WT/REG311/2/Add.2
3 December 2014
(14-7097)  Page: 1/2
Committee on Regional Trade Agreements  Original: English
 
FREE TRADE AGREEMENT BETWEEN THE UNITED STATES AND THE REPUBLIC OF KOREA  
(GOODS AND SERVICES) 
QUESTIONS AND REPLIES 
Addendum 
 The following communication, dated 3 December 2014, is being circulated at the request of 
the delegations of the United States and the Republic of Korea. 
 
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 This document reproduces the follow-up ques tion addressed to the Parties following the 
75th Session of the CRTA and responses submitted. 
Question from the delegation of Turkey: 
1.1.  Paragraph 3.27 mentions the exchanges of letters in June 2007 and February 2011, 
the Parties agreed upon vehicle emission  standards and regulations relating to 
self-certification for motor vehicle safety stan dards on originating vehicles imported into 
Korea. 
Basically, the exchange of these letters  set up exemption schedules for US car 
exporters under certain sales thresholds, from the Korean technical regulations 
regarding emissions, fuel economy and vehi cle safety standards, which should have 
been applied for reasons of environment protec tion and/or safety in the absence of the 
FTA. 
For instance until the end of 2015, a US car producer within the limit of sales 
threshold, shall be deemed to comply with the relevant regulations if either the average 
fuel economy or the average CO2 emissions level meets a target level that is 19% more lenient than the relevant target  level provided in the regulation that would otherwise be 
applicable to that producer.  
Similarly, through the June 2007 dated letter, Korea accepts the equivalence of 
US standards regarding motor vehicle safety wi th that of Korea for producers with sales 
below certain limits. 
As for Turkey, we would like to receive Parties' comments regarding the 
compatibility of such arrangements under WTO rules and principles. More specifically, is 
this favorable treatment simply considered as an exception of MFN clause? How is it 
interpreted in WTO law, specially with regard to TBT Agreement as the FTA has 
favorable provisions for the US cars with regard to Korean emission standards and security test.  
With respect to the letter exchanges referenced  by Turkey, we would like to offer some 
clarifications. First, the language Turkey points to regarding average fuel economy and CO2 emissions is not contained in an exchange of letters incorporated into, or modifying, the FTA, but rather in Agreed Minutes that reflect the outcome of discussions, separate from the FTA, aimed at 
resolving a Specific Trade Concern. The treatment of low-volume manufacturers under the relevant 
Korean regulation is not specific to originating goods, but is applied on an MFN basis. Similarly, the WT/REG311/2/Add.2 
 
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  elements of the June 2007 letter dealing with en vironmental regulations, while incorporated into 
the FTA, are also low-volume manufacturer provisions that are applied on an MFN basis. 
The February 2011 letter provisions dealing with acceptance of US Federal Motor Vehicle 
Safety Standards apply to originating goods. While some provisions of the KORUS FTA, notably 
provisions related to good regulatory practices, are applied on a Most-Favored Nation basis, 
KORUS is a bilateral trade agreement. As such, provisions related to trade in goods are generally applied bilaterally and are intended to facilitate and increase trade between the Parties. In this 
regard, the Parties agreed to tie these provisions to originating goods as a result of negotiations. 
We believe that the Agreement is fully consistent with our WTO obligations. 
 
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