.9  99.8 
 2034-
2036 6.3 148.1  95.8 33.6 144.9  76.8 0.4 241.9  99.8 
 2037 6.3 149.0  95.8 33.6 145.8  77.0 0.4 241.9  99.8 
MFN 2020  13.9 17.3 19.8 50.7 51.9 2.5 6.0 7.9 23.6 
El 2020 8.8 42.9 79.6 46.6 51.2 9.0 0.7 12.4 94.7 
Salvador  2021 8.8 42.8 79.6 46.6 51.2 9.0 0.7 12.3 94.7 
 2022 8.4 44.3 81.0 45.0 51.1 12.0 0.6 13.9 95.8 
 2023 8.1 42.7 81.0 43.4 49.3 12.0 0.5 12.9 95.8 
 2024 7.8 54.2 85.6 41.9 59.9 30.0 0.5 20.1 97.5 
 2025 7.6 52.9 85.6 40.9 58.5 30.0 0.5 19.4 97.5 
 2026 7.4 56.0 86.7 40.0 62.6 36.1 0.5 19.2 97.6 
 2027 7.3 54.8 86.7 39.2 61.3 36.1 0.4 18.4 97.6 
 2028 7.1 53.8 86.8 38.4 60.2 36.3 0.4 17.7 97.6 
 2029 7.0 70.7 90.2 37.6 69.7 46.1 0.4 96.7 99.6 
 2030 6.9 69.7 90.2 37.0 68.7 46.2 0.4 96.1 99.6 
 2031 6.8 110.6  93.9 36.5 107.7  66.2 0.4 228.5  99.8 
 2032 6.7 109.9  93.9 36.2 106.9  66.2 0.4 228.5  99.8 
 2033 6.7 109.7  93.9 35.9 106.8  66.3 0.4 228.5  99.8 
 2034 6.6 137.2  95.2 35.7 134.1  73.4 0.4 241.9  99.8 
 2035 6.6 144.5  95.4 35.6 141.5  74.8 0.4 241.9  99.8 
MFN 2021  13.9 17.3 19.8 50.7 51.9 2.5 6.0 7.9 23.5 
Panama  2021 13.9 17.3 19.8 50.7 51.9 2.5 6.0 7.9 23.5 
 2021 9.1 44.1 79.5 48.0 52.6 8.8 0.7 13.5 94.6 
 2022 8.7 42.3 79.5 46.2 50.7 8.8 0.7 12.2 94.6 WT/REG452/1  
 
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  Origin 
of goods  Year ALL PRODUCTS  HS Chapters 1 -24 HS Chapters 25 -97 
Average 
applied tariff  Share 
of 
duty-
free 
tariff 
lines 
(%) Average 
applied tariff  Share of 
duty-
free 
tariff 
lines 
(%) Average 
applied tariff  Share of 
duty-
free 
tariff 
lines 
(%) Overall (%)  
On dutiable 
(%) 
Overall (%)  
On dutiable 
(%) 
Overall (%)  
On dutiable 
(%) 
 2023 8.3 43.4 80.9 44.4 50.0 11.1 0.6 13.9 95.8 
 2024 8.0 41.7 80.9 42.7 48.1 11.1 0.5 12.9 95.8 
 2025 7.6 53.7 85.8 41.0 59.4 31.0 0.5 20.1 97.5 
 2026 7.5 52.5 85.8 40.1 58.1 31.0 0.5 19.4 97.5 
 2027 7.3 55.6 86.9 39.1 62.2 37.1 0.5 19.2 97.6 
 2028 7.1 54.4 86.9 38.3 60.9 37.1 0.4 18.4 97.6 
 2029 7.0 53.3 86.9 37.5 59.7 37.1 0.4 17.7 97.6 
 2030 6.8 71.7 90.5 36.7 70.8 48.1 0.4 96.7 99.6 
 2031 6.7 70.9 90.5 36.3 69.9 48.1 0.4 96.1 99.6 
 2032 6.7 116.4  94.3 35.9 113.4  68.4 0.4 228.5  99.8 
 2033 6.6 115.9  94.3 35.7 112.9  68.4 0.4 228.5  99.8 
 2034 6.6 115.4  94.3 35.6 112.4  68.4 0.4 228.5  99.8 
 2035 6.6 140.2  95.3 35.4 137.1  74.2 0.4 241.9  99.8 
 2036-
2038 6.6 148.3  95.6 35.4 145.3  75.7 0.4 241.9  99.8 
 2039 6.6 149.1  95.6 35.4 146.1  75.8 0.4 241.9  99.8 
Note:  Tariff lines subject to in -quota rates are excluded in the computation; For the calculation of 
averages, specific rates are excluded, and the ad valorem  parts of alternate rates are included.  
 Based on the HS 2017 nomenclature.  
Source:  WTO estimates based on the data provided by Korean authorities.  
 
3. Figures from Central American countries are somewhat diverse. Prior to the Agreement's entry 
into force , slightly less than half of the tariff lines (overall) were MFN duty -free. Upon its entry i nto 
force, that was increased to a range from 51.8% (El Salvador) to 68.2% (Costa Rica). Average 
preferential tariffs faced by imports from Korea decreased by around 1 to 2 percentage points, 
depending on the country (from MFN rates of around 6%)  with aver age tariffs on imports of 
agricultural products being around double those for industrial goods . The d ecrease in terms of 
percentage points was higher for agricultural products in El Salvador, Nicaragua and Panama, while 
in Costa Rica and Honduras  that was the case for  industrial products. At the end of liberalization, 
the share of duty -free lines for imports from Korea is expected to increase to around 95% -96% 
overall, between 80% and 90.5% for agricultural products and more than 98% for industrial 
products . 
Table A1. 2 Central America: Indicators of MFN tariff rates and preferential rates for 
bilateral imports  
Origin 
of goods  Year ALL PRODUCTS  HS Chapters 1 -24 HS Chapters 25 -97 
Average 
applied tariff  Share 
of 
duty-
free 
tariff 
lines 
(%) Average 
applied tariff  Share of 
duty-
free 
tariff 
lines 
(%) Average 
applied tariff  Share of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) 
On 
dutiable 
(%) 
Overall 
(%) 
On 
dutiable 
(%) 
Overall 
(%) 
On 
dutiable 
(%) 
COSTA RICA  
MFN 2019 5.9 11.8 49.5 13.3 17.0 22.1 4.4 9.8 55.3 
Korea  2019 4.0 12.5 68.2 12.4 17.2 28.3 2.2 9.4 76.7 
 2020 3.6 11.4 68.2 11.6 16.2 28.3 1.9 8.2 76.7 
 2021 3.2 10.3 68.4 10.8 15.2 29.1 1.6 7.0 76.8 
 2022 2.9 9.1 68.4 10.0 14.2 29.1 1.4 5.8 76.8 
 2023 2.5 10.0 75.1 9.3 14.6 36.5 1.1 6.4 83.3 
 2024 2.3 9.1 75.1 8.7 13.7 36.5 0.9 5.4 83.3 WT/REG452/1 /Rev.1  
 
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  Origin 
of goods  Year ALL PRODUCTS  HS Chapters 1 -24 HS Chapters 25 -97 
Average 
applied tariff  Share 
of 
duty-
free 
tariff 
lines 
(%) Average 
applied tariff  Share of 
duty-
free 
tariff 
lines 
(%) Average 
applied tariff  Share of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) 
On 
dutiable 
(%) 
Overall 
(%) 
On 
dutiable 
(%) 
Overall 
(%) 
On 
dutiable 
(%) 
 2025 2.0 8.2 75.2 8.1 12.8 37.0 0.7 4.5 83.3 
 2026 1.8 7.2 75.2 7.5 11.9 37.0 0.6 3.5 83.3 
 2027 1.6 6.3 75.2 6.9 10.9 37.0 0.4 2.6 83.3 
 2028 1.3 13.6 90.2 6.3 20.2 68.9 0.3 5.3 94.8 
 2029 1.3 13.2 90.2 6.2 19.8 68.9 0.3 4.8 94.8 
 2030 1.2 12.8 90.3 6.1 19.6 69.1 0.2 4.3 94.8 
 2031 1.2 12.4 90.3 5.9 19.2 69.1 0.2 3.8 94.8 
 2032 1.2 12.0 90.3 5.8 18.9 69.1 0.2 3.4 94.8 
 2033 1.1 22.4 95.0 5.7 26.9 78.8 0.2 9.5 98.4 
 2034 1.1 23.1 95.1 5.7 28.2 79.8 0.2 9.5 98.4 
 2037 1.1 23.2 95.2 5.7 28.3 79.9 0.2 9.5 98.4 
EL SALVADOR  
MFN 2020 6.3 12.0 47.7 13.0 16.2 19.6 4.8 10.5 53.8 
Korea  2020 5.3 11.1 51.8 11.2 15.3 27.2 4.1 9.5 57.2 
 2021 4.8 9.9 51.9 10.2 14.0 27.2 3.6 8.4 57.4 
 2022 4.2 8.8 52.2 9.3 12.9 27.9 3.1 7.3 57.6 
 2023 3.6 7.6 52.2 8.3 11.6 27.9 2.6 6.2 57.6 
 2024 3.1 8.2 62.4 7.4 11.2 34.3 2.1 6.8 68.5 
 2025 2.7 7.2 62.4 6.6 10.0 34.3 1.8 5.9 68.5 
 2026 2.3 6.2 63.1 5.8 8.8 34.3 1.5 5.1 69.4 
 2027 1.9 5.2 63.1 5.0 7.6 34.3 1.3 4.1 69.4 
 2028 1.6 4.2 63.2 4.2 6.4 34.3 1.0 3.2 69.5 
 2029 1.2 11.3 89.6 3.4 28.7 88.2 0.7 6.8 89.9 
 2030 1.1 10.8 89.6 3.3 28.3 88.2 0.6 6.3 89.9 
 2031 1.1 11.1 90.4 3.3 28.4 88.4 0.6 6.3 90.8 
 2032 1.0 10.6 90.4 3.3 28.0 88.4 0.5 5.8 90.8 
 2033 1.0 10.1 90.4 3.2 27.7 88.4 0.5 5.2 90.8 
 2034 0.9 19.2 95.2 3.2 33.7 90.5 0.4 11.3 96.2 
HONDURAS  
MFN 2019 5.9 11.5 48.2 11.6 14.4 19.7 4.7 10.3 54.2 
Korea  2019 3.9 10.8 64.3 10.1 13.9 27.5 2.5 9.1 72.0 
 2020 3.4 9.6 64.3 9.2 12.7 27.5 2.2 7.9 72.0 
 2021 3.0 8.4 64.3 8.4 11.6 27.5 1.9 6.6 72.0 
 2022 2.6 7.2 64.3 7.6 10.4 27.5 1.5 5.4 72.0 
 2023 2.1 8.1 73.6 6.7 10.8 37.3 1.2 6.3 81.3 
 2024 1.9 7.2 73.6 6.2 9.8 37.3 1.0 5.4 81.3 
 2025 1.7 6.3 73.6 5.6 8.9 37.3 0.9 4.5 81.3 
 2026 1.4 5.6 74.1 5.0 7.9 37.3 0.7 3.8 82.0 
 2027 1.2 4.7 74.1 4.4 7.0 37.3 0.5 3.0 82.0 
 2028 1.0 11.2 91.2 3.8 17.1 77.8 0.4 6.5 94.1 
 2029 0.9 10.8 91.2 3.7 16.8 77.8 0.4 6.0 94.1 
 2030 0.9 10.4 91.2 3.7 16.5 77.8 0.3 5.6 94.1 
 2031 0.9 10.0 91.2 3.6 16.2 77.8 0.3 5.1 94.1 
 2032 0.8 9.7 91.2 3.5 15.9 77.8 0.3 4.7 94.1 
 2033 0.8 18.2 95.5 3.5 22.4 84.5 0.3 11.8 97.9 
 2034 0.8 18.5 95.6 3.5 22.4 84.5 0.3 12.2 97.9 
NICARAGUA  
MFN 2019 5.9 11.5 48.7 12.0 14.9 19.5 4.6 10.3 54.9 
Korea  2019 4.9 10.6 53.6 10.5 14.3 27.1 3.8 9.2 59.2 
 2020 4.4 9.4 53.6 9.7 13.3 27.1 3.3 8.0 59.2 
 2021 3.8 8.3 53.8 8.9 12.4 28.2 2.8 6.8 59.3 
 2022 3.3 7.1 53.8 8.1 11.3 28.2 2.3 5.5 59.3 
 2023 2.7 7.8 64.7 7.4 11.4 35.4 1.8 6.0 71.0 
 2024 2.4 6.8 64.7 6.8 10.5 35.4 1.5 5.0 71.0 
 2025 2.1 6.1 66.6 6.2 9.7 36.2 1.2 4.4 73.0 
 2026 1.7 5.2 66.6 5.6 8.8 36.2 0.9 3.4 73.0 
 2027 1.4 4.2 66.6 5.1 7.9 36.2 0.6 2.4 73.0 
 2028 1.1 10.6 89.7 4.5 17.4 74.2 0.4 5.3 93.0 
 2029 1.0 10.1 89.7 4.4 17.1 74.2 0.3 4.6 93.0 
 2030 1.0 9.8 89.9 4.3 17.3 74.9 0.3 4.0 93.1 
 2031 0.9 9.3 89.9 4.3 17.0 74.9 0.2 3.3 93.1 WT/REG452/1  
 
- 69 - 
 
  Origin 
of goods  Year ALL PRODUCTS  HS Chapters 1 -24 HS Chapters 25 -97 
Average 
applied tariff  Share 
of 
duty-
free 
tariff 
lines 
(%) Average 
applied tariff  Share of 
duty-
free 
tariff 
lines 
(%) Average 
applied tariff  Share of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) 
On 
dutiable 
(%) 
Overall 
(%) 
On 
dutiable 
(%) 
Overall 
(%) 
On 
dutiable 
(%) 
 2032 0.9 8.8 89.9 4.2 16.8 74.9 0.2 2.7 93.1 
 2033 0.8 17.7 95.3 4.1 22.6 81.7 0.1 7.4 98.2 
 2034 0.8 20.7 96.0 4.1 23.7 82.6 0.1 11.3 98.8 
 2035 0.8 20.7 96.0 4.1 23.6 82.6 0.1 11.3 98.8 
 2037 0.8 20.8 96.0 4.1 23.8 82.7 0.1 11.3 98.8 
PANAMA  
MFN 2021 6.8 12.6 45.5 15.1 18.6 18.9 4.9 10.3 51.6 
Korea  2021 4.6 12.4 62.8 12.8 18.0 29.0 2.7 9.3 70.6 
 2022 4.1 11.2 62.8 12.0 16.8 29.0 2.3 8.0 70.6 
 2023 3.7 10.0 63.2 11.0 15.7 29.7 1.9 6.8 71.0 
 2024 3.2 8.6 63.2 10.1 14.3 29.7 1.6 5.4 71.0 
 2025 2.6 11.4 76.7 9.1 20.3 54.9 1.2 6.3 81.7 
 2026 2.5 10.5 76.7 8.8 19.6 54.9 1.0 5.3 81.7 
 2027 2.3 9.8 76.9 8.5 19.0 55.0 0.8 4.5 82.0 
 2028 2.1 9.0 76.9 8.3 18.3 55.0 0.6 3.5 82.0 
 2029 1.9 8.1 76.9 8.0 17.7 55.0 0.5 2.6 82.0 
 2030 1.7 17.7 90.5 7.7 25.0 69.3 0.3 6.4 95.4 
 2031 1.6 17.3 90.5 7.5 24.6 69.3 0.3 5.9 95.4 
 2032 1.6 17.0 90.6 7.4 24.3 69.3 0.2 5.6 95.5 
 2033 1.6 16.6 90.6 7.3 23.9 69.3 0.2 5.1 95.5 
 2034 1.5 16.2 90.6 7.2 23.5 69.3 0.2 4.6 95.5 
 2035 1.5 29.5 95.0 7.1 39.8 82.1 0.2 9.0 97.9 
 2036 1.5 30.3 95.1 7.1 40.5 82.4 0.2 9.4 98.0 
Note:  Based on the HS 2012 (CRI, HND, NIC ) and 2017 nomenclatures (SLV, PAN).  
Source:  WTO estimates based on data provided by the authorities (CRI, SLV, PAN) or constructed by the 
WTO Secretariat (HND, NIC).  
4. Tables A1.3a -3.c show the market access opportunities in Korea for the top 25 exports of each 
Central America Party in 2016 -2018. These products accounted for  between 53% (El Salvador) and 
to 74.4% (Panama) of each Central American Party 's global exports . At the end of the transition 
period, all five Parties will have products remai ning dutiable in Korea : one from Nicaragua, two from 
El Salvador and Panama, three from Honduras and four from Costa Rica. In terms of global exports, 
these products account ed for between 0.7% (Costa Rica) and 9.6% of exports (Honduras), and in 
Korea their average MFN rates range between 6 .3% to 83.7%  with the highest average tariff 
concer ning the only dutiable industrial product (HS 2710.19 , petroleum oils ). 
Table A1. 3a Korea: Market access opportunities under the agreement for Nicaragua 's top 
25 expo rts to the world  
Nicaragua's top export products in 2016 -2018  Access Conditions to Korea's import 
markets  
HS 
code  Share in 
global 
exports 
(%) MFN 2019  Duty -free under the Agreement  
Remain 
dutiable  
Avg. MFN 
applied 
rate (%)  No. of lines  
2019  
2021  
2023  
2028  
2033  
2034  
2037  
Duty -
free Dutiable  
854430  4.5 13  1  1       
610323  4 13  1 1        
902190  3.6 13 3          
020629  3.6 0  3      3   
843010  3 3 1          
640391  2.9 13  5   5      
090111  2.8 0  1 1        
847090  2.6 2 3          
392112  2.5 13  1 1        
710812  2.5 13  2   2      
391740  2.3 6.5  1 1        
040900  2 20  1      1   
610910  1.9 13  2 1 1       WT/REG452/1 /Rev.1  
 
- 70 - 
 
  Nicaragua's top export products in 2016 -2018  Access Conditions to Korea's import 
markets  
HS 
code  Share in 
global 
exports 
(%) MFN 2019  Duty -free under the Agreement  
Remain 
dutiable  
Avg. MFN 
applied 
rate (%)  No. of lines  
2019  
2021  
2023  
2028  
2033  
2034  
2037  
Duty -
free Dutiable  
700719  1.8 8  2 2        
020230  1.6 13  1       1  
721691  1.6 5 1          
100610  1.4 8.3  1        1 
610990  1.3 7.7  8 7 1       
843039  1.3 8 1          
630293  1.2 10  1 1        
240210  1.2 6.5  3    2 1    
392113  1.2 6.3  1 1        
010121  1.2 13 1 1   1      
330420  1.1 13  2 2        
690290  1.1 10  2 2        
Total  54.1  10 40 20 3 8 2 1 4 1 1 
Note:  Tariff lines subject to in -quota rates are excluded in the computation; For the calculation of averages, 
specific rates are excluded, and the ad valorem  parts of alternate rates are included.  
 Based on the HS 2017 nomenclature.  
Source:  WTO estimates based on the data provided by the Korean authorities and the UNSD, Comtrade 
database.   
  WT/REG452/1 /Rev.1  
 
- 71 - Table A1.3b Korea: Market access opportunities under the agreement for Costa Rica's and Honduras' top 25 exports to the world   
Costa Rica's top export products in 
2016 -2018  Access Conditions to Korea's  
 import markets  Honduras' top export products in 
2016 -2018  Access Conditions to Korea's  
import markets  
HS code  
Share in global 
exports (%)  MFN 2019  Duty -free under the Agreement  
Remain dutiable  
HS 
code  
Share in global 
exports (%)  MFN 2019  Duty -free under the 
Agreement  
Remain dutiable  Avg. MFN 
applied rate (%)  No. of lines  
2019  
2021  
2023  
2025  
2028  
2030  
2033  
2034  
Avg. MFN 
applied rate (%)  No. of lines  
2019  
2021  
2023  
2028  
2030  
2034  Duty -free 
Dutiable  
Duty -free 
Dutiable  
901839  10 8  4 2 2        080510  9.6 50  1       1 
080390  9.7 30  1   1       690911  8.2 8  1 1       
080430  9.2 30  1    1      090111  6.3 2  1 1       
901890  7.4 3.3 7 5 1 4        854430  3.8 8  1 1       
902139  5 0 1           481730  3.4 0 1         
210690  3.9 83.7  20 1  4  3 8   4 121490  2.6 55  4 2      2 
090111  2.9 2  1 1         903149  2.3 0 6         
901831  1.4 8  1 1         030617  2.3 20  4  2  1   1 
901819  1.3 0 6           691390  2.1 8  3 3       
401110  1.2 5  3 3         060390  2.1 25  1      1  
961900  1.2 7.1 2 6  6        080390  1.9 30  1   1     
300490  1.1 8  7 2 5        081400  1.9 30  2     2   
854449  1 5.3 3 6  6        711711  1.8 8  1 1       
200941  1 50  1     1     151110  1.7 3  1 1       
151110  0.9 3  1 1         680221  1.5 8  3 2 1      
200899  0.8 34.4  7   1 1  2 1  2 844319  1 8  3 3       
071410  0.8 747  6   3  3     320649  0.8 6.5  7 7       
170114  0.8 3  2 2         710812  0.7 3  2   2     
701090  0.8 8  1  1        271113  0.6 3  1 1        
  WT/REG452/1 /Rev.1  
 
- 72 - Costa Rica's top export products in 
2016 -2018  Access Conditions to Korea's  
 import markets  Honduras' top export products in 
2016 -2018  Access Conditions to Korea's  
import markets  
HS code  
Share in global 
exports (%)  MFN 2019  Duty -free under the Agreement  
Remain dutiable  
HS 
code  
Share in global 
exports (%)  MFN 2019  Duty -free under the 
Agreement  
Remain dutiable  Avg. MFN 
applied rate (%)  No. of lines  
2019  
2021  
2023  
2025  
2028  
2030  
2033  
2034  
Avg. MFN 
applied rate (%)  No. of lines  
2019  
2021  
2023  
2028  
2030  
2034  Duty -free 
Dutiable  
Duty -free 
Dutiable  
902190  0.7 0 3           848190  0.6 8  1 1       
081190  0.7 30  4   1      3 340119  0.6 6.5  3 3       
210390  0.7 27.1  9     1 4 1 1 2 760410  0.6 8  3 3       
401693  0.6 8  1  1        481159  0.6 0 1         
080719  0.6 45  1     1     730429  0.6 0 1         
392690  0.6 6.5  7 3 4        691090  0.6 8  1 1       
Total 64.2  22 95 17 29 10 2 9 14 2 1 11 Total 58.1  9 45 31 3 3 1 2 1 4 
Note and Source:  As table above.    
  WT/REG452/1 /Rev.1  
 
- 73 - Table A1.3c Korea: Market access opportunities under the agreement for Costa Rica's and Honduras' top 25 exports to the world   
El Salvador 's top export products in 
2016 -2018  Access Conditions to Korea's  
 import markets  Panama's top export products in 2016 -
2018  Access Conditions to Korea's  
import markets  
HS code  
Share in global 
exports (%)  MFN 2020  Duty -free under the Agreement  
Remain dutiable  
HS 
code  
Share in global 
exports (%)  MFN 2021  Duty -free under the 
Agreement  
Remain dutiable  Avg. MFN 
applied rate 
(%) No. of 
lines  
2020  
2022  
2024  
2026  
2029  
2031  
2034  
Avg. MFN 
applied rate 
(%) No. of 
lines  
2021  
2023  
2025  
2027  
2030  
 
2035  
2039  Duty -free 
Dutiable  
Duty -
free 
Dutiabl
e 
610910  11.1 13.0  2 1 1       080390  14.5 30.0  1   1      
611030  4.0 13.0  2 2        440349  6.9 0.0 6          
610711  3.1 13.0  1 1        030616  5.3 20.0  4 2 2       
853221  2.8 0.0 1          230120  4.7 5.0  2   2      
170114  2.7 3.0  2 2        720410  4.1 0.0 1          
610990  2.7 13.0  8 7 1       170113  4.0 3.0  1   1      
481810  2.1 0.0 1          030617  3.4 20.0  4  2   1  1  
090111  2.0 2.0  1 1        220840  2.8 20.0  1 1        
611596  2.0 13.0  1 1        760200  2.8 0.0 1          
611020  1.8 13.0  1 1        151110  2.3 3.0  1 1        
392330  1.6 6.5  1  1       440399  2.1 0.0 11          
160414  1.5 20.0  10  5 1    4  740400  2.1 0.0 1          
611595  1.4 13.0  1 1        020230  2.1 40.0  1       1  
854430  1.4 8.0  1  1       080430  2.0 30.0  1    1     
621210  1.3 13.0  3 3        030289  2.0 20.0  9   5 3 1    
271119  1.3 5.0  1     1    090122  1.9 8.0  1 1        
220299  1.3 8.3  4 1   1  1  1 030219  1.9 20.0  1   1      
190590  1.2 7.7  9  5    4   080711  1.7 45.0  1     1    
300490  1.2 8.0  7 7        150420  1.3 3.0  1   1      
600632  1.1 10.0  1 1        030246  1.2 20.0  1   1      
392321  1.1 6.5  1  1       481910  1.2 0.0 1           
  WT/REG452/1 /Rev.1  
 
- 74 - El Salvador 's top export products in 
2016 -2018  Access Conditions to Korea's  
 import markets  Panama's top export products in 2016 -
2018  Access Conditions to Korea's  
import markets  
HS code  
Share in global 
exports (%)  MFN 2020  Duty -free under the Agreement  
Remain dutiable  
HS 
code  
Share in global 
exports (%)  MFN 2021  Duty -free under the 
Agreement  
Remain dutiable  Avg. MFN 
applied rate 
(%) No. of 
lines  
2020  
2022  
2024  
2026  
2029  
2031  
2034  
Avg. MFN 
applied rate 
(%) No. of 
lines  
2021  
2023  
2025  
2027  
2030  
 
2035  
2039  Duty -free 
Dutiable  
Duty -
free 
Dutiabl
e 
271019  1.1 6.3  41 25 5   10   1 030389  1.1 10.0  20   7 5 4 2  2 
610463  1.0 13.0  1 1        761290  1.1 8.0  4 4        
610343  1.0 13.0  1 1        020610  1.0 18.0  1        1 
600622  1.0 10.0  1  1       300490  1.0 8.0  7  7       
Total  53.0  2 101 56 21 1 1 11 5 4 2 Total  74.4  21 62 9 11 19 9 7 2 2 3 
Note:  Tariff lines subject to in -quota rates are excluded in the computation; For the calculation of averages, specific rates are excluded, and the ad valorem  parts of alternate 
rates are included.  
 Based on the HS 2017 nomenclature.  
Source:  WTO estimates based on the data provided by the Korean authorities, Panama (INEC) and the UNSD, Comtrade database.  
 
5. Tables A1.4a -4.b show the market access opportunities in Central American Parties for Korea's top 25 exports in 2016-2018.1 These products accounted 
for close to half of Korea's global exports; they will all become duty -free in the various Central American markets at the latest by 2030 – that is at least five years 
prior to the end of country -specific transition pe riods.  
Table A1. 4a Costa Rica, Honduras  and Nicaragua: Market access opportunities under the agreement for Korea's top 25 exports to the world  
Korea's top export products  
in 2016 -2018  
 MFN 2019  
Average applied 
rate (%)  MFN 2019  
Duty -free,  
No. of lines  MFN 2019 Dutiable  
Liberalization under the Agreement: Year and CA Party  
HS number and description  Share 
in 
global 
export 
(%) 2019  2023  2025  2026  2028  
CRI HND NIC CRI HND NIC CRI HND NIC CRI HND NIC NIC HND CRI HND NIC 
854232  Electronic integrated 
circuits as memories  10.5 0 0 0 6 6 6            
271019  Medium oils and 
preparations, of  4.7 2.2 2.3 2.3 8 8 8 5         5 5 
 
1 Two tables are needed given t hat differences in HS nomenclature used affect the list of the top 25 products of export interest.   
  WT/REG452/1 /Rev.1  
 
- 75 - Korea's top export products  
in 2016 -2018  
 MFN 2019  
Average applied 
rate (%)  MFN 2019  
Duty -free,  
No. of lines  MFN 2019 Dutiable  
Liberalization under the Agreement: Year and CA Party  
HS number and description  Share 
in 
global 
export 
(%) 2019  2023  2025  2026  2028  
CRI HND NIC CRI HND NIC CRI HND NIC CRI HND NIC NIC HND CRI HND NIC 
870323  Motor cars and other 
motor vehicles  3.6 5.6 15 8 6         3 6 4 4 7 
854231  Electronic integrated 
circuits as processors  3.6 0 0 0 6 6 6            
901380  Liquid crystal devices, 
n.e.s. and other optical  2.5 0 0 0 1 1 1            
890120  Tankers  2.4 0 0 0 1 1 1            
851770  Parts of telephone sets, 
telephones for cellular  1.7 0 0 0 1 1 1            
870899  Parts and accessories, 
for tractors, motor  1.6 9 5 5    1 1    1      
271012  Light oils and 
preparations, of  1.5 2.9 2.9 2.9 3 3 3 4         4 4 
890190  Vessels for the transport 
of goods and vessels for  1.5 4.5 5 5 1 1 1    1 1 1      
847330  Parts and accessories of 
automatic data - 1.4 0 0 0 1 1 1            
852990  Parts suitable for use 
solely or principally with  1.3 7 7.5 7.5 1 1 1         1 1 1 
851712  Telephones for cellular 
networks "mobile  1.3 0 0 0 1 1 1            
290243  p-xylene  1.1 5 5 5    1 1 1         
870322  Motor cars and other 
motor vehicles  1 5.6 5 8 6         2 2 4 8 8 
890520  Floating or submersible 
drilling or production  1 0 0 0 1 1 1            
854890  Electrical parts of 
machinery or apparatus,  0.9 0 0 0 1 1 1            
853400  Printed circuits  0.9 0 0 0 1 1             
847170  Storage units for 
automatic data - 0.9 0 0 0 1 1 1            
854140  Photosensitive 
semiconductor devices,  0.8 0 0 0 1 1 1             
  WT/REG452/1 /Rev.1  
 
- 76 - Korea's top export products  
in 2016 -2018  
 MFN 2019  
Average applied 
rate (%)  MFN 2019  
Duty -free,  
No. of lines  MFN 2019 Dutiable  
Liberalization under the Agreement: Year and CA Party  
HS number and description  Share 
in 
global 
export 
(%) 2019  2023  2025  2026  2028  
CRI HND NIC CRI HND NIC CRI HND NIC CRI HND NIC NIC HND CRI HND NIC 
870332  Motor cars and other 
motor vehicles  0.8 5.6 5 8 6          7 4 3 10 
854239  Electronic integrated 
circuits  0.7 0 0 0 6 6 6            
330499  Beauty or make -up 
preparations and  0.7 14 15 15    1         1 1 
847989  Machines and 
mechanical appliances,  0.7 0 0 0 1 1 1            
870840  Gear boxes and parts 
thereof, for tractors,  0.7 4.5 5 5 1   1 2    2      
 Total of above  47.6    61 42 42 13 4 1 1 1 4 5 15 13 26 36 
Note:  Based on the HS 2012 nomenclature.  
Source:  WTO estimates based on the data provided by authorities (CRI) or constructed by the WTO Secretriat (HND, NIC), WTO -IDB and the UNSD, Comtrade database.  
Table A1. 4b El Salvador and Panama: Market access opportunities under the agreement for Korea's top 25 e xports to the world   
Korea's top export products in  
2016 -2018  Avg. MFN 
applied rate 
(%) MFN 
Duty -free 
No. of lines  MFN Dutiable (2020 or 2021)  
Liberalization under the Agreement: Year and CA Party  
HS number and description  Share in 
global export 
(%) SLV 
2020  PAN 
2021  SLV 
2020  PAN 
2021  2020  2021  2024  2025  2028  2029  2030  
SLV SLV PAN SLV PAN SLV SLV PAN 
854232  Electronic integrated 
circuits as memories  10.5 0 0 6 6         
271019  Medium oils and 
preparations, of  4.7 2.3 8.2 8 4   2  8  5  
854231  Electronic integrated 
circuits as processors  3.6 0 0 6 6         
870323  Motor cars and other 
motor vehicles principally  2.8 16.4 0  6      2 8  
901380  Liquid crystal devices, 
n.e.s. and other optical  2.5 0 10 1 1     2    
890120  Tankers  2.4 0 0 1 1          
  WT/REG452/1 /Rev.1  
 
- 77 - Korea's top export products in  
2016 -2018  Avg. MFN 
applied rate 
(%) MFN 
Duty -free 
No. of lines  MFN Dutiable (2020 or 2021)  
Liberalization under the Agreement: Year and CA Party  
HS number and description  Share in 
global export 
(%) SLV 
2020  PAN 
2021  SLV 
2020  PAN 
2021  2020  2021  2024  2025  2028  2029  2030  
SLV SLV PAN SLV PAN SLV SLV PAN 
851770  Parts of telephone sets, 
telephones for cellular  1.7 0 0 1 1         
870899  Parts and accessories, for 
tractors, motor  1.6 1 2.5  1 1  1      
271012  Light oils and preparations, 
of  1.5 2.9 0 3 12       4  
890190  Vessels for the transport of 
goods and vessels for  1.5 5 5 1 1    1 1    
847330  Parts and accessories of 
automatic data - 1.3 0 0 1 1         
851712  Telephones for cellular 
networks "mobile  1.3 0 0 1 1         
290243  p-xylene  1.1 5 0  1 1        
852990  Parts suitable for use 
solely or principally with  1.1 7.5 1 1 4     1  1  
890520  Floating or submersible 
drilling or production  1 0 0 1 1         
870340  Motor cars and other 
motor vehicles principally  1 30 0  1  1       
854890  Electrical parts of 
machinery or apparatus,  0.9 0 2.5 1 1     1    
853400  Printed circuits  0.9 0 0 1 1         
847170  Storage units for 
automatic data - 0.9 0 0 1 1         
870322  Motor cars and other 
motor vehicles principally  0.8 14.4 0  6      2 8  
854140  Photosensitive 
semiconductor devices,  0.8 0 0 1 1         
870360  Motor cars and other 
motor vehicles principally  0.7 30 0  1  1       
854239  Electronic integrated 
circuits  0.7 0 0 6 6          
  WT/REG452/1 /Rev.1  
 
- 78 - Korea's top export products in  
2016 -2018  Avg. MFN 
applied rate 
(%) MFN 
Duty -free 
No. of lines  MFN Dutiable (2020 or 2021)  
Liberalization under the Agreement: Year and CA Party  
HS number and description  Share in 
global export 
(%) SLV 
2020  PAN 
2021  SLV 
2020  PAN 
2021  2020  2021  2024  2025  2028  2029  2030  
SLV SLV PAN SLV PAN SLV SLV PAN 
330499  Beauty or make -up 
preparations and  0.7 15 6         1 6 
847989  Machines and mechanical 
appliances, n.e.s.  0.7 0 1.5 1 3   3      
  Total of above  46.4   42 68 2 2 6 1 13 4 27 6 
Note:  Based on the HS 2017 nomenclature.  
Source:  WTO estimates based on the data provided by the authorities and the UNSD, Comtrade database.  
__________