WT/REG287/2  
 
4 April 2018 
(18-2047) Page: 1/13 
Committee on Regional Trade Agreements  Original: English/Spanish  
 
FREE TRADE AGREEMENT  BETWEEN THE ASSOCIAT ION OF SOUTHEAST ASI AN NATIONS 
(ASEAN) AND THE REPU BLIC OF KOREA  
(SERVICES)  
QUESTIONS AND REPLIE S 
 The following communication, dated 3 April  2018, is being circulated at the request of the 
delegations of the Republic of Korea, and ASEAN (Brunei Darussalam, Cambodia, Indonesia, 
Lao People's Democratic Republic, Malaysia, Myanmar, Philip pines, Singapore, Thailand, 
and Viet Nam).  
_______________  
 
 
Questions from the delegation  of Canada  
 
1.1.  Table 3.1 : In terms of services commitments, what specific improvements did 
Korea make (compared to its GATS commitments) in the areas of maritime transport 
services, air transport services and other transport ser vices?  
Response from the delegation of the Republic of Korea  
 
 In maritime transport services, Korea has improved the specific commitments in the 
following sectors.  
 
 International Transport Excluding Cabotage (7211*. 721 2*): Korea has removed the 
mode  1 restriction (cargo preference) for b) bulk, tramp and other international shipping. 
In mode 3, Korea has allowed to establish a registered company for the purpose of 
operating a fleet under the national flag of Korea for international maritime cargo 
transpor t. Previously in GATS, Korea was unbound, but in the Korea -ASEAN FTA, Korea 
has allowed foreign companies to establish a commercial presence in the form of Chusik 
Hoesa (stock  companies).  
 Maritime Agency Services (748*): In GATS, Korea has only allowed jo int venture or 
100%  foreign owned company in the stock company form. In  the Korea -ASEAN FTA, all 
forms as stipulated under the commercial act are permitted.  
 Rental of vessels with crew (7213), Pushing and towing (7214), Tally, measuring and 
survey services  (745*): Those are new commitments t hat Korea has included in the 
Korea -ASEAN FTA.  
 In air transport services, Korea has improved the specif ic commitments in the 
following  sectors.  
 Computer reservation services: In GATS, Korea has limited mode 1 commitmen t to access 
through public switched networks only. In the Korea -ASEAN FTA, there are no restrictions 
for mode 1.  
 Selling and Marketing of Air Transport services: In GATS, mode 1 MA and NT were 
Unbound*. Korea has improved these to None in the Korea -ASEAN FTA. WT/REG287/2  
 
- 2 - 
 
   Maintenance and repair of aircraft: This is a newly committed sector in the 
Korea -ASEAN  FTA. 
 In other transport services, Korea has improved the specif ic commitments in the 
following  sector.  
 Combined transport services – Freight forwarding for all transport: In GATS, mode 3 
license was confined to international shipping companies and was subject to ENT. Also, 
business areas were restricted to Pusan and Pukok area. In  the Korea -ASEAN FTA, mode 3 
commitment was improved to "None". 
1.2.   What are the specific new commitments the Republic of Korea took in rail 
transport services?  
 In GATS, there were no commitments for rail transport services (CPC 717). In  the 
Korea -ASEAN FTA, Korea has opened Passenger  transportation (CPC 7111) and Freight 
Transportation (CPC  7112). For both sectors, the commitments are as following: unbound* for 
mode 1, none for mode 2, and "unbound for existing operations, ENT for new operations " for 
mode  3.  
1.3.  Table 3.2 : In terms of services commitments, what specific improvements did 
Brunei make (compared to its GATS commitments) in the area of air transport services?  
Response from the delegation of Brunei Darussalam  
 
 As compared to its GATS commitments, Brunei Darussalam has commit ted an additional 
subsector in the area of air transport services; namely Aircraft Repair and M aintenance Services 
(CPC 8868).  
 
1.4.   What are the specific new commitments Brunei took in maritime transport 
services?  
 For Maritime Transport services, Brunei Daru ssalam has committed International Passenger 
Transport (CPC 7211) and In ternational Freight (CPC 7212).  
 
1.5.  Table 3.4 : In terms of services commitments, what are the specific new 
commitments Indonesia took in air transport services and services auxiliary to a ll modes 
of transport?  
Response from the delegation of Indonesia  
 
 Indonesia took commitments on three subsectors under Air Transport Services, i.e. Aircraft 
Repair and Maintenance Services, Computer Reservation System, and Selling and Marketing.  
 
 There a re no limitation s on mode 1 and 2 for both Market Access and National Treatment, 
also on mode 3 for National Treatment.  
 
 For supplying services on mode 3, foreign services supplier should establish joint venture 
enterprise with maximum equity of 49%.  
 
Natural persons supplying  services under these three sub sectors are obliged by Horizontal 
Commitments, i.e. directors, managers and technical experts/advisers, unless mentioned 
otherwise, are allowed to stay for two years and could be extended for a maximum t wo times 
subject to two years extension each time. Manager and technical experts (intra corporate transfer) 
are allowed based on an economic needs test. The entry and temporary stay of business visitor(s) 
is (are) permitted for a period of 60 days and coul d be extended maximum for 120 days. Any 
foreign natural persons supplying services are subject to charges levied by Governments. Any 
expatriate employed by a joint -venture enterprise, representative's office, and/or other types of 
juridical person and/or a n individual services provider must hold a valid working permit issued by 
the Ministry of Manpower.  
 WT/REG287/2  
 
- 3 - 
 
  1.6.  Table 3.5 : In terms of services commitments, what are the specific GATS -minus 
commitments that Lao PDR took in air transport services?  
Response from the Lao People's Democratic Republic  
 
 Lao PDR has committed Air Transport Services under the WTO, which has not been 
committed under AKTIS: (d) Maintenance and repair of aircraft (part of CPC 8868).  
 
• Selling and marketing of air transport services;  
• Comput er reservation system (CRS) services.  
 The commitments of Lao PDR under AKTIS were made m any years prior to when the 
Lao PDR became a member of the WTO in 2013, so they are lower than the commitments under 
the WTO.  
 
1.7.  Table 3.6 : In terms of services commitme nts, what specific improvements did 
Malaysia make (compared to its GATS commitments) in maritime transport services?  
Response from the delegation of Malaysia  
 
Maritime Transport Services  
 
 In comparison to GATS commitments, Malaysia has improved market acc ess in foreign 
equity from 30% to 49% for the following sectors or subsectors:  
 
i. Passenger transportation (CPC 7211);  
ii. Freight transportation (CPC 7212);  
iii. Vessel salvage and refloating services (CPC74540) (except on inland waters);  
iv. Maritime agency services (C PC 7454*).  
 Malaysia has also made additional offers for the following sectors or subsectors under the 
ASEAN -Korea FTA:  
 
i. Rental of cargo vessels with crew for international shipping (CPC 7213);  
ii. Rental of cargo Vessels without crew (Bareboat Charter) for international shipping 
(CPC 83103); and  
iii. Maintenance and repair vessels (CPC 8868**).  
1.8.   What are the specific new commitments Malaysia took in air transport services and 
services auxiliary to all modes of transport?  
Response from the delegation of Malaysia  
 
Air Transport Services  
 
 Under the ASEAN -Korea FTA, Malaysia offered air transport services which were not included 
under GATS, as follows:  
 
i. Selling and marketing of air transport services;  
ii. Computer reservation system services; and  
iii. Aircraft repair and main tenance services.  
 WT/REG287/2  
 
- 4 - 
 
  Services Auxiliary To All Modes Of Transport  
 
 Under the ASEAN -Korea FTA, Malaysia offers maritime freight forwarding services which 
were not included under GATS.  
 
1.9.  Table 3.7 : In terms of services commitments, what specific improvements d id 
Myanmar make (compared to its GATS commitments) in maritime transport services?  
Response from the delegation of Myanmar  
 
 Myanmar has improved Maritime Cargo Handling Services, Maritime Storage and 
Warehousing Services and International Freight Transpor t (Excluding cabotage) in the 
ASEAN -Korea Agreement on the Comprehensive Economic Partnership.  
 
1.10.   What are the specific new commitments Myanmar took in air transport services 
and services auxiliary to all modes of transport?  
Response from the delegation of M yanmar  
 
 Myanmar took the following specific new commitments in the ASEAN -Korea Agreement on 
the Com prehensive Economic Partnership:  
 
 1. Aircraft Repair and Maintenance Services.  
 2. Selling and Marketing of Air Transport Services.  
 3. Completed Reservation System Services.  
 
1.11.   What are the specific GATS -minus commitments that Myanmar took in internal 
waterways transport and road transport services?  
Response from the delegation of Myanmar  
 
 Myanmar has not  taken any specific commitments on Internal W aterways Transport and 
Road Transport Services in the ASEAN -Korea Agreement on the Comprehensive Economic 
Partnership.  
 
1.12.   Table 3.9 : In terms of services commitments, what specific improvements did 
Singapore make (compared to its GATS commitments) in maritim e transport services?  
Response from the delegation of Singapore  
 
 Singapore has committed international maritime transport services for passengers 
(excluding cabotage  transport) and Maritime Auxiliary Services: Classification societies, except for 
statutory services for Singapore flag ships,  in the ASEAN -Korea FTA.  
 
1.13.   Table 3.10 : In terms of services commitments, what specific improvements did 
Thailand make (compared to its GATS commitments) in maritime transport services, air 
transport services, rail transport services, road transport services and services auxiliary 
to all modes of transport?  
Response from the delegation of Thailand  
 
 For maritime transport serv ices, Tha iland commits more sub sectors such as Maritime cargo 
handling services and Maritime agency services and Freight transportation has been improved.  
 
 For air transport services, Tha iland commits an additional sub sector; namely Computer 
reservation syste m ser vices and the existing sub sectors have been improved toward more liberal.  
 WT/REG287/2  
 
- 5 - 
 
   For subsectors committed un der rail transport services in m ode 11, Thailand has committed 
"Unbound" under GATS whereas under AKFTA, Thailand has committed "None" which means that 
mode 1 has been improved.  
 
 For road transport services and services auxiliary to all modes of transport, they are similar 
to commitments under the GATS.  
 
1.14.   Table 3.11 : In terms of services commitments, what are the specific GATS -minus 
commitments that Viet  Nam took for services auxiliary to all modes of transport?  
Response from the delegation of Viet Nam  
 
 Regarding the services auxiliary to all modes of transport, there is an absence of coverage of 
two services sub sectors in the Specific Schedule of Commitments of Viet Nam in AKTIS 
Agreement, which are storage and warehouse services (CPC 742) and freight transport agency 
services (CPC 748). However, as of now, all ASEAN Member states and Korea are members of 
WTO and  can make use of these two commitments under GATS.  
 
Questions from the delegation of Chile  
Trade Environment  
1.15.   Paragraph 1.9: "The Korean authorities provided information regarding the 
movement of natural persons to and from ASEAN countries in the period  2006-2008. 
While more than 2.4  million Koreans moved to ASEAN countries in 2008, less than 
17,000  people moved from the ASEAN region to Korea. Most of the people moving to 
Korea were service sellers or persons responsible for setting up commercial presence."  
 As regards the movement of natural persons mentioned in the above paragraph, 
Chile would like to know whether the Agreement provides for any type of measure to 
balance migratory flows between the countries, or whether it stipulates the free 
movement of pe rsons with no further restrictions.  
 
Response from the delegation of the Republic of Korea  
 
 There are no mechanisms specifically aimed to balance migratory flows between the 
countries . However, as a principle, the "Scope " Article of the agreement stipulat es that Parties are 
not prevented from applying measures to regulate the entry of natural persons or their temporary 
stay, including those measures necessary to protect the integrity of, and to ensure an orderly 
movement of natural persons across the borde rs, provided that those measures do not nullify or 
impair the benefits accruing under the agreement. Also, the natural persons moving across the 
borders would be subject to the conditions and restrictions that each Party has inscribed in the 
schedule of sp ecific commitments.  
 
1.16.   Paragraph 3.28: "The commitments in business and financial services under 
the Agreement are the same as under the GATS. The coverage of communication 
services has been improved with the addition of telex, telegraphic and voicemail 
services for which modes 1 and 2 tend to remain unbound and mode 3 is subject to 
licensing by the appropriate regulatory authority.14 The Agreement also covers 
construction and related engineering services, some hotel services and maritime 
transport services,  for which Brunei has no GATS commitments.15 The coverage in these 
sectors is limited to a few specific services and limitations include, among others, a 
threshold of 50 % for foreign equity participation and foreign nationals and registration 
obligations ( construction services), joint -ventures with a minimum of 30 % of local 
equity (budget and resort hotels) or no commitments (in mode 1 for construction and 
mode  3 for maritime transport services). International passenger and freight maritime 
transport servic es are covered with no limitations to market access and national 
treatment for modes 1 and 2 while mode 3 remains unbound. Renting of aircraft with 
                                                
1 Maintenance and repair of rail transport equipment and (2) Supporting Services for rail 
transport services: Passenger and freight car cleaning services / Security services at railway 
station.  WT/REG287/2  
 
- 6 - 
 
  crew is also covered under the Agreement with the same limitations as in the GATS. 
Aircraft repair and maint enance services are included in the Agreement with no 
limitations in modes 1 and 2 while mode  3 remains unbound."  
 Footnote 14: For voicemail services, there are no limitations to market access 
through mode  1 except that service providers must use the public telecom network 
under the control of the Government National Telecom Authority.  
 The above paragraph states that there have been no new developments in this 
agreement on Brunei's side with respect to communication services. Would Brunei 
please indic ate whether it envisages undertaking greater commitments regarding 
communication services in the future.  
 
Response from the delegation of Brunei Darussalam  
 
 In terms of telecommunications, the Ministry of Communications of Brunei Darussalam 
together with the Authority for Info -communications Technology Industry (AITI), has made much 
progress in opening up the country Telecommunications services sectors in international trade 
agreements. Depending on the progress made in the country and further consultation  on the 
matter, Brunei Darussalam will transpire to offer better services than what is currently given 
to WTO.  
 
1.17.   Paragraph 3.28, footnote 14, states that all voicemail service providers in Brunei 
must use the public telecom network. Would Brunei please indi cate whether there are 
special requirements or whether any type of evaluation is carried out by the 
Government  National Telecom Authority in respect of use of the public telecom network.  
Response from the delegation of Brunei Darussalam  
 
 A Service Provide r for the Telecommunication Industry (SeTi) license with the license 
category of "Value -Added Servic es" must be obtained by any voicemail service providers in Brunei. 
This is standard requirement for those service providers providing any "Value -Added Servi ces". 
 
ASEAN member states  
Cambodia  
Sector -specific commitments  
1.18.   Paragraph 3.30: "Cambodia's schedule under the Agreement reproduces its 
GATS  schedule in its entirety for each sector and subsector for which Cambodia has 
partial commitment in the GATS, as su mmarized in Table 3.316, which should also be 
read in conjunction with its Schedule of specific commitments. Cambodia's commitments 
under the Agreement apply to Korea as well as to other ASEAN member states."  
 Footnote 16: Note that Cambodia does not take any commitment in market access 
and national treatment for international maritime transport services (both freight and 
passenger) excluding cabotage. However, the sectors are partially covered 
since  additional commitments state that no measures shall be ap plied which deny 
reasonable and non -discriminatory access to auxiliary services such as towing, 
emergency repair, etc.  
 The above footnote refers to the notion of cabotage for Cambodia. Would 
Cambodia please specify what this definition covers, whether it is a definition common 
to all countries encompassed in the agreement, or whether each country has its own 
definition of cabotage.  
 No response provided by Cambodia.  
 
1.19.   Footnote 16 states that no commitment is taken in market access and national 
treatment for international maritime transport services. Would Cambodia please specify 
how it reconciles the fact of taking no commitments in market access and national 
treatment for international maritime transport services with the commitment not to WT/REG287/2  
 
- 7 - 
 
  apply measures which deny reasonable and non -discriminatory access to auxiliary 
services such as towing, emergency repair, etc.  
 No response provided by Cambodia.  
 
Lao PDR  
Sector -specific commitments  
1.20.   Paragraph 3.36: "The coverage of business services in the RTA is lower than in 
the GATS since the Agreement does not cover legal, accounting, auditing, taxation 
consulting and integrated engineering services, computer and related services,  research 
and development, and some other business services. The commitments for construction 
services under the Agreement are different from the GATS: limitations in mode  1 are 
unbound in the GATS whereas there are no limitations under the Agreement; limi tations 
to market access in mode 3 require a joint venture (instead of a foreign equity limit 
of 70% under the GATS) and national treatment is unbound while there are no 
limitations under the GATS. Fewer secondary education services are covered but the 
limitations are less restrictive. The coverage of environmental services is lower under 
the Agreement and limitations are added in mode 3. Also the coverage of the banking 
sector is lower and there are differences in terms of limitations. There is a wider 
coverage of hotels and restaurants but limitations on national treatment in mode  3 are 
unbound under the Agreement while there are none under the GATS."  
 It may be inferred from the above paragraph that, as concerns the Lao PDR, this 
agreement covers fewer disciplines than those undertaken by the country under 
the GATS. Would the LAO PDR please provide further details regarding the objectives 
that it seeks to achieve by reducing services coverage in this agreement.  
Response from the Lao People's Democratic R epublic  
 
 There is no intention of reducing level of commitments since the commitments of Lao PDR 
under AKTIS were made many years prior to when Lao PDR became a member of the WTO in 
2013, so they are lower than the commitments under the WTO.  
 
Philippines  
Horizontal commitments  
1.21.   Paragraph 3.43: "Under the GATS, horizontal limitations for mode 3 relate to 
activities expressly reserved by law to citizens of the Philippines, acquisition of land, 
and access to domestic credit. Under mode 4, entry requires a dete rmination of the 
non-availability of a person in the Philippines. Under the Agreement, the Philippines' 
horizontal commitments are similar as under the GATS, with the specification that all 
measures taken by local government units and all measures governin g permanent 
residents are unbound."  
 The above paragraph mentions that the Philippines opens up only mode  4, with the 
requirement of a determination of non -availability of a person in the Philippines. Would 
the Philippines please explain what will be the procedure for determining 
non-availability of a suitable professional in the country.  
Response from the delegation of the Philippines  
 
 The Philippine Government, through the Department of Labor and Employment (DOLE), 
performs the Philippine Labor Market T est (LMT) as a requirement in relation to a foreign service 
supplier 's application for a permit to work. The LMT is being done through a publication in the 
newspaper of general circulation to prove that no Filipino citizen is competent, able, and willing t o 
provide the services being offered by the foreign service supplier . A 30 -day public notice for 
no-objection completes the publication process. If the Department receives no objection over the 
prescribed period, the foreign service supplier can start prov iding services to the Philippines.  
 WT/REG287/2  
 
- 8 - 
 
  Questions from the delegation of China  
 
1.22.   Paragraph 3.19: The Parties may negotiate additional commitments with respect 
to trade in services, such as regarding qualifications, standards or licensing matters, 
currently not subject to scheduling under the Agreement (Article 21). Also, they shall 
enter into successive rounds of negotiations to negotiate further packages of specific 
commitments to progressively liberalize trade in services between them (Article 24).  
 China woul d be interested to know whether the successive rounds of negotiations 
already took place, and whether the parties have made further specific commitments to 
liberalize trade in services between them.  
 
Response from the ASEAN Members and the Republic of Kore a 
 
 The Services Working Group under the Implementing Committee met thrice to discuss 
progressive liberalization as stipulated in Article 24 of the services agreement, and the last 
meeting took place in 2013. The Working Group conducted a joint impact stud y on further 
liberalization, which was completed in September 2013. The Parties discussed and noted the 
outcome of this study, however subsequent rounds for services liberalization has not begun, for 
services liberalization between ASEAN member states and Korea is currently being discussed 
through other channels including RCEP (Regional Compr ehensive Economic Partnership).  
1.23.   Paragraph 3.24: Commitments on insurance and banking services are similar to 
those in the GATS but with the additional limitation on residence in Korea for top 
executive personnel (for mode 3).  
Could Korea clarify whether it means the level of services commitments under the 
Korea -ASEAN FTA is lower than its commitments under GATS?  
 
Response from the delegation of the Republic of Korea  
 
The level of commitment is the same. In GATS, Korea has inscribed the residency 
requirement for top personnel in the mode 4 NT column for each financial services sector, whereas 
Korea has moved the location of such requirement to mode 3 in the Korea -ASEAN FTA. 
 
1.24.   Paragraph 3.57: Article 15 allows a Party to request consultations if such 
subsidies or grants significantly affect trade in services in which commitments were 
taken under the Agreement. To reach an amicable resolution of the matter, the 
requested Pa rties shall provide information on subsidies related to trade in services in 
which commitments were made to any requesting Party; and review the subsidies when 
relevant disciplines are developed by the WTO.  
 Considering that there are no rules on service s ubsidies yet, could the Parties 
elaborate the implementation of Article 15?  
 
Response from the ASEAN Members and the Republic of Korea  
 
 So far, there has been no request on the basis of Article 15 for a consultation on services 
subsidies.  
 
Section 3.4 "li beralization commitments " 
 
1.25.   The section indicates liberalization commitments in the ASEAN -Korea FTA.  
 Could the Parties kindly provide examples of liberalization commitments which 
have significantly promoted trade i n services in any sector or sub sector? If any, please 
give detailed data.  
 WT/REG287/2  
 
- 9 - 
 
  Response from the ASEAN Members and the Republic of Korea  
 
 Regarding Brunei Darussalam 's SOC, Brunei Darussalam has made a number of additional 
commitments compared to those in the GATS in Maritime Transport services, Air Transport 
Services, Telecommunication services, construction services and tourism.  
 
 For Lao PDR, e xamples of subsectors that have higher level of liberalization under AKTIS 
than under the WTO where mode 1 has committed as "None" and under the WTO mode 1 as 
"Unbound ": 
 
 Pre-erection work at construction site (CPC 511) ; 
 Construction work for civil engineering (CPC 513) ; 
 Assembly and erection of prefabricated constructions (CPC 514) ; 
 Installation and assembly work (CPC 516) . 
 Malaysi a believes with the additional commitments in various sectors made in the 
ASEAN -Korea FTA as compared to GATS, this significantly promotes trade in services between 
Malaysia and Korea.  
 
 Regarding Myanmar 's SOC, Myanmar has m ade a number of sectors and sub sectors under 
its commitments in ASEAN -Korea Trade in Services compared to those in the GATS.  
 
 Singapore has undertaken new commitments in sectors such as Franchising Services, 
Maritime Transport Services, Rental/Leasing Services without Operators and Who lesale Trade 
Services in the ASEAN -Korea FTA, compared to our GATS commitments.  
 
 Regarding Thailand 's SOC, Thailand has improved its commitments in a number of sectors, 
compared to those in the GATS such as business services, construction and related engi neering 
services, educational services, environmental services, and etc.  
 
 Due to the limited amount of numerical data and statistics regarding services trade between 
ASEAN and Korea on sector -by-sector or country -by-country basis, it is difficult to show if the 
improvements in the liberalization specifically contributed to the increase of services trade in 
certain sector or sectors. However, as shown in the first section of the report, Korea 's trade in 
commercial services with ASEAN countries is showing a continued increase since the entry into 
force of the Agreement in 2009, and this could be  an indirect evidence of the impacts of the 
Korea -ASEAN services agreement on the services trade between the Parties.  
 
Section 4.5 "Institutional Framework " 
 
1.26.   The section states the establishment of the Implementing Committee.  
 Could the Parties kindly provide more specific information on the abovementioned 
Implementing Committee, including its achievements and future objectives?  
 
Response from the ASEAN Members and  the Republic of Korea  
 
 The Services Working Group under the Implementing Committee met thrice to discuss 
progressive liberalization as stipulated in Article 24 of the services agreement, and the last 
meeting took place in 2013. The Working Group conducte d a joint impact study on further 
liberalization, which was completed in September 2013. The Parties discussed and noted the 
outcome of this study, however subsequent rounds for services liberalization has not begun, for 
services liberalization between ASE AN member states and Korea is currently being discussed 
through other channels including RCEP (Regional Comprehensive Economic Partnership).  
 
1.27.   Paragraph 4.29: The 9th round of consultations was held in 2012 and it established 
the Working Group on Services under the Implementing Committee with the objectives 
of reviewing the implementation of the services agreement and considering further 
measures to liberalize trade in services.  WT/REG287/2  
 
- 10 - 
 
  Could the Parties give more detailed information on the abovementioned Working  
Group, including its efforts in further expansion of liberalization of trade in services?  
 
Response from the ASEAN Members and the Republic of Korea  
 
 The Services Working Group under the Implementing Committee met thrice to discuss 
progressive liberaliza tion as stipulated in Article 24 of the services agreement, and the last 
meeting took place in 2013. The Working Group conducted a joint impact study on further 
liberalization, which was completed in September 2013. The Parties discussed and noted the 
outcome of this study, however subsequent rounds for services liberalization has not begun, for 
services liberalization between ASEAN member states and Korea is currently being discussed 
through other channels including RCEP (Regional Comprehensive Economic Pa rtnership).  
 
Questions from the delegation of the European Union  
 
Provisions on trade in services  
Horizontal commitments  
 
The EU notes that the category of contractual services suppliers has been added to 
Korea 's commitments compared to GATS.   
 
1.28.   Paragraph 3.22: Will Korea aim at further expanding the sectoral coverage of 
these commitments in succeeding round of talks with ASEAN partners?  
1.29.   Will Korea aim at further expanding the mode 4 categories to also include 
Independent Professionals (individual s who win services contracts abroad and who are 
not employed b y a services provider at home)?  
Response from the delegation of the Republic of Korea  
 
 It is difficult to say at this point whether Korea will expand the sectoral coverage of CSS or 
include a n ew category such as IP. Currently, there is no ongoing discussion for further 
liberalization of services in AKFTA, as services liberalization is currently being discussed in the 
context of RCEP between Korea and ASEAN member countries.  
 
Sector -specific co mmitments and Section 4.8 Other  
 
1.30.   Paragraph 3.24, and Paragraph 4.29: For future rounds of negotiations to improve 
the commitments what possibilities does Korea consider the most important to explore: 
improvement of the sector -specific commitments; or a further deepening of the 
regulatory section s, relating to sectors such as m ode 4, telecom, financial services and 
maritime transport?  
 It is difficult to say at this point for this question as well. Whether to focus on improving 
sectoral commitments or inc luding more principles would be subject to the balance of interest 
between ASEAN member countries and Korea, and the balance between other FTAs including 
RCEP. As a general comment, Korea is both interested in improving market access for specific 
sectors a nd deepening the principles for regulatory sections. Among the regulatory sectors, 
Korea 's interest is rather focused on telecommunications and financial services than the other two.  
 
Questions from the delegation of the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu2 
 
Provisions on trade in services  
Liberalization commitments  
 
1.31.   Paragraph 3.19: The Parties may negotiate additional commitments with respect 
to trade in services, such as regarding qualifications, standards or licensing matt ers, 
currently not subject to scheduling under the Agreement (Article 21). Also, they shall 
                                                
2 Questions were submitted to the Parties on 23 March 201 8 (two  weeks, three  days before 
the meeting).  WT/REG287/2  
 
- 11 - 
 
  enter into successive rounds of negotiations to negotiate further packages of specific 
commitments to progressively liberalize trade in services between them (Artic le 24).  
Has a date been decided for launching these negotiations mentioned in 
Paragraphs  3.19.?  
 
 The Services Working Group under the Implementing Committee met thrice to discuss 
progressive liberalization as stipulated in Article 24 of the services agreement, and the last 
meeting took place in 2013. The Working Group conducted a joint impact study on  further 
liberalization, which was completed in September 2013. The Parties discussed and noted the 
outcome of this study, however subsequent rounds for services liberalization has not begun, for 
services liberalization between ASEAN member states and Kore a is currently being discussed 
through other channels including RCEP (Regional Comprehensive Economic Partnership).  
 
General provisions of the agreement  
Other  
 
1.32.   Paragraph 4.28: The Parties shall strengthen cooperation in services sectors 
including those whi ch are not covered by existing cooperation arrangements 
(Article  17). The Economic Ministers of the ASEAN Member Countries and the Minister 
for Trade of Korea shall meet within a year of the date of entry into force of the 
Agreement and then biennially or otherwise as appropriate to review the Agreement for 
the purpose of consideri ng further measures to liberaliz e trade in services as well as 
develop disciplines and negotiate agreements on matters referred to in Article 16 or any 
other relevant matters as m ay be agreed (Article 26).  
 Since the Agreement has been in force for more than a year, can the Parties inform 
us whether such a review has taken place? If so, what were the results? If not, why not?  
 
 Please refer to the answer to question 1.31.  
 
Questio ns from the delegation of the United States  
 
1.33.   No MFN obligation for services : The agreem ent on services contains no 
MFN obligation, whereas the agreement on investment does contain an MFN obligation.  
a. Why did the parties decide not to include MFN for services, when they 
apparently felt it was appropriate for investment?  What makes services 
different?  
Response from the ASEAN Members and the Republic of Korea  
 
 In the ASEAN -Korea FTA, services are liberalized in positive -list approach, and Korea 's past 
FTAs with positive -list services agreement do not usually include MFN. In contrast, investment is 
taking the negative -list approach, and includes MFN.  
 
 However, please note that the MFN Article in the investment agreement of AKFTA is only a 
conceptual one , in the sense that it is frozen until the Parties negotiate and agree on Schedules of 
Reservations and those Schedules enter into force according to Article 27 (Work Programme). 
Also, there is possibility that MFN can be introduced in the services agreeme nt in the course of 
review mechanism as stipulated in Article 26 of the services agreement. Therefore, the actual level 
of liberalization is similar for services and non -services, for there is no applicable MFN Article for 
both Services and Investment in t he current stage, and there is possibility of MFN application in 
the future.  
 
b. Because the investment agreement excludes services only to the extent 
services are covered by the services agreement, and since there is no MFN 
obligation for services, does thi s mean that the investment MFN obligation 
applies to services supplied through a commercial presence (m ode 3)?  WT/REG287/2  
 
- 12 - 
 
  Response from the ASEAN Members and the Republic of Korea  
 
 No, MFN obligation does not apply to services mode 3. It is clear that mode 3 is cove red by 
the Services Agreement if you read together the definition of trade in services under Article 1 
(Definitions) and Article 2 (Scope) of Services Agreement and Article 2 (Scope and Coverage) of 
Investment Agreement, which stipulates that the Agreement  does not apply to measures adopted 
or maintained by a Party to the extent that they are covered by the Agreement on Trade in 
Services under the Framework Agreement.  
 
 The exhaustive exception to the services carve -out in the investment agreement is 
stipulated in paragraph 3 of Article 2 (Scope and Coverage) of Investment Agreement. That is, 
only the Articles 5 (General Treatment of Investment), 10 (Transfer), 12 (Expropriation and 
Compensation), 13  (Compensation for Losses), 14 (Subrogation), and 18 (Inve stment Dispute 
Settlement between a Party and an Investor of any other Party ) of Investment Agreement 
cross-apply to services mode  3. 
 
c. If so, why would services supplied through mode 3 be more suitable to the 
MFN obligation than services supplied through mode 1?  
 Please refer to the answer to question 1.33.b. 
 
1.34.   Disparity in NT coverage for investments between services and non -services : The 
national treatment obligation for investment is subject to a negative -list and ratchet 
mechanism.  However, the investmen t obligations exclude services to the extent they are 
covered by the services provisions.  Since both the services and investment agreements 
include a national treatment obligation, we interpret this to mean that the negative -list 
approach for national trea tment applies only to investments in production activities.   
 If this interpretation is correct, why did the parties feel that a negative -list 
approach is suitable for production activities but not for services activities, particularly 
when direct investme nt in services supports infrastructure development and provides 
considerable employment?  
 
Response from the ASEAN Members and the Republic of Korea  
 
 It is true that ratchet mechanism and negative -list approach only apply to the non -services 
sector investment. However, please note that as mentioned in the answer to the question 1. 33.a., 
the principles in the investment agreement are frozen until the reserva tion schedules come 
into force.  
 
The differences in services liberalization and non -services liberalization come from the 
traditional approaches to those two sectors, namely, GATS -style positive list approach for services 
and NAFTA -style negative list approach for non -services. Also, the differentiated approaches to the 
services and non -services i nvestment are partially due to the fact that there is a different level of 
sensitivity to these two sectors. As you have mentioned, services investment is more closely 
related to the infrastructure and employment as they are supplied by persons, as compare d to 
goods. In that sense, services sector has a larger sensitivity t han manufacturing and other 
non-services sectors, therefore the level of liberalization and the app lied principles are 
accordingly  different.  
Built -in agenda for services : Article 24 (Pro gressive Liberalization) calls for the 
parties to engage in successive rounds of negotiations as part of the review process set 
out in Article 26, whi ch envisions biennial meetings.  
 
 Have any such rounds of negotiations been undertaken?  If so, what have b een 
the results?  
 
Response from the ASEAN Members and the Republic of Korea  
 
 The Services Working Group under the Implementing Committee met thrice to discuss 
progressive liberalization as stipulated in Article 24 of the services agreement, and the last 
meeting took place in 2013. The Working Group conducted a joint impact study on  further WT/REG287/2  
 
- 13 - 
 
  liberalization, which was completed in September 2013. The Parties discussed and noted the 
outcome of this study, however subsequent rounds for services liberalization has not begun, for 
services liberalization between ASEAN member states and Kore a is currently being discussed 
through other channels including RCEP (Regional Comprehensive Economic Partnership).  
 
__________