WT/REG359/1  
 
 
21 January 2016  
(16-0420)  Page: 1/50  
Committee on Regional Trade Agreements   
 
 
 FACTUAL PRESENTATION 
FREE TRADE AGREEMENT BETWEEN THE RE PUBLIC OF KOREA AND AUSTRALIA  
(GOODS AND SERVICES) 
Report by the Secretariat 
This report, prepared for the consideratio n of the Free Trade Agreement between the 
Republic of Korea and Australia, has been drawn up by the WTO Secretariat on its own 
responsibility and in full consultation with the Parties. The factual presentation reproduces as closely as possible the terminology used in the Agreement and in the comments provided and does not imply offi cial 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 arising from this report may be addressed to Mr. Jean-Daniel 
Rey (tel: +41 22 739 5264). Any statistical questions arising from this report may be 
addressed to Mr. Thakur Parajuli (tel: +41 22 739 5473). 
 
 WT/REG359/1 
 
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  TABLE OF CONTENTS 
 
Page 
1   TRADE ENVIRONMENT ................................................................................................. 4  
1.1   Merchand ise trade ..................................................................................................... 4  
1.2   Trade in servic es and inve stment ................................................................................. 6  
2   CHARACTERISTIC ELEMEN TS OF THE AG REEMENT ...................................................... 9  
2.1   Background  Information ............................................................................................. 9  
3   PROVISIONS ON TRADE IN GOODS ........................................................................... 10  
3.1   Import duties and charges,  and quantitative  restrict ions ................................................ 10 
3.1.1   Genera l provisions ................................................................................................. 10 
3.1.2   Liberalization of  trade and ta riff lines ........................................................................ 11 
3.1.3   Liberali zation schedule............................................................................................ 11 
3.1.3.1   Australia ........................................................................................................... . 11 
3.1.3.2   Korea ............................................................................................................... . 13 
3.1.4   Tariff rate quotas ................................................................................................... 16 
3.2   Rules of origin .......................................................................................................... 16 
3.3   Export duties and charges,  and quantitative  restrictions ................................................. 18 
3.4   Regulatory provisions on trade in goods ....................................................................... 18 
3.4.1   Standards ............................................................................................................. 18 
3.4.1.1   Technical barriers to trade .................................................................................... 18 
3.4.1.2   Sanitary and phytosanitary measures .................................................................... 18 
3.4.2   Safeguard mechanisms ........................................................................................... 18 
3.4.2.1   Global safeguards ............................................................................................... 19 
3.4.2.2   Bilateral safeguards ............................................................................................. 19 
3.4.2.3   Special agricult ural safeguar d measures ................................................................. 19 
3.4.2.4   Other Sa feguard me asures ................................................................................... 20 
3.4.3   Anti-dumping and countervailing measures ............................................................... 20 
3.4.4   Subsidie s and State-aid .......................................................................................... 20 
3.4.5   Customs-re lated procedures .................................................................................... 20 
3.5   Sector-specific provis ions on trad e in goods ................................................................. 21 
3.5.1   Cooperation in agricult ure, fisheries and fore stry ........................................................ 21 
3.5.2   Cooperation in ener gy and minera l resour ces ............................................................. 21 
4   PROVISIONS ON TRADE IN SERVICES AND IN VESTMENT ......................................... 21  
4.1   Scope and definitions ................................................................................................ 21 
4.2   Denial of benefits ..................................................................................................... 22 
4.3   General provisions on trade in services ........................................................................ 22 
4.3.1   Mark et acce ss ....................................................................................................... 22 
4.3.2   National and MFN tr eatment .................................................................................... 22 
4.3.3   Local presence ...................................................................................................... 23 
4.3.4   Performanc e requirements ...................................................................................... 23 WT/REG359/1 
 
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  4.3.5   Senior Managers and Boards of  Direct ors .................................................................. 23 
4.3.6   Movement of  natural persons .................................................................................. 24 
4.4   Liberalization commitments ........................................................................................ 25 
4.4.1   Australia ............................................................................................................... 25 
4.4.1.1   MFN and hori zontal comm itments .......................................................................... 25 
4.4.1.2   Sector sp ecific commitments ................................................................................ 26 
4.4.2   Korea ................................................................................................................... 30 
4.4.2.1   MFN and hori zontal comm itments .......................................................................... 30 
4.4.2.2   Sector sp ecific commitments ................................................................................ 30 
4.5   Regulatory provisions ................................................................................................ 33 
4.5.1   Domestic regulation ............................................................................................... 33 
4.5.2   Recognition ........................................................................................................... 33 
4.5.3   Subsidies .............................................................................................................. 34 
4.5.4   Safeguards ........................................................................................................... 34 
4.5.5   Other ................................................................................................................. .. 34 
4.5.5.1   In vestment ........................................................................................................ 34 
4.5.5.2   Electr onic Commerce ........................................................................................... 34 
4.6   Sector specific provis ions on trade in services ............................................................... 34 
4.6.1   Audiovisua l co-produ ction ....................................................................................... 34 
4.6.2   Financial services ................................................................................................... 35 
4.6.3   Telecommunication Services .................................................................................... 36 
5   GENERAL PROVISIONS  OF THE AGREEMENT ............................................................. 36  
5.1   Tran sparency ........................................................................................................... 36 
5.2   Current payments and capital movements .................................................................... 36 
5.3   Exceptions ............................................................................................................... 37 
5.3.1   Genera l exceptions ................................................................................................ 37 
5.3.2   Security exceptions ................................................................................................ 37 
5.3.3   Ta xation  .............................................................................................................. . 37 
5.4   Accession and Withdrawal .......................................................................................... 37 
5.5   Institutio nal framework ............................................................................................. 38 
5.6   Disput e settlement ................................................................................................... 38 
5.7   Relationship with other agr eements concluded by the Parties .......................................... 40 
5.8   Government  procurement .......................................................................................... 41 
5.9   Intellectual property rights ......................................................................................... 42 
5.10   Other .................................................................................................................. .. 42 
5.10.1   Electronic commerce ............................................................................................ 42 
5.10.2   Competition ........................................................................................................ 43 
5.10.3   Labour ...............................................................................................................  43 
5.10.4   En vironm ent ....................................................................................................... 43 
ANNEX 1 ....................................................................................................................... . 44 WT/REG359/1 
 
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Key Facts 
 
Parties to the Agreement:  Republic of Korea and Australia 
 
Date of Signature:   8 April 2014 
 
Date of Entry into Force: 12 December 2014 
 
Date of Notification:  22 December 2014 
 
Full implementation :  1 January 2033 
 
 
1  TRADE ENVIRONMENT 
1.1.  The Free Trade Agreement betwee n Australia and the Republic of Korea1, (hereinafter 
referred to as "the Agreement") is Australia's 10th free trade agreement and Korea's 13th free trade 
agreement.  
1.2.  In 2013, with a population of 23 million, Australia's GDP was estimated at US$1,561 billion, 
while that of Korea, with a population of 50 million, was US$1,305 billio n. Averaged over the 
period 2011-2013, the Parties' trade (goods and services) to GDP ratio was 42.3 for Australia and 
103.2 for Korea. 
1.1  Merchandise trade2 
1.3.  In 2013 Australia's merchandise exports amounted to US$252 billion (1.34% of global 
exports) and imports amounted to US$242 billion (1.28% of global imports). In the same year 
Korea's merchandise exports amounted to US$560 (2.79% of global exports) and imports US$516 billion (2.73% of global imports). Australia was the world's 15
th largest exporter and 17th largest 
importer of merchandise, while Korea was the 5th largest exporter and 6th largest importer. The 
structure of the Parties' merchandise exports an d imports are very different, with Australia 
exporting mainly fuels and mining products (representing 64% of its total exports) while mainly importing manufactures (70.5% of its total imports). Korea's exports are largely manufactures 
(representing 85.9% of its total exports) and imports are mainly manufactured and fuels and 
mining products (respectively 51% and 42.2% of its total imports).  
1.4.  Developments in global and intra-Party trad e are presented in Chart 1.1 (A and B) over the 
period 2000-2014 for Australia and 2000-2013 in the case of Korea. Australia's trade surplus with 
Korea has been consistent over the period, with a peak in 2010. At the global level, Australia experienced a trade deficit until 2008 since when it has registered a trade surplus. In the case of 
Korea's global trade, Chart 1.1A shows a trade su rplus for most of the period, with a momentary 
setback for both exports and imports in 2008.  
1.5.  Based on 2013 trade data
3, Korea was Australia's 7th largest source of imports4 and 
3rd largest destination for exports5, while Australia was Korea's 7th largest source of imports6 and 
14th largest export destination.7 
                                               
1 In this report we will refer to Korea. 
2 Source for this section, unless otherwise indicated: WTO Trade Profiles, June 2015. 
3 Source: UNSD Comtrade database. The national stat istics of the Parties may slightly differ from the, 
also official, sources systematically used in  the preparation of factual presentations. 
4 In 2013, the five top sources of imports for Australia were: China (19.3%); the EU(28) (17.5%); the 
US (10.2%); Japan (7.7%); and Singapore (5.2%). Source: UNSD, Comtrade database. 
5 In 2013, the five top destinations for Australia's exports were: China (34.6%); Japan (12.4%); Korea 
(7%); the EU(28) (4.4%); and India (3.4%). Source: UNSD, Comtrade database.   
6 In 2013, the five top sources of imports for Korea were: China (16.1%); Japan (11.6%); the EU(28) 
(10.8%); the US (8.1%); and Saudi Arabia (7 .3%). Source: UNSD, Comtrade database.   
7 In 2013, the five top destinations for Korea's exports were: China (26.1%); the US (11.1%); the 
EU(28) (7.7%); Japan (6.2%); and Hong Kong, China (5%). Source: UNSD, Comtrade database.   WT/REG359/1 
 
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  Chart 1.1 Korea and Australia: Bilateral and global merchandise trade, 2002-20148 
01020304050607080
0100200300400500600700800
2000 2002 2004 2006 2008 2010 2012 2014B. Australia 2000-2014
(US$ billions)
Imports from Rep. of Korea (Right Axis)
Export to Rep. of Korea (Right Axis)
Total Imports
Total Exports
01020304050607080
0100200300400500600700800
2000 2002 2004 2006 2008 2010 2012A. Korea 2000-2013 
(US$ billions)
Imports from Australia (Right Axis)
Export to Australia (Right Axis)
Total Imports
Total Exports
 
Source: UNSD Comtrade database. 
 
1.6.  The commodity structure of trade between Australia and Korea, and between each Party and 
the world, during the period 2011-2013, is shown in  Chart 1.2, on the basis of Harmonized System 
(HS) Sections. Mineral products (29.9%), vehicles (27.9%), and machinery (25.5%) together 
accounted for 83.3% of Australia's imports from Korea, while these three sectors were also Australia's top three global imports (representing respectively 17.5%, 13.6% and 24.7% of 
Australia's global imports). These three categories of products corresponded respectively to 
Korea's 3
rd, 2nd, and 1st largest global exports (corresponding together to 63.8% of Korea's global 
exports).  
1.7.  Mineral products represented more than two thirds of Korea's imports from Australia 
(77.4%). Minerals also represents Australia's top gl obal export (57.9% of Australia's export to the 
world), and Korea's main global import (representing 18.5% of Korea's imports from the world).  
                                               
8 In the case of Korea, the data is only available until 2013. WT/REG359/1 
 
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  Chart 1.2 Korea and Australia: product co mposition of merchandise trade, annual 
average (2011-2013) 
77644324Korea imports from Australia (%)
38
231084332227Korea's Global Imports (%)
58
6555532226Australia's Global Exports (%)
30
28255435Australia's imports from Korea (%)
25
18
149544333327Australia's Global Imports (%)
33
2110977734Korea's Global Exports (%)Total: US$ 23 billion Total: US$ 520 billion
Total: US$ 239 billionTotal: US$ 554 billionTotal:  US$ 259 billion
Total: US$ 9 billion
 
Source: UNSD Comtrade database. 
 
1.2  Trade in services and investment 
1.8.  In 2013, Australia's shares of total comme rcial services exports and imports were 1.12% and 
1.42% respectively, while Korea's share was 2.41%  of world exports and 2.42% of world imports 
of services. With total commercial services expo rts of US$52 billion, and imports of US$62 billion, 
Australia was the world's 14th largest exporter and 12th largest importer of commercial services. 
Korea was both the 8th largest exporter (US$112 billion) and importer (US$106 billion). 
1.9.  Charts 1.3 and 1.4 below show global trade in commercial services for Australia and Korea 
(based on the period 2005-2013).9 For both Parties, the available sets of data show an overall 
deficit in trade in commercial services with the world, with a surplus for Korea (based on BMP5) in 2012-2013. In the case of Australia, Travel, transport and other business services represent the 
three mainly traded services, in terms of both expo rts and imports. While this is also the case for 
Korea, exports of construction services also repres ent an important proportion of its overall global 
exports. Chart 1.3 shows Australia's bilateral trade in services with Korea during 2011-13. 
Australia's major imports include transport and trav el services while exports are mainly classified 
under travel services. During the three year pe riod before entry into force of the Agreement 
Australia ran a stable surplus in its services trade with Korea.  
                                               
9 While Australian data (for 2011-2013) are based on  BMP6, statistics for other years and on Korea's 
trade are extracted from the WTO database and are based on BMP5. WT/REG359/1 
 
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  Chart 1.3 Australia: Global trade in commercial services, 2005-2013 and Korea 2011-13 
01020304050607080
2005 2007 2009 2011 2013A. Australia imports from world
2005-2013
(US$ Billion)
Personal,  cultural, and recreational  services Other business services
Telecommunications,  computer,  and information  services Charges for the use of intellectual  property n.i.e.
Financial services Insurance  and pension services
Construction  services Travel services
Transport  services Maintenance  and repair services n.i.e.
Manufacturing  services on physical inputs owned by others0102030405060
2005 2007 2009 2011 2013B. Australia exports to world
2005-2013
(US$ Billion)
0100200300400500600700
2011 2012 2013C. Australia import from Korea 
2011-2013
(US$ Million)
05001,0001,5002,000
2011 2012 2013D. Australia Export to Korea
2011-2013
(US$ Million)
 
Note: 
No imports from world on manufacturing services on  physical inputs owned by others (2006-2013) and 
construction (2005-2013). No imports from Korea on Construction services and Manufacturing services on physical inputs owned by 
others (2011-2013); Maintenance & repair services n.i. e. (2011, 2012); Insurance & pension services (2012, 
2013); and Financial services (2011). No Exports to Korea on Construction services and Manufac turing services on physical  inputs owned by others 
(2011-2013); Maintenance & repair services n.i.e. (2012); and Insurance & pension services (2012, 2013) 
Source: WTO Statistics database (2005-2010), Australian authorities (2011-2013) based on BMP6. WT/REG359/1 
 
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  Chart 1.4 Korea: Trade in commercial services with world, 2005-2013 
0.020.040.060.080.0100.0120.0
2005 2007 2009 2011 2013A. Korea imports from world
2005-2013
(US$ Billion)
Transportation  services Travel
Communications  services Construction
Insurance  services Financial services
Computer  and information  services Royalties and license fees
Other business services Personal,  cultural and recreational  services0.020.040.060.080.0100.0120.0
2005 2007 2009 2011 2013B. Korea exports to world
2005-2013
(US$ Billion)
 
Note:  
Data for 2012 and 2013 is the WTO's estimate. 
Source: WTO Statistics database (2005-2013) based on BMP5.  
1.10.  Charts 1.5 and 1.6 below depict each Party's foreign direct investment stocks and flows with 
the world which have grown steadily during the period 2001-2013. Australia was a net recipient of 
FDI for the period considered as was Korea until  2006 when it became a net investor. Complete 
data on bilateral FDI are not available. 
Chart 1.5 Australia: FDI stock and flow  with Australia and world, 2001-2013 
0100200300400500600700
2001 2003 2005 2007 2009 2011 2013Australia FDI stock with world
2001-2013
(US$ Billion) 
Outward Inward
-40-20020406080
2001 2003 2005 2007 2009 2011 2013Australia FDI flow with world
2001-2013
(US$ Billion) 
Outward Inward
 
Source: UNCTAD; World Invest Report 2014 and Australian Authorities (2001-2013). 
 WT/REG359/1 
 
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  Chart 1.6 Korea: FDI stock and flow  with Australia and world, 2001-2013  
050100150200250
2001 2003 2005 2007 2009 2011 2013Korea FDI stock with world
2001-2013
(US$ Billion) 
Outward Inward
05101520253035
2001 2003 2005 2007 2009 2011 2013Korea FDI flow with world
2001-2013
(US$ Billion) 
Outward Inward
 
Source: UNCTAD, World Invest Report 2014 and Korean Authorities. 
2  CHARACTERISTIC ELEMENTS OF THE AGREEMENT 
2.1  Background Information 
2.1.  The Agreement was signed on 8 April 2014 and notified on 22 December 2014 under 
Article XXIV:7(a) of GATT 1994 and Article V:7(a) of GATS (see document WT/REG359/N/1 - 
S/C/N/786). The text of the Agreement, together wi th its annexes, is available on the Parties' 
official websites: 
Australia : http://www.dfat.gov.au/fta/kafta/  
 
Korea :  http://www.fta.go.kr/main/situation/kfta/lov3/au/2  
 
2.2.  The Agreement is composed of 23 Chapters. Box 2.1 below summarizes the structure of the Agreement. A number of Annexes, including the Part ies' tariff elimination schedules and the lists of 
reservations on cross-border supply of servic es and establishment (non-conforming measures) 
a l s o  f o r m  p a r t  o f  t h e  A g r e e m e n t .  S i d e  l e t t e r s  o n  s p e c i f i c  i s s u e s  c o m p l e m e n t  t h e  t e x t  o f  t h e  Agreement. The Agreement includes an audiovisual co-production agreement.  WT/REG359/1 
 
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  Box 2.1 Structure of the Agreement 
Titles, Chapters 
(including 
Annexes) and 
Protocols Title/description 
Preamble  
Chapter 1 Initial provisions and definition 
Chapter 2 Trade in goods 
Chapter 3 Rules of origin and origin procedures 
Chapter 4 Customs administra tion and trade facilitation 
Chapter 5 Technical barriers to trade and sani tary and Phytosanitary measures 
Chapter 6 Trade remedies 
Chapter 7 Cross-border trade in services 
Chapter 8 Financial services 
Chapter 9 Telecommunications 
Chapter 10 Movement of natural persons 
Chapter 11 Investment 
Chapter 12 Governme nt procurement 
Chapter 13 Intellectual property rights 
Chapter 14 Competition policy 
Chapter 15 Electronic commerce 
Chapter 16 Cooperation 
Chapter 17 Labour 
Chapter 18 Environment 
Chapter 19 Transparency 
Chapter 20 Dispute resolution 
Chapter 21 Institutional provisions 
Chapter 22 General provisions and exceptions 
Chapter 23 Final provisions 
Source: WTO Secretariat based on the Agreement. 
3  PROVISIONS ON TRADE IN GOODS 
3.1.  Chapter 2 of the Agreement covers trade in goods. It is complemented by Chapters 3 
through 6, which also contain disciplines applicable to trade in goods.10 
3.2.  Chapter 2, inter alia , governs the elimination of customs duties according to the Parties' 
Schedules. It also prohibits the Parties from adopting or maintaining a measure that is inconsistent with the WTO Import Licensing Agreement (Article 2.7).  
3.3.  A Committee on Trade in Goods is established to address tariff and non-tariff barriers to 
trade in goods between the Parties (Article 2.11). It shall, among other functions, review Parties' non-tariff measures in certain circumstances to ensure that unnecessary obstacles to trade are not created. The Committee shall consider approaches that may better facilitate trade between the 
Parties and present to the Parties the results of its consideration, including any recommendations 
(Article 2.10). 
3.1  Import duties and charges,  and quantitative restrictions 
3.1.1  General provisions 
3.4.  The Parties agree to apply national treatment to each other's imports in accordance with 
Article III of GATT 1994 and its interpretative notes,  which are incorporated into and made part of 
the Agreement, mutatis mutandis (Article 2.2). 
3.5.  Neither Party shall adopt or maintain any prohibition or restriction on the import of any good 
of the other Party, except as provided in the Agreement or in accordance with Article XI of 
GATT 1994, which is, together with its interpretative  notes, also incorporated into and made part 
of the Agreement mutatis mutandis (Article 2.6). 
                                               
10 Chapters 3 through 6 contain disciplines on rules or origin; customs administration and trade 
facilitation; technical barriers to trade and sanita ry and phytosanitary measures; and trade remedies. WT/REG359/1 
 
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  3.6.  Articles 2.4 and 2.5 prohibit the imposition of customs duties on goods that re-enter a Party's 
territory after that good has been temporarily expo rted from that territory to the territory of the 
other Party for repair or alteration, and on commercial samples of negligible value, or printed advertising materials.  
3.7.  With respect to administrative fees and form alities, the Agreement builds on the provisions of 
Article VIII of GATT 1994 (Article 2.8). It also fo resees that each Party shall make available and 
maintain through the Internet a current list of the fees and charges it imposes in connection with 
importation or exportation.
11 
3.1.2  Liberalization of trade and tariff lines 3.8.  Neither Party shall increase any existing customs duty, or adopt any new customs duty
12, on 
an originating good. Unless otherwise provided in the Agreement, each Party shall progressively 
eliminate its customs duties on originating goods in accordance with its Schedule, contained in 
Annex 2-A to the Agreement (Article 2.3).  
3.1.3  Liberalization schedule 
3.9.  Annex 2-A to the Agreement contains the Parties' respective tariff elimination programmes. 
Section A refers to Korea's Schedule, while Section B contains Australia's tariff concessions.  
3.10.  The base rates of customs duty set out in both Parties' Schedules reflect their MFN rates in 
effect on 1 January 2010. 
3.11.  On request by a Party, consideration on accelerating the elimination of customs duties shall 
take place (paragraph 4 of Article 2.3). 
3.1.3.1  Australia 
3.12.  Australia's applied tariff in 2014 consisted of 6,184 lines at the HS eight-digit level 
(HS 2012). 99.73% of the tariff rates were ad valorem  and 17 lines had non- ad valorem  tariffs.13  
3.13.  Five staging categories apply to the elimination of customs duties by Australia: 
 Customs duties for goods in category "0" were  eliminated or were already duty free on 
the date of entry into force of the Agreement; 
 Customs duties for goods in category "3" and for the ad valorem  component of goods in 
category "3A" subject to compound rates of duty were reduced to 3.3% on the date of 
entry into force of the Agreement, and to 1.7% on 1 January 2015; the specific component of compound customs duties was reduced to A$8,000 on the date of entry into force of the Agreement, and to A $4,000 on 1 January 2015. The goods shall be 
duty-free on 1 January 2016;  
 Customs duties for goods in category "5" were reduced to 4% on the date of entry into 
force of the Agreement, and will be removed in four equal annual stages beginning on 1 
January 2015 and becoming duty-free on 1 January 2018; 
 Customs duties for goods in category "8A" shall start to be removed in five equal annual 
stages beginning on 1 January 2017. The goods shall be duty-free on 1 January 2021. 
 
3.14.  Table 3.1 shows tariff elimination commitments by Australia under the Agreement. In 2014, 2,943 lines were duty free on an MFN basis, re presenting 47.6% of Australia's total tariff, 
corresponding to 45% of its imports from Korea during 2011-2013. Immediately following the 
entry into force of the Agreement, an additional  2,680 lines (43.3% of Australia's tariff) also 
became duty-free for imports from Korea. This re sulted in 90.9% of Australia's tariff becoming 
duty free, corresponding to 84.9% of Australia's total imports from Korea (during 2011-2013). 
                                               
11 For Australia, information on a pplicable fees is available at: 
http://www.abs.gov.au/ausstats/abs@.nsf/mf/5352.0.  
12 A Party may, however, raise a customs duty to the level established in its Schedule to Annex 2-A 
following a temporary unilateral reduction. 
13 Eight lines consisted in compound duties, five li nes consisted in specific duties, and 4 lines were 
consisted in mixed duties. WT/REG359/1 
 
- 12 - 
 
  Further tariff lines will become duty free in 2016, 2018, and 2021, which corresponds to Australia's 
full implementation of its tariff elimination programme. As a consequence, Seven years after the entry into force of the Agreement, and at the end of the implementation period, the entirety of the 
Australian tariff will be duty free for imports from Korea.  
Table 3.1: Australia 
Tariff elimination commitments under the Ag reement and corresponding average trade 
Duty phase-out 
period Number of 
lines % of total 
lines in 
Australia's 
tariff 
schedule Value of Australia's 
imports from Korea 
(2011-2013) 
US$ million % of Australia's total 
imports from  
Korea 
2011-2013 
MFN Duty Free 2014 2943 47.6 3919.7 45.0 
2014 2680 43.3 3482.2 39.9 
2016 115 1.9 927.3 10.6 
2018 414 6.7 386.3 4.4 
2021 32 0.5 2.0 0.0 
Remain dutiable 0 0.0 0.0 0.0 
TOTAL 6184 100.0 8717.4 100.0 
Note: Based on the HS 2012 nomenclature.  
Source:  WTO estimates based on data from Australia and WTO-IDB. 
 
3.15.  Table 3.2 shows Australia's tariff elimination, by HS section. No tariff line will remain subject to duties once implementation is completed (in 2021). 
Table 3.2 Australia: Tariff elimination und er the Agreement, by HS Section  
HS 
Section MFN 
Average 
% No. of 
lines Duty-free 
lines under 
the  
MFN 2014 Number of duty-free lines 
under the Agreement Remain 
dutiable Avg. Final 
Tariff  
(Dutiable) 2014 2016 2018 2021 
I 0.0 339 332 7      
II 0.7 314 270 44      
III 1.8 49 31 18      
IV 2.6 287 139 148      
V 0.4 198 184 14      
VI 1.4 872 625 247      
VII 4.5 238 24 133 18 63    
VIII 3.6 92 29 60  3    
IX 3.3 143 50 93      
X 3.7 283 72 207  4    
XI 5.3 911 160 515  204 32   
XII 2.5 60 30 10  20    
XIII 3.4 161 50 101  10    
XIV 1.0 53 42 11      
XV 3.5 583 171 358 5 49    
XVI 2.9 953 405 485 25 38    
XVII 3.5 238 72 91 66 9    
XVIII 0.9 240 196 35  9    
XIX 1.6 19 13 6      
XX 3.7 144 41 97 1 5    
XXI 0.0 7 7       
Total 2.8 6184 2943 2680 115 414 32 - - 
Note: For the calculation of averages, specific rates are excluded and the ad valorem  parts of alternate 
rates are included. 
 Based on the HS 2012 nomenclature. 
Source:  WTO estimates based on data from Australia authorities and WTO-IDB. 
 WT/REG359/1 
 
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  3.1.3.2  Korea 
3.16.  Korea's applied tariff in 2014 consisted of 12,243 lines at the HS ten-digit level (HS 2012). 
99.22% of the tariff rates were ad valorem  and 95 lines had non- ad valorem  tariffs.14  
3.17.  Nineteen staging categories15 apply to the elimination of customs duties by Korea:16 
 Customs duties for goods in category "0" were  eliminated or were already duty-free on 
the date of entry into force of the Agreement; 
 Customs duties for goods in ten other categories have started to be removed on the date 
of entry into force of the Agreement. They sh all be eliminated in, respectively, 3, 5, 7, 
10, 12, 13, 15, 17, 18,  and 20 equal annual stages beginning on 1 January 2015. For 
category "3" the goods shall be duty-free on  1 January 2016 and the goods in category 
"20" shall be duty free on 1 January 2033; 
 Customs duties for goods in category "B" have started to be reduced on the date of 
entry into force of the Agreement. They sh all be reduced by 50% in ten equal annual 
stages and shall remain at that rate thereafter (from 1 January 2023); 
 For customs duties for goods in five cate gories ("S-1" through "S-5"), seasonal 
preferential rates have been defined. Duri ng the high season, preferential rates are 
duty-free for category "S-1" or shall remain at the base rate for the other categories. For 
the low season, preferential rates are pr ogressively removed to become duty-free 
according to the established schedule (between 5 and 18 years);  
 Customs duties for goods in catego ry "E" remain at the base rate; 
 No obligations regarding customs duties shall apply with respect to goods in staging 
category "R".17  
 3.18.  Table 3.3 shows tariff elimination commi tments by Korea under the Agreement. In 2014, 
1,956 lines were duty free on an MFN basis, representing 16% of Korea's total tariff, 
corresponding to 69.8% of its imports from Australia during 2011-2013. Following the entry into force of the Agreement, an additional 7,023 lines (57.4% of Korea's tariff) also became duty-free 
for imports from Australia. This resulted in 73.4% of Korea's tariff becoming duty free, 
corresponding to 83.6% of Korea's total imports from Australia (during 2011-2013). In 2024, ten years after the entry into force of the Agreement, 11,464 tariff lines, 93.7% of Korea's tariff and 95.2% of its imports from Australia will be duty free. At the end of the nineteen-year 
implementation period, in 2033, 12,016 tariff lines (98.1% of Korea's tariff), corresponding to 
99.7% of Korea's imports from Australia, will be duty-free. 227 tariff lines will remain dutiable 
once Korea's tariff elimination programme is completed.  
Table 3.3: Korea 
Tariff elimination commitments under the Ag reement and corresponding average trade 
Duty phase-out 
period Number of 
lines % of total 
lines in 
Korea's tariff 
schedule Value of Korea's 
imports from 
Australia 
(2011-2013) 
US$ million % of Korea's total 
imports from  
Australia 
2011-2013 
MFN Duty Free 2014 1956 16.0 16031.0 69.8 
2014 7023 57.4 3157.4 13.8 
2016 1121 9.2 120.5 0.5 
2018 606 4.9 2168.6 9.4 
2020 320 2.6 37.3 0.2 
2023 438 3.6 354.3 1.5 
2025 79 0.6 1.2 0.0 
2026 5 0.0 26.4 0.1 
                                               
14 Ninety-five lines consisted of mixed duties. 
15 Two sub-categories each are also create d within five of th e staging categories. 
16 Korea's Schedule is generally expressed in terms of the Harmonized Tariff Schedule of Korea (HSK) 
and its interpretation shall be governed by the various Notes applicable to the HSK. 
17 Nothing in the Agreement shall affe ct Korea's rights and obligations wi th respect to its implementation 
of the commitments set out in the WTO document WT/Let/492 ( Certification of Modifications and Rectifications 
to Schedule LX – Republic of Korea ) dated 13 April, 2005 and any amendments thereto. WT/REG359/1 
 
- 14 - 
 
  Duty phase-out 
period Number of 
lines % of total 
lines in 
Korea's tariff 
schedule Value of Korea's 
imports from 
Australia 
(2011-2013) 
US$ million % of Korea's total 
imports from  
Australia 
2011-2013 
2028 375 3.1 975.9 4.3 
2030 4 0.0 0.0 0.0 
2031 82 0.7 23.0 0.1 
2033 7 0.1 1.6 0.0 
Remain dutiable 227 1.9 62.8 0.3 
TOTAL 12243 100.0 22959.9 100 
Note: Based on the HS 2012 nomenclature.  
Source:  WTO estimates based on data from Korean authorities. 
 
3.19.  Table 3.4 shows Korea's tariff elimination, by HS section. The 227 lines that will remain 
subject to duties once implementation is comple ted are found in HS Sections I (live animals), 
II (vegetables), III (animal or vegetable fats and oi l, IV (prepared food), and IX (wood and wood 
articles), with final average tariffs at between 9. 7% and 630%, and with preferential rates at the 
same level as MFN rates, or below them in the case of products covered under HS Chapters 3, 7, 8, 11 and 12 as illustrated by Chart 3.1 below. The highest average tariffs are found, at 630%, in 
HS Chapter 15 (animal or vegetable fats and oils and their cleavage products).  
  WT/REG359/1  
 
- 15 - Table 3.4 Korea: Tariff elimination und er the Agreement, by HS Section  
HS 
Section MFN 
Average 
% No. of 
lines Duty-free 
lines under 
the  
MFN 2014 Number of duty-free lines under the Agreement 
Remain 
dutiable Avg. Final Tariff  
(Dutiable) 2014 2016 2018 2020 2023 2025 2026 2028 2030 2031 2033 
I 20.56 762 21 133 118 106 73 100 29 4 98 2 30 7 41 61.3 
II 100.85 690  29 69 76  58 44 91   128  45  150 281.3  
III 13.41 108  10 22 10 23 27   12  3  1 630.0  
IV 23.87 543  3 58 58  89 79 104 2 1 115 2 4  28 88.9 
V 3.78 392 51 314  21 6          
VI 7.48 2299  174 1,725 290  67 14 16 6  7      
VII 6.65 377 5 357 12 3           
VIII 7.69 242  28 200 13   1          
IX 5.76 316 38 32 8 57 39 79 41  15    7 9.7 
X 0.00 288  288              
XI 9.73 1289 28 1,100 60 95  6         
XII 10.10 100   99 1             
XIII 7.77 345 1 229 107 1 7          
XIV 5.20 118  5 109 4             
XV 4.18 1037 412 530 52 27 1 15         
XVI 5.68 2064  562 1,188 227  54 33          
XVII 5.77 333 80 245 8            
XVIII 6.76 563  77 414 56  16           
XIX 3.36 81 47 34             
XX 5.42 281  92 177 9  2   1        
XXI 0.00 15 15              
Total 13.47 12243  1956 7023 1121  606 320 438 79 5 375 4 82 7 227 211.0  
Note: For the calculation of averages, specific rates are excluded and the ad valorem  parts of alternate rates are included. 
 16 tariff lines18 under the Excluded category (Category R) reflect the MFN 2014 duties.  
 Based on the HS 2012 nomenclature. 
Source:  WTO estimates based on data from Korean authorities. 
                                               
18 100610.00.00, 100620.10.00, 100620.20.00, 100630.10.00, 100630.20.00, 100640.00.00, 110290.20.00, 110319.30.00, 110320.20.00, 110419.10.00, 180690.22.90, 
180690.29.99, 190120.10.00, 190120.90.00, 190190.90.91, 190190.90.99. WT/REG359/1 
 
- 16 - 
 
  Chart 3.1 Korea: Average of duti able rates, by HS Chapter  
050100150200250300350400450500550600650700
01 02 03 04 05 06 07 08 09 10 11 12 13 15 16 17 18 19 20 21 22 23 44Average Duty Rate
HS ChapterPreferential MFN
 
Note: 
Tariff lines subject to in-quota rates ar e excluded in the computation. For the calculation of averag es, specific rates 
are excluded and the ad valorem  parts of alternate rates are included. 
Based on the HS 2012 nomenclature. 
Source: WTO estimates based on data from Korean authorities. 
3.1.4  Tariff rate quotas 
3.20.  Korea applies tariff rate quotas (TRQs) to certain originating goods under the Agreement, as 
defined in Appendix 2-A-1.  
3.21.  Seven categories of products imported from Australia are subject to TRQs: (i) butter and other 
fats and oils derived from milk; (ii) fresh, grated or powdered, processed, and all other cheeses; (iii) 
oranges; (iv) malt and malting barley; (v) soybeans  for human consumption, identity-preserved; (vi) 
(other) fodder; and (vii) prepared dry milk and ot her. The in quota rate is duty free and quota 
quantities for each TRQ are set in Appendix 2-A-1 along with the number of years during which the 
TRQ quantities progressively increase (between 10 and 20 years). For some products (butter, cheese, 
malt and malting barley, fodder, prepared dry milk) the quota will be phased out following the transition period (up to 20 years for cheese and up to 15 years for the others). The quota quantities 
for the other products (oranges and soybeans) will remain unchanged once the transition period is 
over. Any quantity of originating goods imported fr om Australia under a TRQ provided in the Appendix 
shall not be counted toward the in-quota amount of any TRQ provided for such goods in the HSK 
(TRQs provided through WTO commitments). 
3.22.  Any enterprise or national of a Party fulfill ing Korea's legal and administrative requirements for 
imports is eligible to be considered for a TRQ alloca tion under the Agreement. Over the course of each 
year, Korea's administering authority shall publish, in a timely fashion on its designated publicly 
available Internet site, administration procedures, utilisation rates and remaining available quantities 
for each TRQ. Any new or modified administration of a TRQ shall be notified prior to its application.
19  
3.2  Rules of origin 
3.23.  Chapter 3 contains provisions on rules of origin and is supplemented by Annexes 3-A (Product 
Specific Rules Schedule), 3-B (Committee on outward processing zones on the Korean peninsula); 3C (Data elements for a certificate of origin), and 3-D (Model format for a certificate or origin).  
3.24.  A good qualifies as originating in a Party if it:  
                                               
19 For Korea, this inform ation is available at http://www.at.or.kr/article/apko363600/list.action . WT/REG359/1 
 
- 17 - 
 
   is wholly obtained, as defined in Article 3.2, in one or both of the Parties; 
 is produced entirely in the territory of one or both of the Parties exclusively from originating 
materials; 
 satisfies all applicable requirements of Annex 3-A as a result of processes performed entirely 
in the territory of one or both of the Parties by one or more producers; or 
 otherwise qualifies as an originating good under Chapter 3. 
3.25.  Annex 3-A contains product specific rules of origin and the conditions that need to be fulfilled 
for products to qualify as originating in case the goods are processed in one or both Parties. While a 
change in tariff classification, at the 2, 4, or 6-digit levels, as indicated in Annex 3-A, constitutes the 
main criteria used to determine origin in cases of substantial transformation of goods, the regional value content (RVC) can be used as an alternative criterion in a number of cases.
20 The RVC is 
calculated according to the methods defined under Articles 3.3 (Regional value content) and 
3.4 (value of materials). When the RVC is used as an alternative method to determine the origin of a 
good, in most cases, this means that the good must  have a RVC of not less than 40%. In some cases, 
the RVC is either not less than 30% using the bu ild-up method or not less than 40% using the 
build-down method. Annex 3-A also specifies for which tariff lines the good must be wholly obtained in the territory of one or both of the Parties
21, and for which one specific manufacturing or processing 
operation confirms origin.22 
3.26.  Non-originating products, whose value does no t exceed 10% of the adjusted value of the good, 
may be used in the processing of originating final products. The de minimis  tolerance is not fully 
applicable to goods classified in HS Chapters 1 through 14 (animal products and vegetables). For 
certain other products (some fish products; some vegetable; and some fruits and nuts) the 
de minimis  rule is not applicable. Moreover, specific rules are also defined for textiles and textile 
articles and "basic textile materials" (HS Chapte rs 50 through 63). Chapter 3 also contains, under 
Articles 3.7 through 3.14, disciplines on fungible goods and materials; accessories, spare parts and 
tools; packaging materials and containers for retail sale; indirect materials; non-qualifying operation; and direct transport. Furthermore, the Parties agree that certain goods shall be considered originating even if they have undergone working or processing outside Korea, on materials exported from Korea 
and subsequently re-imported there, provided that the working or processing takes place in the areas 
designated by the Parties pursuant to Annex 3-B to the Agreement. The Annex establishes a Committee on outward processing zones on the Korean peninsula that shall review the conditions on 
the Korean peninsula and identify geographic area s that may be designated as outward processing 
zones. 
3.27.  Cumulation of origin is governed by the provisions of Article 3.5. Originating goods of a Party, 
incorporated into a good in the territory of the other Party, shall be considered to be originating in the 
territory of the other Party. Consequently, a good is originating where the good is produced in the 
territory of one or both of the Parties by one or  more producers, provided that the requirements 
contained in Chapter 3 are fulfilled. 
3.28.  Section B of Chapter 3, complemented by Annexes 3-C
23 and 3-D24, contains disciplines on 
origin procedures, covering in particular: certificate of origin; bodies authorized to issue certificates of origin; claims for preferential tariff treatment; port-importation claims for preferential tariff 
treatment; waiver of certificate of origin; discrepancies and variations in documentation; obligations 
regarding exportations; record keeping requirements; origin verification; verification visit; denial of preferential tariff treatment; non-party invoices; co nfidentiality; penalties; and appeal procedures.  
                                               
20 This is particularly the case for goods classi fied under HS Chapters 30 through 32, and 38 (some 
chemicals and pharmaceuticals); 40 (some rubbers); 69 (s ome ceramics products); and products classified in 
HS Sections 15 through 20 (metal products, machinery, transport and precision equipm ent, arms and ammunition, 
miscellaneous articles). 
21 This is the case particularly for agricultural goods,  and fish products, classified under HS Chapters 1, 3 
through 10, and 12. 
22 This is the case particularly for goods classified under HS Chapters 50 through 60, and 63 (textiles); and 
under HS Chapters 27 (fuels and mineral oil products), and 28 through 38 (chemical products). 
23 Annex 3-C lists the data elements and give instructions on the content of certificates of origin. 
24 Annex 3-D provides for a model fo rmat of a certificate or origin. WT/REG359/1 
 
- 18 - 
 
  3.3  Export duties and charges,  and quantitative restrictions 
3.29.  No Party shall adopt or maintain any prohibition or restriction on the export or sale for export 
of any good destined for the territory of another Pa rty, except as provided in the Agreement or in 
accordance with Article XI of GATT 1994, which is, to gether with its interpretative notes, incorporated 
into and made part of the Agreement mutatis mutandis (Article 2.6). 
3.30.  Neither Party shall adopt or maintain any duty , tax, or other charge on the export of goods to 
the territory of another Party, unless also adopted or maintained when destined for domestic consumption (Article 2.9). 
3.4  Regulatory provisions on trade in goods 
3.4.1  Standards 3.31.  Chapter 5 covers sanitary and phytosanitar y measures (SPS) and technical barriers to trade 
(TBT). 
3.4.1.1  Technical barriers to trade 3.32.  Section A of Chapter 5 covers TBT and app lies to all standards, technical regulations, and 
conformity assessment procedures of the central level of government that may affect trade in goods 
between the Parties.
25 The Parties affirm their rights and obligations under the WTO Agreement on 
TBT (Article 5.2).  
3.33.  Building on WTO TBT disciplines, the Agreement establishes joint disciplines for the use of 
international standards, guides and recommendations (Article 5.3); positive consideration to be given 
to accepting technical regulations of one Party as equivalent to the other Party's own (Article 5.4); marking and labelling (Article 5.5); and conformity  assessment procedures (Article 5.6). The Parties 
also agree to strengthen their cooperation on TBT (Article 5.7). Article 5.8 elaborates on transparency 
requirements and Article 5.9 establishes a coordina tion mechanism through the TBT coordinators who 
shall work jointly in order to facilitate implementation of Section A of Chapter 5. The Parties may also 
establish an ad hoc Working Group whose mandat e they shall determine. Information exchange 
between the Parties is governed by Article 5.10.  
3.34.  Article 5.11 provides that the dispute settlement provisions set out in Chapter 20 on dispute 
resolution mechanism does not apply to Chapter 5. 
3.4.1.2  Sanitary and phytosanitary measures 
3.35.  Under the Agreement, SPS matters are regulated through Section B of Chapter 5. Each Party 
affirms its existing rights and obligations with respect to the other in the WTO Agreement on 
SPS (Article 5.14). Contact Points have been designated by each Party and shall facilitate the 
exchange of information related to issues under Se ction B. They shall also coordinate the technical 
meetings that are held according to Article 5.16 to, inter alia , enhance the implementation of the WTO 
SPS Agreement through cooperation between the Parties (Article 5.17). 
3.36.  Article 5.18 provides that the dispute resolution mechanism set out in Chapter 20 does not 
apply to Chapter 5.  
3.4.2  Safeguard mechanisms 
3.37.  Section A of Chapter 6 refers to the use of bilateral and global safeguard measures, while 
Section B establishes the applicable disciplines for agricultural safeguard measures under the Agreement.  
                                               
25 Technical specifications prepared by governmental bo dies for production or consumption requirements of 
such bodies are addressed in Ch apter 12 (government procurement). WT/REG359/1 
 
- 19 - 
 
  3.4.2.1  Global safeguards 
3.38.  Each Party retains its rights and obligations under Article XIX of GATT 1994 and the WTO 
Agreement on Safeguards, and the WTO Agreement on  Agriculture. The Agreement shall not confer 
any additional rights or impose any additional obligations on the Parties with respect to measures 
applied under the respective above-mentioned WTO ag reements, except that a Party applying such a 
measure under the WTO agreements may exclude imports of an originating good of the other Party, from the measure (Article 6.5). 
3.4.2.2  Bilateral safeguards 
3.39.  Disciplines on bilateral safeguard measures are contained in Articles 6.1 through 6.4. During 
the transition period
26, a Party may apply a bilateral safeguard measure. Such a measure may consist 
of either (i) a suspension of the further reduction of the customs duty on the good provide for under 
the Agreement, or (ii) an increase in the rate of customs duty on the good to a level not to exceed the 
lesser of the MFN applied rate of duty in effect at the time the safeguard measures is applied, and the 
MFN applied rate of duty on the g ood in effect on the day immediately preceding the date of entry into 
force of the Agreement. In case of a customs du ty applied to a good on a seasonal basis, the 
calculation shall be in relation to each season. 
3.40.  A bilateral safeguard measure may be applied for such period of time as may be necessary to 
prevent or remedy serious injury pursuant to Ar ticle 6.2 of the Agreement. The total period of 
application of a bilateral safeguard measure, including the period of initial application and any 
extension thereof, shall not exceed three years. Neither Party shall apply a bilateral safeguard measure more than once against the same good. Where the expected duration of a bilateral safeguard 
measure is over one year, the applying Party shall progressively liberalize it at regular intervals. 
3.41.  Bilateral safeguard measures may only be applied following an investigation in accordance with 
the procedures and requirements provided for in Ar ticles 3 and 4.2 of the WTO Safeguard Agreement. 
These two articles are incorporated into and made part of the Agreement, mutatis mutandis . No 
bilateral safeguard measure or provisional safeguar d measures (governed by Article 6.3) shall be 
applied against a particular good while a global safeguard measure under Article XIX of GATT 1994 and the WTO Safeguard Agreement in respect of that good is in place. 
3.42.  No later than 30 days after it applies a bi lateral safeguard measure, a Party shall afford an 
opportunity for the other Party to consult with it regarding appropriate trade liberalising compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of 
the additional duties expected to result from the bilateral safeguard measure. The applying Party shall 
provide such compensation as the Parties mutually agree (Article 6.4). If the Parties are unable to 
agree on compensation, the Party against whose or iginating good the safeguard measure is applied 
may suspend the application of concessions that have trade effects substantially equivalent to the 
safeguard measure.  
3.4.2.3  Special agricultural safeguard measures 3.43.  Section B of Chapter 6 (Article 6.7) governs the bilateral agricultural safeguard mechanism 
established by the Agreement that provides Korea wi th the possibility of imposing a (safeguard) duty 
when the aggregate volume of imports of certain Australian products
27, listed in Korea's Schedule in 
Annex 6-A, exceeds the trigger qu antity set out in the Annex.  
3.44.  Agricultural safeguard measures may not be maintained beyond the end of the calendar year in 
which it they are applied. Moreover, they may not be maintained if the period specified in the 
                                               
26 "Transition period" in relation to a particular good means the period from the date of entry into force of 
the Agreement until five years after the date of the elimination or the completion of the reduction period of the customs duties in accordance with that Party's Schedule of tariff commitments in Annex 2-A (elimination of customs duties). 
27 Annex 6-A sets out the goods originating in Australia that may be subject to agricultural safeguard 
measures under Article 6.7. The products concerned are: (a) certain beef; (b) certain malt (not roasted) and 
malting barley; (c) certain maize; and (d) certain sugar. Korea's Schedules also contain, for each product, the 
applicable trigger levels, the maximum safeguard duty ra te(s), and the maximum duration of the agricultural 
safeguard mechanism established by the Agreement. WT/REG359/1 
 
- 20 - 
 
  agricultural safeguard provisions of the Schedule to  Annex 6-A has expired. This period ranges from 
eight to 19 years from entry into force of the Agreement. 
3.45.  Agricultural safeguard measures may not be applied or maintained, on the same good, at the 
same time a bilateral safeguard, a global safeguard, or a safeguard applied under the WTO Agreement 
on Agriculture is also applied. 
3.46.  The implementation and operation of Article 6.7 may be the subject of discussion and review in 
the Committee on Trade in Goods. 
3.4.2.4  Other Safeguard measures 
3.47.  There are no other safeguard provisions in the Agreement. 
3.4.3  Anti-dumping and countervailing measures 3.48.  Section C of Chapter 6 covers antidumping and countervailing measures. 
3.49.  Each Party retains its rights and obligations under the WTO Agreement with regard to the 
application of antidumping and countervailing measures. Unless otherwise provided in Chapter 6, nothing in the Agreement shall be construed to confer  any additional rights or impose any additional 
obligations on a Party with respect to antidumping or countervailing measures.  
3.50.  The Parties also confirm their current practi ce of counting toward the average all individual 
margins, whether positive or negative, when anti dumping margins are established on the weighted-
to-weighted basis, transaction-to-transaction basis, or weighted-to-transaction basis, and share their 
expectation that such practice will continue. Moreover, the Party making a decision to impose an 
antidumping duty in accordance with Article 9. 1 of the WTO Agreement on Antidumping, shall 
normally apply the "lesser duty" rule. 
3.51.  Article 6.9 reiterates notification obligations and the necessity to initiate an investigation prior 
to taking antidumping or countervailing measures. Consultations between the Parties are also foreseen. Disciplines on undertakings, for both antidumping and countervailing measures, are 
contained in Article 6.10. 
3.4.4  Subsidies and State-aid 3.52.  There are no provisions on subsidies and State aid in the Agreement.  3.4.5  Customs-related procedures 
3.53.  Chapter 4 covers customs administration and tr ade facilitation. It aims at: (i) simplification of 
customs procedures of the Parties; (ii) ensuring predictability, consistency and transparency in the application of their customs laws, regulations and administrative procedures; (iii) ensuring the 
efficient and expeditious clearance of goods; (iv)  facilitating trade between the parties; and (v) 
promoting cooperation between the customs administ rations, within the scope of Chapter 4. The 
Parties agree on transparency disciplines, including the establishment of enquiry points, (Article 4.2); 
harmonization of documents and data elements (Article 4.3); use of automated systems in the 
paperless trading environment (Article 4.4); focussi ng customs resources on shipments of high-risk 
goods (Article 4.5); and simplification of custom s procedures for the efficient release of goods 
(Article 4.6). Chapter 4 also contains rules on advance rulings (Article 4.7), appeal procedures 
(Article 4.8); customs cooperation, including bila teral customs consultations (Articles 4.9 and 4.10); 
and confidentiality in relation to some disclosed information (Article 4.11, further to Articles 22.4 – on disclosure of information –0 and 22.5 – on confidentiality).  WT/REG359/1 
 
- 21 - 
 
  3.5  Sector-specific provisions on trade in goods 
3.5.1  Cooperation in agricult ure, fisheries and forestry 
3.54.  In Section A of Chapter 16 (Cooperation), the Parties commit to facilitate bilateral cooperation 
and explore new cooperative activities between them  in the fields of agriculture, fisheries and 
forestry, building on existing cooperative relationships at the bilateral, regional and multilateral levels, 
in support of mutual economic growth and developmen t. The scope of their cooperation is identified in 
Article 16.2, while some cooperative activities are listed in Article 16.3. The Parties shall also endeavour to promote cooperation in activities related to innovation, research and development 
(Article 16.4). Areas of cooperation in agriculture, fisheries and aquaculture, and forestry are 
identified in, respectively, Articles 16.5 to 16.7. Moreover, Article 16.8 foresees a number of areas of cooperation in the areas of human, animal or plant health and food safety. The Parties shall also 
explore opportunities to cooperate in the area of global food security, including through relevant 
regional and international fora (Article 16.9).  
3.55.  Contact points, established by Article 16.10, shall facilitate cooperation between the Parties. 
The Agreement also creates a Committee on Agricultural Cooperation, which shall, inter alia , review, 
monitor and assess the implementation of Section A of Chapter 16 (Article 16.11). 
3.5.2  Cooperation in energy and mineral resources 3.56.  In Section B of Chapter 16 (Cooperation), the Parties commit to enhance their cooperative 
relationship in the energy and mineral resources se ctor. Cooperative activities are identified under 
Article 16.14. Moreover, they agree to endeavou r to promote mutually beneficial trade and 
investment activities in these sectors (Article 16.15). They shall also exchange information relevant to 
energy and mineral resources (Article 16.16), and, in the event of a severe and sustained disruption 
to major energy and mineral resource supplies, they shall enter into consultations to explore appropriate actions that would contribute to a reso lution of the situation (Article 16.17). Contact 
points and a Committee on Energy and Mineral Resources Cooperation are established (Articles 16.18 
and 16.19). 
3.57.  In order to fulfil the objectives contained in Sections A and B of Chapter 16, the Parties shall 
provide, within the limits of their own capacities and through their own channels, adequate resources 
to support cooperative activities. 
4  PROVISIONS ON TRADE IN SERVICES AND INVESTMENT 4.1.  Chapter 7 contains disciplines on cross-border trade in services, while Chapter 11 covers 
investment. Annexes I and II to the Agreement, containing non-conforming measures, constitute 
integral parts of the Parties' commitments under these two Chapters. 
4.2.  Chapter 8 provides for some specific rules and disciplines related to financial services, and 
Annex III to the Agreement lists the Parties' related non-conforming measures.  
4.3.  Chapter 9 applies to measures adopted or maintained by a Party affecting trade in 
telecommunications services.
28  
4.4.  Chapter 10 complements the rules and disciplines on trade in services and investment as applied 
to measures affecting the movement of natural person s of a Party into the territory of the other Party. 
4.1  Scope and definitions 4.5.  Chapter 7 applies to measures of a Party affecting cross-border trade in services by service 
suppliers of the other Party. Cross-border supply of  a service covers the GATS modes of supply 1, 2 
and 4. It also covers GATS mode 3, though only in relation to provisions on market access, domestic regulation and transparency in developing and appl ying regulations. The supply of a service in the 
                                               
28 The term "telecommunications" means the transmission and reception of signals by any electromagnetic 
means. WT/REG359/1 
 
- 22 - 
 
  territory of a Party by a covered investment29 is therefore not covered by Chapter 7 in relation to 
national treatment and MFN treatment. Moreover, Chapter 7 does not apply to financial services 
(covered by Chapter 8); government procurement; subsidies or grants; or to any measure that is an exception to, or a derogation from, a Party's obligation under the TRIPS Agreement. In relation to air 
services, only aircraft repair and maintenance se rvices, the selling and marketing of air transport 
services, computer reservation system services, and specialty air services are covered. As under the 
GATS, services supplied in the exercise of governmental authority in a Party's territory are not covered.  
4.2  Denial of benefits 
4.6.  Under Article 7.11, a Party may deny the benefits of Chapter 7 (cross-border trade in services) 
to a service provider of the other Party if the servic e provider is an enterprise owned or controlled by 
persons of a third-party, and the denying Party ad opts or maintains measures with respect to the 
third-party or a person of the third-party that prohibit transactions with the enterprise of that would be violated or circumvented if the benefits of Ch apter 7 were accorded to the enterprise. Moreover, a 
service provider of the other Party may also be denied the benefits of Chapter 7 if it is an enterprise 
owned or controlled by a person of the denying Party and if such enterprise has no substantive 
business operation in the territory of the other Party.  The same approach is followed, in relation to 
investment (Chapter 11), for investors of the other Party and for their investments (Article 11.11). 
4.3  General provisions on trade in services 
4.3.1  Market access 4.7.  In relation to cross-border trade in servic es (Chapter 7), a Party shall not adopt or maintain, 
either on the basis of a regional subdivision or of its entire territory, measures that impose the types 
of limitations covered by Paragraphs 2(a) to 2( e) of Article XVI of the GATS (Article 7.4).  
4.8.  In relation to financial services, market access is granted by each Party for financial institutions 
of the other Party or investors of the other Party seeking to establish such institutions (Article 8.4).
30 
4.9.  However, the Parties' commitments on market access do not apply to the existing 
non-conforming measures which they list concerning the obligation of market access in Annex I to the Agreement and/or any (future) measure that they adopt or maintain with respect to sectors, 
sub-sectors or activities listed concerning the obligation of market access (Article 7.4) in Annex II of 
the Agreement. In relation to financial services, the provisions on market access shall not apply to existing non-conforming measures listed concerning the obligation of market access (Article 8.4) in 
the Party's Schedules (Section A of Annex III to the Agreement) or to measures taken by a Party with 
respects to sectors, sub-sectors, or activities co ncerning the obligation in Article 8.4 listed in the 
Party's Schedules (Section B of Annex III to the Agreement). 
4.10.  Chapter 11 on investment does not contain market access obligation along the lines of GATS 
Article XVI, but, as noted earlier, Article 7.1.2 stipulates that market access, domestic regulation and transparency provisions specified for cross-border tr ade in services shall also apply to measures by a 
Party affecting the supply of a service in its territory by a covered investment. Moreover, Article 11.3 
on national treatment in relation to investment provides for market access. 
4.3.2  National and MFN treatment 4.11.  In relation to cross-border trade in services  (Chapter 7), Articles 7.2 and 7.3 contain national 
treatment and MFN clauses applicable to the Parties'  service providers. In relation to investment 
(Chapter 11), similar provisions are contained in Articles 11.3 and 11.4 with respect to the Parties' investors and their investments when those are related to the establishment, acquisition, expansion, 
management, conduct, operation, and sale or other di sposition of investments. In relation to financial 
services, national treatment is granted by each Party to investors of the other Party with respect to 
                                               
29 T h e  t e r m  " c o v e r e d  i n v e s t m e n t "  m e a n s ,  w i t h  r e s p e c t  t o  a  P a r t y ,  a n  i n v e s t m e n t  i n  i t s  t e r r i t o r y  o f  a n  
investor of the other Party that is in existence as of the date of entry into force of the Agreement or established, 
acquired, or expanded thereafter. 
30 The prohibited types of limitations are defined under letters a) and b) of Article 8.4. WT/REG359/1 
 
- 23 - 
 
  establishment, acquisition, expansion, management, conduct, operation and sale or other disposition 
of financial institutions and investments in financial institutions in its territory. The same treatment is 
also granted to financial institutions of the other Party and their investments in financial institutions (Article 8.2). Moreover, in relation to cross-border trade, national treatment is granted by each Party 
to cross-border financial service suppliers of the ot her Party, under specified terms and conditions and 
for the services specified for each Party in Annex 8-A.
31 MFN treatment is moreover granted by each 
Party to investors of the other Party, financial institutions of the other Party, investments in financial institutions, and cross-border financial services suppliers of the other Party (Article 8.3).  
4.12.  The Parties' commitments on national an d MFN treatment do not, however, apply to the 
existing non-conforming measures which they list concerning the obligation of national and MFN treatment (Articles 7.2, 7.3, 11.3 and 11.4) in Annex I to the Agreement and/or any measure that 
they adopt or maintain with respect to sectors, su b-sectors or activities listed concerning the same 
obligations in Annex II of the Agreement. In relation to financial services, the provisions on national and MFN treatment shall not apply to existing non-co nforming measures listed concerning Articles 8.2 
and 8.3 in the Party's Schedules (Section A of Anne x III to the Agreement) or to measures taken by a 
Party with respects to sectors, sub-sectors, or activities concerning the obligations in Articles 8.2 and 8.3 listed in the Party's Schedules (Section B of Annex III to the Agreement). 
4.3.3  Local presence 
4.13.  In relation to cross-border trade in services (Chapter 7), neither Party shall 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 service (Article 7.5).  
4.14.  The Parties' commitments on local presence do not, however, apply to the existing 
non-conforming measures which they list concerning the obligation of local presence (Article 7.5) in Annex I to the Agreement and/or any measure that they adopt or maintain with respect to sectors, 
sub-sectors or activities concerning the obligations in Article 7.5 listed in Annex II of the Agreement. 
4.3.4  Performance requirements 4.15.  With respect to investment (Chapter 11), neither Party shall impose or enforce the performance 
requirements listed in Article 11.9. In addition, a Party may not enforce any commitment or 
undertaking, in connection with the establishment,  acquisition, expansion, management, conduct, 
operation, or sale or other disposition of an investment of an investor of a Party or of a third-party in its territory. Some exceptions are however listed under Article 11.9, provided that the concerned 
measures are not applied in an arbitrary or unjustifiable manner, or do not constitute a disguised 
restriction on international trade or investment. A Party may condition the receipt or continued receipt of an advantage, in connection with an investment in its territory of an investor of a Party or of a 
third-party, on compliance with a requirement to lo cate production, supply a service, train or employ 
workers, construct or expand particular facilities , or carry out research and development, in its 
territory.  
4.16.  The Parties' commitments on performance requ irements do not, however, apply to the existing 
non-conforming measures which they list concerning the obligation of performance requirement 
(Article 11.9) in Annex I to the Agreement and/or  any measure that they adopt or maintain with 
respect to sectors, sub-sectors or activities concerning the obligations in Article 11.9 listed in Annex II 
of the Agreement. 
4.3.5   Senior Managers and Boards of Directors 4.17.  With respect to investment (Chapter 11), neit her Party shall require that an enterprise of that 
Party that is a covered appoints to senior management positions natural persons of any particular 
nationality (Article 11.10). A Party may require that a majority of the board of directors, or any committee thereof, of an enterprise of that Party that is a covered investment, be of a particular 
                                               
31 For the provision and transfer of financial data processing and related software relating to banking and 
other financial services, Korea is grante d a transitional period of two years from the date of entry into force of the 
Agreement. WT/REG359/1 
 
- 24 - 
 
  nationality, or resident in the territory of the Part y, provided that the requirement does not materially 
impair the ability of the investor of the other Party to exercise control over its investment. 
4.18.  In relation to financial services, financial institutions of one Party shall not be required by the 
other Party to engage individuals of any particular nationality as senior managerial or other essential 
personnel. In addition, neither Party shall require th at more than a minority of the board of directors 
of a financial institution of the other Party be composed of nationals of the other Party, persons residing in the territory of the Party, or a combination thereof (Article 8.8). 
4.19.  The Parties commitments on Senior Managers and Boards of Directors do not, however, apply 
to the existing non-conforming measures which they list concerning the obligation related to senior 
managers and boards of directors (Article 11.9) in Annex I to the Agreement and/or any measure that they adopt or maintain with respect to sectors, sub- sectors or activities concerning the obligations in 
Article 11.9 listed in Annex II of the Agreement. In relation to financial services, the provisions on 
senior management and boards of directors shall not apply to existing non-conforming measures concerning the obligation related to senior managers and boards of directors (Article 8.8) listed in the 
Party's Schedules (Section A of Annex III to the Agreement). Moreover, these provisions shall not 
apply to measures taken by a Party with respects to sectors, sub-sectors, or activities concerning the obligations in Article 8.8 listed in the Party's Schedules (Section B of Annex III to the Agreement). 
4.3.6   Movement of natural persons 
4.20.  Chapter 10 applies to measures affecting the movement of natural persons of a Party into the 
territory of the other Party under any of the categories referred to in Annex 10-A, and listed under Boxes 4.1 and 4.2 below. 
4.21.  While requirements and procedures relating to immigration formalities remain within the sphere 
of competence of each Party, the Agreement establis hes some principles in relation to requirements 
and procedures relating to the movement of natural persons (Article 10.4). Each Party shall also 
endeavour, to the extent possible, to provide fa cilities for online lodgement and processing of 
immigration formalities (Article 10.5). Transparency provisions are contained in Article 10.7. 
4.22.  Resolution of matters that might affect the operation of Chapter 10 shall be made through 
cooperation and consultations between the Parties.  The dispute settlement procedures provided in 
Chapter 20 shall not apply to Chapter 10 unless the matter involves a pattern of practice, and all 
administrative remedies regarding the particular matter have been exhausted.  
4.23.  Tables 4.1 and 4.2 below summarize entry and temporary stay for the categories for which the 
Parties make commitments under Chapter 10 and some of the modalities agreed upon. 
Table 4.1 Australia: Commitments on movement of natural persons 
Category Sub-categories Length of stay 
Business Visitors (i) Business visitors (no direct sales to 
general public);  (ii) Service sellers. - Up to 90 days, 
 - Up to 6 months, renewable.  
Intra Corporate Transferees (i) Executives or senior managers,  
(ii) Specialists. - Up to 4 years, renewable.  
- Up to 2 years, renewable. 
Independent Executives Executives of an enterprise with 
headquarters in Korea, with branch or 
subsidiary established in Australia, responsible for a substantial part of the enterprise's operations in Australia. - Up to 2 years. 
Contractual Service 
Suppliers (i) Employees contracted by a Korean 
enterprise (no commercial presence),  
(ii) Employees contracted by an 
enterprise actively operating in 
Australia. - Up to 1 year, renewable. 
Accompanying Spouses and 
Dependents Spouses or dependent of a natural 
person of Korea who has been granted a temporary stay for a period of no longer than 12 months. - An equal period to that of the natural 
person. 
Source: WTO Secretariat, based on Section A of Annex 10-A.  WT/REG359/1 
 
- 25 - 
 
  Table 4.2 Korea: Commitments on  movement of natural persons 
Category Sub-categories Length of stay 
Business Visitors (i) Business visitors (no direct sales to 
general public);  (ii) Service sellers; (iii) investors or employees of investors, who is a manager, executive, or specialist, to establish an investment - Up to 90 days. 
Intra Corporate Transferees (i) Executives,  
(ii) Managers; 
(iii) Specialists. - Up to 3 years, renewable. 
Traders and Investors (i) Business persons seeking to carry 
on substantial trade in goods or services; (ii) Business persons establishing, developing or administering an investment or providing advice or key technical services to the operation of an investment, or in the process of committing a substantial amount of 
capital. - Up to 2 years, renewable. 
Contractual Service 
Suppliersa*  - Up to 1 year (or the duration of the 
contact if less than 1 year). 
Accompanying Spouses and 
Dependents Spouses or dependent of a natural 
person of Australia who has been granted a temporary stay. - An equal period to that of the natural 
person. 
a Korea's commitments are limited to the contractua l service suppliers listed in Appendix 10-A-1. 
* Labour market testing may be required as a condit ion for temporary entry of, or numerical restriction 
may be imposed relating to, temporary entry for professionals. 
Note: Korea may refuse to grant temporary entry to a natura l person who is likely to be involved in any labour 
dispute that is in progress and adversely affect  the settlement of such labour dispute.  
Source: WTO Secretariat, based on Section B of Annex 10-A.   
4.4  Liberalization commitments 
4.24.   A "negative list" approach is used throughout the Agreement in relation to cross-border trade 
in services. Article 7.6 (cross-border trade in se rvices) provides for the possibility to maintain 
non-conforming measures listed in Annex I to th e Agreement and/or to adopt new measures in 
sectors, sub-sectors, or activities listed under Annex II to the Agreement. With regard to Article 11.12 
(investment), the same approach is followed for disciplines on investment. Non-conforming measures related to financial services are listed by each Party in Annex III in connection with Article 8.9.  
4.25.  The sections below compare the Parties' liberalization commitments under the Agreement and 
their GATS commitments. Each Part y's GATS schedule is compared to Annexes I, II and III to the 
Agreement. After recalling GATS MFN exemptions and identifying horizontal limitations in the GATS and in the Agreement, Tables 4.3 and 4.4 summarize  specific commitments under the Agreement, by 
main sectors and sub-sectors and compare them  with GATS commitments. Improvements over 
existing GATS commitments are either a reduction of  the limitations to market access and/or national 
treatment, a relaxation of the form of establishm ent under mode 3, and/or additional commitments 
and increased coverage. However, horizontal limitations in the GATS Schedule of Specific 
Commitments and reservations covering all sectors are not included. Moreover, mode 4 commitments and limitations are, to a large extent, excluded. Fu rthermore, as commitments reflected in negative 
lists are difficult to compare with GATS types of comm itments, the following sections are to be read in 
conjunction with the Parties' schedules of commitments under the Agreement. 
4.4.1  Australia 4.4.1.1  MFN and horizontal commitments 
4.26.  In the GATS, Australia took commitments in  103 out of 155 services sectors. It did not make 
commitments, inter alia , on certain specific business services; postal and courier services, as well as 
audiovisual services; some education services (primary and adult education services); sanitation and WT/REG359/1 
 
- 26 - 
 
  similar services; hospital and social services; ente rtainment services and libraries, archives, museums 
and other cultural services; and internal waterway s, space and rail transport services. Under the 
Agreement, as a negative list approach is chosen, as  a principle, all the sectors are covered, though a 
number of non-conforming measures are listed in Annexes I to III to the Agreement.  
4.27.  Under the GATS, Australia scheduled MFN ex emptions for audiovisual services. The reserved 
areas cover co-production and/or actions taken to respond to any unreasonable measures imposed on Australian services or service suppliers by another WTO Member. Under the Agreement, MFN 
treatment commitments
32 for investment are referred to in Article 11.4, and, for cross-border trade, 
are governed by Article 7.3, while MFN-non-conformi ng measures are listed in Annexes I and II. With 
respect to financial services, the MFN commitment is contained in Article 8.3 and non-conforming 
measures are listed in Annex III to the Agreem ent. Under the Agreement, as under the GATS, 
Australia reserves MFN non-conforming measures that might be taken in the audiovisual sector. It 
also registers other MFN exemptions for existing measures (for example in connection to the activity of migration agent, or with regard to all existing non-conforming measures at the regional level of 
government), and to cover measures that may be ad opted in the future in favour of disadvantaged 
groups; in relation to the necessity to protect Australia's essential security interests; in connection with investment screening for land ownership or the enforcement of laws maintained for public purpose; with respect to primary and public educat ion as well as the supply of education services 
though commercial presence; the distribution of tobacco product, alcoholic beverages or firearms; and 
with respect to human health. Under the Agreement, Australia also reserves the right to adopt or maintain any measures that accord more favourable treatment to the service suppliers or investors of 
third-parties under any bilateral or multilateral international agreement in force or signed prior to the 
date of entry into force of the Agreement.
33 It moreover reserves the right to derogate from the MFN 
principle in relation to advantages that might be granted under any future bilateral or multilateral 
international agreement involving aviation, fisheries, or maritime matters, including salvage. 
According to Australia, in order to compare MFN exemptions under the GATS and under the Agreement, GATS Article V should also be taken into account. 
4.28.  Under the GATS, Australia makes horizontal reservations for establishment (mode 3) and in 
connection with the Foreign Acquisitions and Takeovers Act of 1975. Some residency requirements are 
also listed and preferential measures in favour of indigenous persons or organisations are unbound.
34 
Under the Agreement, Australia replicates these reservations. While the coverage of Australia's 
commitments is expended through the negative listi ng approach, it consequently expands residency 
requirements to include, inter alia , application for the incorporation of an association, the operation of 
co-operatives, or the activities of limited or incorporated limited partnership in certain territories. 
Australia also reserves the right to adopt or maintain any measures at the regional level of 
government that is not inconsistent with its Revised Services Offer of 31 May 2005, made in the context of the WTO Doha Development Agenda negotiations.  
4.4.1.2  Sector specific commitments 
4.29.  The following section identifies some of the main differences, by sector, between Australia's 
GATS schedule and its sector-specific commitments und er the Agreement. It should also be read in 
conjunction with Annexes I, II, and III of the Agreement.  
4.30.  As a consequence of the approach chosen (negative list), the coverage of Australia's 
commitments under the Agreement is expended for most sectors, as compared to its commitments under GATS, while some limitations (both horizontal and sector specific) are introduced in its list of 
non-conforming measures, as compared to the limitations registered under GATS. Australia indicates 
that a number of restrictions and limitations listed in relation to non-conforming measures are related to sub-sectors or activities that were not fully committed under GATS and/or relate to matters for which GATS does not include an express obligation (in particular in relation to senior management and 
boards of directors, and local presence). It ther efore considers that the Agreement does not include 
additional limitations, as compared to its commitments under GATS, and that the treatment under the Agreement is similar as under GATS while additional  transparency is provided through the use of the 
negative list approach.  
                                               
32 Not encompassing ISDS procedures.  
33 This includes measures adopted or maintained unde r any existing or future protocol to the ANZCERTA. 
34 Mode 4 commitments and re servations are handled in a separate section of this factual presentation. WT/REG359/1 
 
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  Table 4.3 Australia: comparison between the GATS and Agreement specific commitments 
Sectors / Sub-sectors GATS  FTA 
Compared 
to the 
GATS Commitments on 
existing  
measures 
 Commitments on  
future  
measures 
 
1. Business services     
A. Professional Services Partial  Improved*  Partial Full 
B. Computer and Related Services  Partial  Improved Full Full 
C. Research and Development Services  Partial  Improved Partial Full 
D. Real Estate Services  Partial  Similar Partial Full 
E. Rental/Leasing Services without Operators  Partial  Improved Full Full 
F. Other Business Services Partial  Similar* Partial Full 
2. Communication services      
A. Postal services --- New Full Full 
B. Courier services --- New Full Full 
C. Telecommunication services  Partial  Similar Partial Full 
D. Audiovisual services --- New Full Partial 
3. Construction and related engineering services      
A. General construction work for buildings Full Similar Full Full 
B. General construction work for civil Engineering Full Similar Full Full 
C. Installation and assembly work  Full Similar Full Full 
D. Building completion and finishing work  Full Similar Full Full 
E. Other --- New Full Full 
4. Distribution services     
A. Commission agents' services Partial  Similar* Partial Full 
B. Wholesale trade services Partial  Similar* Partial Full 
C. Retailing services Partial  Similar* Partial Partial 
D. Franchising Full Similar* Full Full 
5. Education services     
A. Primary education services --- New Full Partial 
B. Secondary education services  Partial  Similar* Full Partial 
C. Higher education services  Partial  Similar* Full Partial 
D. Adult education --- New Full Partial 
E. Other education services  Partial  Similar* Full Partial 
6. Environmental services     
A. Sewage services Full Similar Full Full 
B. Refuse disposal services Full Similar Full Full 
C. Sanitation and similar services  Full Similar Full Full 
D. Other --- New Partial Full 
7. Financial services     
A. All insurance and insurance-related services  Partial  Similar Full Partial 
B. Banking and other financial services Partial  Similar Full Partial 
8. Health related and social services     
A. Hospital services --- New Partial Partial 
B. Other Human Health Services Partial  Similar Partial Partial 
C. Social Services --- New Full Full 
D. Other --- New Full Partial 
9. Tourism and travel related services      
A. Hotels and restaurants (including catering) Full Similar Full Full 
B. Travel agencies and tour operators services Partial  Similar Partial Full 
C. Tourist guides services Full Similar Full Full 
10. Recreational and cultural and sporting services     
A. Entertainment services --- New Full Full 
B. News agency services Full Similar Full Full 
C. Libraries, archives, museums and other cultural services  --- New Full Partial 
D. Sporting and other recreational services  Partial  Improved Full Partial 
11. Transport services      
A. Maritime Transport Services Partial  Similar Partial Partial 
B. Internal Waterways Transport --- New Full Partial 
C. Air Transport Services Partial  Improved Partial Partial 
D. Space Transport  --- New Full Full 
E. Rail Transport Services --- New Full Full 
F. Road Transport Services Partial  Improved Partial Full 
G. Pipeline Transport  Full Similar Full Full 
H. Services auxiliary to all modes of transport  Partial  Improved Full Full 
I. Other Transport Services  --- New Full Full 
General Note: MFN and Horizontal limitations, as well as Mode 4 commitments/limitations not considered. 
Partial:  Specific commitments subject to some limitati on(s) under market access or national treatment, under 
any of the three modes. WT/REG359/1 
 
- 28 - 
 
  Full: Specific commitments not subject to limitation(s) under market access or national treatment, under any 
of the three modes. 
---: No specific commitment. New: New commitments under the Agreement (full or partial, with or without limitations) which can, in most 
but not all cases, be seen as "improved". 
Improved: Overall improved commitments made under the Agreement compared to those under the GATS. 
Similar: Similar commitments (Agreement vs GATS); though possibly, in individual cases, with limited 
improvements and/or limited  additional reservations. 
Limited: Some additional limitations (as compared to GATS commitments). 
*: Subject to the interpretation of Article XVII of the GATS. 
 
Source: Draft Consolidated GATS Schedule of Spec ific Commitments (S/DCS/W/AUS), prepared by the 
Secretariat (in 2003) and Australia's Schedules annexed to the Agreement.  
 
4.4.1.2.2  Business services 
4.31.  No reservation is made for new measures th at Australia may take in the future. However, a 
number of existing measures are listed as non-conforming measures. Australia improves the coverage 
of its commitments by virtue of using a negative list, as compared to its commitments under GATS. 
This is in particular the case for computer and related services and rental and leasing services without operators, for which it has full commitments without limitations under the Agreement. Some 
reservations are made for the other sub-sectors of business services. As to the types of limitations in 
Australia's commitments under the Agreement, while, in certain cases, the reservations mirror those 
in the GATS, a number of limitations or restrictions that are scheduled under the Agreement are not 
registered (or registered differently) under the GATS , particularly for some professional services as 
well as real estate services and other business services. Such limitations often relate to residency requirements, in particular in connection with restrictions applicable at the sub-federal level.
35  
4.4.1.2.3  Communication services 
4.32.  Full commitments are made in the Agreement for postal and courier services, which are 
unbound under the GATS. Australia nevertheless clarifies that certain activities undertaken by Australia Post constitute services supplied in the ex ercise of government authority. Restrictions under 
the GATS are, in essence, mirrored by the Agreem ent, while audiovisual services, unbound under the 
GATS, are covered by the Agreement but subject to a number of limitations and conditional specific 
commitments.
36  
4.4.1.2.4  Construction and related engineering services 
4.33.  As under the GATS, full commitments without limitations are made.  4.4.1.2.5  Distribution services 4.34.  Though the coverage under the Agreement is improved slightly, as compared to under the 
GATS, some residency (and registration) requirements, at sub-federal level, are added in particular in 
relation to the distribution of firearms, tobacco, and wine.
37  
                                               
35 In relation to other business services, Australia indicates that GATS does not include an express senior 
management and boards of directors' ob ligation similar to Article 11.10 or an express local presence obligation 
similar to Article 7.5. 
36 Australia nevertheless clarifies that GATS does not include a discreet local presence obligation similar to 
the one included in Article 7.5. Additionally, for firearms , tobacco, and alcohol regulation, Australia relies on the 
coverage of Article XIV of the GATS. 
37 In connection to non-conforming me asures listed for some distribution services (real estate agents; and 
distribution of firearms, liquor, kava, and tobacco), Australia indicates that GATS does not include an express local 
presence obligation similar to Article 7.5. In relation to  the Wine Industry Act 1994, Australia clarifies that this 
reservation does not intersect with it s GATS commitments and that it does  not restrict a foreign person or 
company from establishing a commercial presence  to sell wine nor is it discriminatory. WT/REG359/1 
 
- 29 - 
 
  4.4.1.2.6  Educational services 
4.35.  Australia reservation of its right to adopt or maintain any measure with respect to the supply of 
education services through commercial presence reflects the different approach to the scheduling of its education commitments adopted under the Agreement as compared to the one used under GATS.
38  
4.4.1.2.7  Environmental services 
4.36.  As under the GATS, full commitments are made without limitations.  4.4.1.2.8  Financial services 4.37.  Largely based upon its GATS commitments, Australia's commitments contain some residency 
requirements and transitional guarantee arrangem ents covering liabilities of the previously 
Government-owned Commonwealth Bank. Moreover, Australia reserves the right to adopt or maintain any measure with respect to guarantees by the Government of Government-owned entities, including 
guarantees related to the privatisation of such entities, which may conduct financial operations. It also 
reserves all existing non-conforming measures applicable to financial services at the regional level of Government. 
4.4.1.2.9  Health relate d and social services 
4.38.  While all health related sub-sectors are covered by virtue of the negative list approach, the 
carve-out for any measure with respect to human heal th essentially offers a similar level of coverage 
as under the GATS.
39  
4.4.1.2.10  Tourism and travel related services 
4.39.  Australia's commitments under the Agreement, offering full and almost unrestricted coverage 
largely mirrors its GATS commitments.40 
4.4.1.2.11  Recreational, cult ural and sporting services 
4.40.  Australia builds on its GATS commitments, improves its coverage in particular in relation to 
sporting and other recreational services, but has a limitation on gambling and betting related services. 
The quasi-horizontal carve out for subsidies or grants applicable to investment in Australian cultural 
activity and the sectoral reservation of Australia's right to adopt or maintain any measure with the creative arts, cultural heritage and other cultural industries, including libraries, archives, museums and other cultural services apply. 
4.4.1.2.12  Transport services 
4.41.  While replicating some of the limitations contained under its GATS Schedule and expanding the 
coverage of specific commitments through the negative list approach, Australia improves the scope 
and depth of its commitments as compared to under the GATS. 
                                               
38 Australia's GATS commitments in relation to education services are contained in Part II(5) of Australia's 
Schedule of Specific Commitments to the GATS and the ho rizontal commitment s regarding Mode 4. In relation to 
secondary, higher, and some other education services, Australia indicates that GATS does not include either a discreet local presence obligation similar to Article 9.6, or obligations in relation to senior manager and boards of directors or prohibition of performance requirements. Australia notes that the reservation is non-discriminatory in 
its application.   
39 Australia notes that it has, since th e entry into force of the Agreement, introduced a national regulation of 
health practitioners on a non-discrimin atory basis. It also clarifies that "any measure with respect to human 
health" includes measures unrelated to human health pe r se, but which apply to companies which provide human 
health services. 
40 While general commercial presence for travel agency and tour operator services (required under GATS) is 
no longer required, some requirements have been in troduced for Queensland (business address) and Western 
Australia (principal place of business). WT/REG359/1 
 
- 30 - 
 
  4.4.2  Korea 
4.4.2.1  MFN and horizontal commitments 
4.42.  In its GATS schedule, Korea took commitments in 98 out of 155 services sectors. While partial 
commitments are made for many sectors, real estate services, postal and courier services, the entire 
education sector, some environmental services, the entire health related and social services sector 
and recreational and cultural and sporting services , and some transport services (internal waterways 
transport, space, rail and pipeline transport services) are unbound under the GATS. Under the 
Agreement, as a negative list approach is used, all the sectors are covered, though a number of non-
conforming measures are listed in Annexes I to III to the Agreement. 
4.43.  Korea's only MFN exemption under the GATS is for computerized reservation systems. Under 
the Agreement, while Korea does not list any non-MFN existing measures, it registers a number of 
reservations for measures it may take in the future in some sectors or sub-sectors for which it has no 
GATS commitments. The specific sectors, sub-sectors or activities for which Korea may maintain existing or adopt new or more restrictive measures that do not conform with MFN obligations under 
Article 7.3 (for cross-border trade in services) or 11.4 (for investment) include measures for: 
preferential treatment for disadvantaged groups; for taxi services and scheduled passenger road 
transportation services or some freight road transportation services; for internal waterways transportation services and space transportation services; for broadcasting services in various forms; 
for education services, at various levels and for various specialties; and for the provision of 
international maritime passenger transportation services, maritime cabotage, and the operation of Korean vessels. Like Australia, Korea reserves the right to adopt or maintain any measures that 
accord more favourable treatment to the service suppliers or investors of third-parties under any 
bilateral or multilateral international agreement in force or signed prior to the date of entry into force of the Agreement. It moreover reserves the rights to derogate from the MFN principle in relation to 
advantages that might be granted under any future bilateral or multilateral international agreement 
involving aviation, fisheries, or maritime matters, including salvage. Furthermore, a reciprocity condition is registered in relation to a MFN-reservation connected to measures involving sharing of the radio spectrum for certain satellite transmission and broadcasting services. In order to compare MFN 
exemptions under the GATS and under the Agreement it is nevertheless necessary to also take into 
account the MFN exemptions implied by agreements concluded by the Parties under Article V of the 
GATS. 
4.44.  Under the Agreement, as under the GATS, Kore a has horizontal reservations on the purchase of 
land, in relation to establishment. Another horizont al reservation under the GATS is on the movement 
of natural persons (mode 4) and is addressed in another section of this factual presentation. The 
horizontal limitation on foreign portfolio investments in certain Korean stocks listed under the GATS is 
reflected under some restrictions scheduled by Korea under the Agreement (in particular under Annex III). Under the Agreement, Korea also registers exemptions for national security or matters otherwise covered under Articles XIV and XIV bis of GATS. Non-conforming measures related to 
possible future privatisation operations are listed under the Agreement.  
4.4.2.2  Sector specific commitments 4.45.  The following section identifies some of the main differences, by sector, between Korea's GATS 
schedule and its sector-specific commitments under the Agreement. It should also be read in 
conjunction with Annexes I, II, and III of the Agreement.  
4.46.  As a consequence of the approach chosen (n egative list), the coverage of Korea's commitments 
under the Agreement is expended for most sectors, as compared to its commitments under GATS. 
While some limitations are listed as non-conforming measures, in particular in relation to the requirement to establish an office in Korea as a condition to perform certain activities (applicable for a number of sectors, but not all), Korea is of the view that the commitment on establishment 
requirement or local presence is not covered under the GATS and that, consequently, this requirement 
was not required to be listed in its GATS Schedule. Korea also considers that the Agreement does not include additional limitations, as compared to its commitments under GATS, and that its commitments 
under the Agreement constitute a more liberalized version of its GATS commitments.  WT/REG359/1 
 
- 31 - 
 
  Table 4.4 Korea: comparison between GATS and Agreement specific commitments 
Sectors / Sub-sectors GATS  FTA 
Compared 
to GATS Commitments on 
existing  
measures Commitments on  
future  
measures 
1. Business services     
A. Professional Services Partial  Improved Partial Partial 
B. Computer and Related Services  Full Similar Full Full 
C. Research and Development Services  Partial  Improved Partial Partial 
D. Real Estate Services  --- New Partial Partial 
E. Rental/Leasing Services without Operators  Partial  Improved*  Partial Full 
F. Other Business Services Partial  Improved Partial Partial 
2. Communication services      
A. Postal services --- New Full Partial 
B. Courier services --- New Partial Full 
C. Telecommunication services  Partial  Improved Partial Partial 
D. Audiovisual services Partial  Similar Partial Partial 
3. Construction and related engineering services      
A. General construction work for buildings Partial  Improved Partial Partial 
B. General construction work for civil Engineering Partial  Improved Partial Partial 
C. Installation and assembly work  Partial  Improved Partial Partial 
D. Building completion and finishing work  Partial  Improved Partial Partial 
E. Other Partial  Improved Partial Partial 
4. Distribution services     
A. Commission agents' services Partial  Improved*  Partial Partial 
B. Wholesale trade services Partial  Improved*  Partial Partial 
C. Retailing services Partial  Improved*  Partial Partial 
D. Franchising Partial  Improved Full Full 
5. Education services     
A. Primary education services --- New Full Partial 
B. Secondary education services  --- New Full Partial 
C. Higher education services  --- New Partial Partial 
D. Adult education --- New Partial Partial 
E. Other education services  --- New Partial Partial 
6. Environmental services     
A. Sewage services Partial  Improved*  Partial Partial 
B. Refuse disposal services Partial  Improved*  Partial Partial 
C. Sanitation and similar services  --- Improved Partial Partial 
D. Other Partial  Improved*  Partial Partial 
7. Financial services     
A. All insurance and insurance-related services  Partial  Improved Full Partial 
B. Banking and other financial services Partial  Improved Full Partial 
8. Health related and social services     
A. Hospital services --- Similar --- --- 
B. Other Human Health Services --- Similar --- --- 
C. Social Services --- Similar --- --- 
D. Other --- Similar --- --- 
9. Tourism and travel related services      
A. Hotels and restaurants (including catering) Partial  Improved Full Partial 
B. Travel agencies and tour operators services Partial  Improved Full Partial 
C. Tourist guides services Partial  Improved Full Partial 
10. Recreational and cultural and sporting services     
A. Entertainment services --- New Partial Partial 
B. News agency services --- New Partial Partial 
C. Libraries, archives, museums and other cultural services  --- New Partial Full 
D. Sporting and other recreational services  --- New Partial Partial 
11. Transport services      
A. Maritime Transport Services Partial  Improved*  Partial Partial 
B. Internal Waterways Transport --- New Full Partial 
C. Air Transport Services Partial  Improved*  Partial Partial 
D. Space Transport  --- New Full Partial 
E. Rail Transport Services --- New Partial Partial 
F. Road Transport Services Partial  Improved Partial Partial 
G. Pipeline Transport  --- New Full Full 
H. Services auxiliary to all modes of transport  Partial  Improved*  Partial Partial 
I. Other Transport Services  Partial  Improved Full Partial 
General Note: MFN and Horizontal limitations, as well as Mode 4 commitments/limitations not considered. 
Partial:  Specific commitments subject to some limitati on(s) under market access or national treatment, under 
any of the three modes. 
Full: Specific commitments not subject to limitation(s) under market access or national treatment, under any 
of the three modes. WT/REG359/1 
 
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  ---: No specific commitment. 
New: New commitments under the Agreement (full or partial, with or without limitations) which can, in most 
but not all cases, be seen as "improved". 
Improved: Overall improved commitments made under the Agreement compared to those under the GATS. 
Similar: Similar commitments (Agreement vs GATS); though possibly, in individual cases, with limited 
improvements and/or limited  additional reservations. 
Limited: Some additional limitations (as compared to GATS commitments). 
*: Subject to the interpretation of Article XVII of the GATS. 
 
Source:  Draft Consolid ated GATS Schedule of Specific Commitme nts (S/DCS/W/KOR/Rev.1), prepared by the 
Secretariat (in 2003) and Korea's Schedules annexed to the Agreement.  
 
4.4.2.2.1  Business services 
4.47.  Through the negative listing, coverage under the Agreement is broadened as compared to 
Korea's commitments under the GATS. This is in particular the case for real estate services (unbound 
under the GATS), research and development servic es, professional services and other business 
services.41  
4.4.2.2.2  Communication services 
4.48.  Commitments are made for postal and courier services, unbound under the GATS, though with 
some limitations. Coverage on telecommunications is improved, while a number of restrictions on audiovisual (and broadcasting) services are maintained, as compared to the GATS. 
4.4.2.2.3  Construction and related engineering services 
4.49.  Korea lists an establishment requirement und er the Agreement for cross-border provision of 
construction services, but removes its GATS limitation on licensing and contract limits.  
4.4.2.2.4  Distribution services 
4.50.  Distribution services are subject to a numbe r of restrictions in Korea's GATS Schedule. Under 
the Agreement, the level of liberalization of this  sector is improved and more transparency is 
achieved.  
4.4.2.2.5  Educational services 
4.51.  Under the GATS the sector is unbound, while under the Agreement it is covered through the 
negative list approach, though there is a general limitation for future measures that may be taken in most of the education sub-sectors. Moreover, Korea maintains its right to adopt or maintain any 
measure with respect to public training. 
4.4.2.2.6  Environmental services 4.52.  Under the GATS, Korea has commitments, with some limitations, except for sanitation and 
similar services (reserved under the Agreement). Under the Agreement, Korea removes the restriction 
on the number of suppliers in sewage services as well as the economic needs test on disposal services (listed in Korea's GATS Schedule). However, futu re measures for treatment and supply of potable 
water; collection and treatment of municipal sewage; collection, transportation, and disposal of 
municipal refuse; sanitation and similar services; and nature and landscape protection services (except for environmental impact assessment services) are reserved. 
                                               
41 In relation to business services, Korea indicates that the establishment requirement (local presence) is 
not required to be listed under the GATS, and consequent ly was not committed by Korea in its GATS Schedule of 
Specific Commitments. The Agreement, however, includes an additional obligation for local presence (Article 7.5), 
as compared to the GATS. For that reason local pres ence requirements are registered as non-conforming 
measures. WT/REG359/1 
 
- 33 - 
 
  4.4.2.2.7  Financial services 
4.53.  Building upon its GATS commitments, Kore a's commitments under the Agreement provide that 
juridical persons supplying financial services and constituted under the laws of Korea are subject to non-discriminatory limitations on juridical form. However, Korea's commitments on national treatment 
and market access for financial institutions are subject to the limitation that, in order to establish or 
acquire a controlling interest in a financial institution in Korea, a foreign investor must own or control a financial institution that engages in supplying financial services within the same financial services subsector in its home country. Further limitations are in Annex III for certain aspects of insurance as 
well as banking and other financial institution activities. 
4.4.2.2.8  Health relate d and social services 
4.54.  The whole sector is unbound under the GATS. Under the Agreement, Korea maintains its right 
to adopt or maintain any measure with respect to social services established or maintained for public 
purposes, including income security or insurance; social security or insurance; social welfare; health; and child care. Korea also reserves the right to adopt or maintain any measure regarding human 
health services. 
4.4.2.2.9  Tourism and travel related services 4.55.  The sector is largely covered under the GATS. Under the Agreement, Korea further improves its 
commitments, in particular in relation to market access. 
4.4.2.2.10  Recreational, cult ural and sporting services 
4.56.  The whole sector, unbound under the GATS, is now covered, with some limitations to cover 
both existing and possible future restrictive measures. 
4.4.2.2.11  Transport services 
4.57.  While only partial commitments are made in the GATS, it is now fully covered under the 
Agreement, which constitutes a change in particular for internal waterways transport, space transport, 
rail transport services, and pipeline transport. Korea nevertheless maintains its right to adopt or 
maintain any measure with respect to public transport. 
4.5  Regulatory provisions  4.5.1  Domestic regulation 
4.58.  Article 7.7 replicates the disciplines relati ng to qualification requirements, and procedures, 
technical standards and licensing requirements contained in Articles VI.3 and VI.4 of the GATS. It also binds the Parties to amend Article 7.7 to bring the results of the negotiations related to Article VI.4 of 
GATS into effect under the Agreement, as appropriat e. A Party shall also permit service suppliers of 
the other Party to use the enterprise names under which they trade in the territory of the other Party and otherwise ensure that the use of the enterprise names is not unduly restricted. 
4.5.2  Recognition 
4.59.  Under Article 7.9, the Agreement mirrors the provisions in paragraphs 1 through 3 of Article VII 
of the GATS. It also includes some transparency requirements. 
4.60.  For some professional services, the Partie s commit to ensure more transparency concerning 
standards and criteria for the licensing and certification of professional service suppliers, including 
information concerning the appropriate regulatory or  other body to consult regarding these standards 
and criteria. Moreover, each Party shall encourage the relevant bodies in its territory to develop 
mutually acceptable standards and criteria for licensing and certification. A Working Group on 
Professional Services is established to facilitate these activities.  
 WT/REG359/1 
 
- 34 - 
 
  4.5.3  Subsidies 
4.61.  Chapter 7 does not apply to subsidies or grants provided by a Party, including government-
supported loans, guarantees and insurance.  
4.5.4  Safeguards 
4.62.  The Agreement contains no provisions on safeguards in services.  
4.5.5  Other 4.5.5.1  Investment 4.63.  Investment is specifically addressed in Chapter 11. It applies to measures by a Party relating to 
investors of the other Party; covered investment; and, in relation to performance requirements, all 
investments in the territory of the Party.  
4.64.  In the event of any inconsistency between Chapter 11 (investment) and another Chapter 
(including Chapter 7), the other Chapter shall prevai l to the extent of the inconsistency. Chapter 11 
does not apply to measures by a party to the extent that they are covered by Chapter 8 (Financial services). 
4.65.  In addition to the above-mentioned prov isions on national treatment; MFN treatment; 
performance requirements; senior management and boards of directors; and their related non-conforming measures; denial of benefits; Chapter 11 contains disciplines on minimum standards of treatment, which foresees that covered investments shall be accorded fair and equitable treatment 
as well as full protection and security (Article 11. 5). Moreover, national treatment shall, with some 
reservations, be granted for investment losses and related compensations (Article 11.6). Expropriation
42 or nationalization is not permitted unless on a non-discriminatory basis, for a public 
purpose, in accordance with due process of law and compliance with minimum standards of 
treatment, and upon payment of prompt, adequa te and effective compensation (Article 11.7). 
Chapter 11 also contains provisions on special formalities and information requirements 
(Article 11.13), as well as on subrogation (Article 11.14).  
4.66.  Section B of Chapter 11 establishes an in vestor-State dispute settlement mechanism which is 
summarized below.43  
4.5.5.2  Electronic Commerce 
4.67.  Under Article 15.2, the Parties affirm that measures affecting the supply of a service delivered 
or performed electronically are subject to the oblig ations in the relevant provisions of Chapters 7 
(cross-border trade in services); 8 (financial servic es); and 11 (investment), subject to exceptions or 
non-conforming measures that are applicable to such obligations. Moreover, a number of provisions 
that are specific to electronic commerce are in Chapter 15 and are summarized below under section 5 (General provisions of the Agreement). 
4.6  Sector specific provisions on trade in services 
4.6.1   Audiovisual co-production 4.68.  The Parties in Annex 7-B agree on specific mo dalities for audiovisual co-production (in relation 
to Article 7.12).  
4.69.  Competent authorities shall be designated by each Party to implement the Annex. 
Arrangements are made in the Memorandum of Understanding on the Implementation of the 
Annex on Audiovisual Co-Production to assist the authorities in granting provisional or final approval 
to audiovisual works. Annex 7-B also contains provisions on co-producer status; third-country 
co-productions; entitlement to benefits; import of equipment; immigration facilitation; contributions 
                                               
42 The Parties' shared understanding on expropriation is contained in Annex 11-B. 
43 See the section on dispute settlement. WT/REG359/1 
 
- 35 - 
 
  for an audiovisual co-production; location filming; participation of individuals in co-productions; 
footage; making up to first-release print; acknowledgments and credits; taxation; and balance 
between the parties to the co-production. An ad hoc Committee may be requested by a Party to discuss any matter related to the implementation of the Annex. A simple mechanism is set in 
Article 17 to resolve disputes under the Annex. The dispute settlement mechanism established under 
the Agreement (Chapter 20) is therefore not availa ble. A review of the operation of Annex 7-B is 
foreseen as required. 
4.70.  Nothing in the Annex shall be used to construe any other provision in the Agreement. No 
provision elsewhere in the Agreement shall be used to construe any provision in the Annex. To the 
extent of any inconsistency between the Annex on audiovisual co-production and any other provision in the Agreement, the Annex shall prevail to th e extent of the inconsistency. The termination 
provisions of the Agreement (Article 23.4) do not apply to Annex 7-B, as the Annex shall remain in 
force initially for a period of up to three years fr om the date of entry into force of the Agreement. 
Either Party may terminate Annex 7-B by written notice 180 days before the end of that period. The 
Annex shall then terminate at the end of the three years. If this is not done, the Annex shall 
automatically remain in force for successive periods, each of three years, unless written notice to terminate it is given during such periods. The Annex is separable, and its termination shall not affect the continued operation of the Agreement. 
4.6.2  Financial services 
4.71.  Chapter 8 applies to measures by the Parties relating to financial institutions of the other Party; 
investors of the other Party, and their investments, in financial institutions in the Party's territory; and 
cross-border trade in financial services. Chapter 8 refers to certain provisions in Chapter 7 with 
respect to cross-border trade in services
44 as well as to disciplines included in Chapter 11 on 
investment.45 Chapter 8 does not apply to measures by a Party relating to activities or services 
forming part of a public retirement plan or statutory system of social security; or activities or services 
conducted for the account or with the guarantee or using the financial resources of the Party, 
including its public entities, with some limitations. Government procurement is also excluded from the scope of application of Chapter 8. 
4.72.  Under Article 8.5, each Party shall permit persons located in its territory, and its nationals, 
wherever located, to purchase financial services fr om cross-border financial service suppliers of the 
other Party located in the territory of the other Party. This obligation does not require a Party to 
permit such suppliers to do business or solicit in its territory. A Party may require the registration or 
authorization of cross-border financial service suppliers of the other Party and of financial instruments. 
4.73.  Measures for prudential reasons may be adopted or maintained (Article 8.10). Chapter 8 also 
contains disciplines on self-regulatory organizations; payment and clearing systems; and recognition of a non-Party's prudential measures.  
4.74.  In Annex 8-B, the Parties make specific commitments for the transfer of information; 
performance of functions by financial institutions; supervisory cooperation; the exclusion of certain 
Government entities, which shall not be considered financial institutions; cross-border trade-related information requirements; residency requirement for chief executive officers of financial institution; 
the provision of investment advice or portfolio management services; and specific requirements for 
government procurement for certain services. 
4.75.  A Committee on financial services is established, inter alia , to supervise the implementation of 
chapter 8 and its further elaboration (Article 8.16 ). Consultations are also foreseen between the 
Parties on any matter arising under the Agreement that affects financial services 8 (Article 8.17). 
                                               
44 Chapter 8 incorporates Articles 7.11 (denial of benefi ts), and 7.10 (payments and transfers) to the extent 
that cross-border trade in financial services is subject to obligations under Article 8.5. 
45 Chapter 8 incorporates Articles 11.7 (expropriation  and compensation); 11.8 (transfers); 11.11 (denial of 
benefits); and 11.3 (special formalities and information requirements). Moreover, Section B (ISDS) of Chapter 11 
is also incorporated into Chapter 8 solely for claims th at a Party has breached Articles 11.7 (expropriation and 
compensation); 11.8, 11.11, or 11.13. WT/REG359/1 
 
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  4.6.3  Telecommunication Services 
4.76.  Chapter 9 applies to measures by the Parties affecting trade in telecommunication services. It 
shall however not apply to any measure relating to broadcast or cable distribution of radio or television programming. In the event of any inconsistency between Chapter 9 and another chapter, 
Chapter 9 shall prevail to the extent of the inconsistency. 
4.77.  Chapter 9 contains provisions on access to and use of public telecommunications networks or 
services; obligations relating to suppliers of public telecommunications networks or services
46; as well 
as additional obligations relating to major suppliers of public telecommunications networks or 
services.47 It also contains specific disciplines on subm arine cable systems, conditions for the supply 
of value-added services, independent regulatory bodies, universal service, licensing process, 
allocation and use of scarce telecommunications resources, enforcement, resolution of disputes, 
transparency, measures concerning technologies and standards, consultation with the industry, and 
relation to international organizations on standards development. The disciplines of Chapter 9 replicate, and sometimes build on, some of the WTO rules in the Annex on telecommunications as well 
as in the 1996 Reference Paper. 
4.78.  A Committee on telecommunications is estab lished to review and monitor the implementation 
and operation of Chapter 9 and to discuss issues related to it as well as other issues relevant to the telecommunications sectors of the Parties (Article 9.25). 
5  GENERAL PROVISIONS OF THE AGREEMENT 
5.1  Transparency 5.1.  Chapter 19 contains general transparency disciplines. Articles 19.1 through 19.4 list 
requirements on publication; provision of inform ation; administrative proceedings; and review and 
appeal. 
5.2.  Further to Chapter 19, the Agreement also es tablishes specific transparency requirements in 
Articles 4.2 (customs administration and trade fa cilitation); 5.8 (technical barriers to trade); 
13.1 (paragraph 12: intellectual property rights); 7.8 (transparency in developing and applying regulations on cross-border trade in services); 8.11  (financial services); 9.21 (telecommunications); 
10.7 (movement of natural persons); and 11.21 (transpa rency of arbitral proceedings in relation to 
the investor-State dispute settlement). 
5.3.  Article 22.4 states that nothing in the Agreem ent shall be construed to require a Party to furnish 
or allow access to confidential information, the disclosure of which would impede law enforcement or 
otherwise be contrary to the public interest or which would prejudice the legitimate commercial 
interests of particular enterprises, public or private. This provision is complemented by confidentiality requirements (Article 22.5). In relation to cross-bo rder trade in services, there are disciplines on the 
treatment of certain information (Article 8.7). 
5.4.  Moreover, the Parties shall establish a number of enquiry points (on customs matters) and 
contact points (on SPS measures; cooperation in the fields of agriculture, fisheries and forestry; cooperation in the fields of energy and minera l resources; labour; environment; and dispute 
settlement), as well as TBT coordinators.  
5.2  Current payments and capital movements 5.5.  Articles 7.10 and 11.8 foresee that each Part y shall permit all transfers relating to the cross-
border supply of services or a covered investment freely and without delay into and out of its 
territory. Such transfer could be made in a freely usable currency at the market rate of exchange prevailing at the time of transfer.  
                                               
46 Including on interconnection, number  portability, and dialling parity. 
47 Including treatment by major suppliers, competitiv e safeguards, resale, unbundl ing of network elements, 
interconnection, provisioning and pricing of leased circuit services, co-location, and access to telecommunications 
facilities. The obligations relating to suppliers are subject to Annex 9-A, and the obligations relating to major suppliers are subject to Annex 9-B. WT/REG359/1 
 
- 37 - 
 
  5.6.  For cross-border trade in services, a Party may prevent or delay a payment or transfer in certain 
circumstances and under certain conditions (paragraph 3 of Article 7.10). 
5.7.  In relation to investment, returns in kind relating to a covered investment shall be, in principle, 
authorized. Transfers48 and returns in kind may, however be delayed or prevented in certain 
circumstances and under certain conditions (paragraph 4 of Article 11.8).  
5.3  Exceptions 5.8.  Exceptions are contained in Articles 22.1 and 22.2. In addition, Article 8.10 contains exceptions 
applicable to financial services, in particular in relation to measures maintained or introduced for 
prudential reasons. 
5.3.1  General exceptions 5.9.  With respect to trade in goods
49, Article XX of GATT 1994, including its interpretive notes, is 
incorporated into and made part of the Agreement, mutatis mutandis  (Article 22.1). With respect to 
trade in services50, Article XIV of GATS, including its footnotes, is incorporated into and made part of 
the Agreement, mutatis mutandis  (Article 22.1). Moreover, the principles and substantive provisions 
in Article XIV of GATS are replicated in paragraph 3 of Article 22.1 and made applicable to the 
provisions of the Agreement covering investme nt (Chapter 11). Furthermore, nothing in the 
Agreement shall prevent a Party from taking actions authorized by the Dispute Settlement Body of the 
WTO. 
5.3.2  Security exceptions 
5.10.  Article 22.2 replicates the provisions in Article XXI of GATT 1994 and in Article XIV bis of GATS 
for measures related to security. Moreover, if a Party invokes Article 22.2 (essential security) in an 
arbitral proceeding under Section B of Chapter 11  (investment - ISDS), the tribunal hearing the 
matter shall apply the exception. Measures taken or terminated by a Party under Article 22.2 shall, to the extent possible, be notified to the Joint Committee.  
5.3.3  Taxation 
5.11.  As a principle, nothing in the Agreement shall apply to taxation measures. However, 
Article 22.3 lists provisions
51 for which that principle is not applicable and the limitations to its 
applicability.  
5.12.  Nothing in the Agreement shall affect the rights and obligations of either Party under any tax 
convention. In the event of any inconsistency relating to a taxation measure, the tax convention shall prevail to the extent of the inconsistency. 
5.4  Accession and Withdrawal 
5.13.  The Agreement does not contain any accession provisions. Termination is, however, governed 
by Article 23.4. The termination provision does not cover Annex 7-B on Audiovisual co-production. 
 
                                               
48 Annex 11-C clarifies that nothing in the Agreement shall be construed to prevent a Party from adopting or 
maintaining temporary safeguard measures in accordance with the laws and regulations of the party with regard to 
payments and capital movement. 
49 For the purposes of Chapters 2 (trade in goods); 3 (rules of origin and origin procedures); 4 (customs 
administration and trade facilitation); 5 (TBT and SPS); and 16 (Cooperation). 
50 For the purposes of Chapters 7 (cross-border trade in services); 9 (telecommunications); 10 (movement 
of natural persons), and 15 (electronic commerce). The co verage of Chapter 15 is wi thout prejudice to whether 
electronic transmissions should be characterised as goods or services. 
51 Chapter 2 (trade in goods); Articles  7,2 and 8.2 (national treatment for cross-border trade in services and 
financial services); Articles 7.3 an d 8.3 (MFN for cross-border trade in  services and financial services); 
Articles 11.3 and 11.4 (national treatment and MFN for in vestment); and Articles 11.9.2 and 11.9.9 (performance 
requirements for investment). WT/REG359/1 
 
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  5.5   Institutional framework 
5.14.  A Joint Committee is established, inter alia , to supervise the implemen tation of the Agreement 
(Article 21.3). Ad hoc and standing committees and working groups are also established and may be delegated responsibilities by the Joint Committee. Annex 21-A to the Agreement lists the committees 
and working groups established under the Agreemen t. All decisions of the Joint Committee and all 
committees, working groups and other bodies established under the Agreement shall be made by mutual consent of the Parties. 
5.15.  Each Party shall designate a contact point or  points to facilitate communications between the 
Parties. These contact points shall cover any matter arising under the Agreement, except those for 
which specific contact points or coordinators are designated under Chapters other than Chapter 21. 
5.16.  The institutional framework established by th e Agreement is summarized by Chart 5.1 below.  
Chart 5.1 Institutional Framework  
 
5.6  Dispute settlement 
5.17.  Chapter 20 governs dispute settlement for matters covered under the Agreement, with the 
exception of Chapters 5 (TBT and SPS); 14 (competi tion policy); 17 (labour); 18 (environment), and, 
in most cases, 10 (movement of natural persons). Specific provisions on the establishment of panels 
and on non-implementation in relation to disputes arising under Chapter 8 (financial services) are contained in Article 8.18.  
5.18.  Recourse to the dispute settlement mechanis m established by Chapter 20 is without prejudice 
to any action in the WTO framework, including dispute settlement actions. The Agreement provides for the choice of the dispute settlement forum. Howe ver, when a dispute has been initiated, either Source: WTO Secretariat based on the Agreement. 
 Joint Committee  
(Art. 21.3) 
Committee on Trade in Goods 
(Art. 2.11) 
Ad hoc  Working Group on TBT 
(Art. 5.9.4) Committee on Outward Processing Zones on 
the Korean Peninsula 
(Annex 3-B) 
Committee on Rules of Origin and Trade 
Facilitation 
(Art. 4.12) 
Committee on Financial Services 
(Art. 8.16) 
Committee on Telecommunications 
(Art. 9.25) 
Committee on Intellectual Property 
(Art. 13.12 ) 
Committee on Agricultural Cooperation 
(Art. 16.11 ) 
Committee on Energy and Mineral Resources 
Cooperation 
(Art. 16.19) Committee on Labour 
(Art. 17.3.2) 
Committee on Environment 
(Art. 18.6.2) 
Working Group on Professional Services 
(Para. 3 of Annex 7-A) 
Ad hoc  Working Group on Audiovisual 
Co-production 
(Art. 16 of Annex 7-B ) WT/REG359/1 
 
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  under the WTO or under the Agreement, the same measure may not be invoked under the other 
forum. Nevertheless, a Party may initiate a dispute in  the other forum if the first forum selected fails 
for procedural or jurisdictional reasons to make findings on the claim. 
5.19.  The Parties endeavour to agree on the interp retation and application of the Agreement through 
cooperation (Article 20.1) and/or consultations with the aim of reaching a mutually agreed solution 
(Article 20.6). If the Parties fail to resolve a matter, it may be referred to the Joint Committee 
established under Article 21.3. 
5.20.  Under Articles 20.8 through 20.15, the Agreement establishes the disciplines and procedural 
steps, mainly modelled on the WTO dispute settlement modalities, that are applicable to the 
establishment of panels52; the functions of panels; the rules of procedures53; the panel report; the 
suspension and termination of proceedings;  the implementation of the final report; 
non-implementation; and compliance review.  
5.21.  According to Article 20.16, neither Party shall provide for a right of action under its law against 
the other Party on the ground that a measure of the other Party is inconsistent with the Agreement. 
In principle, the expenses of a panel, including the remuneration of the panellists, shall be borne 
equally by the Parties (Article 20.17). 
5.22.  Chart 5.2 below summarizes the main steps of the dispute settlement mechanism established 
by the Agreement. 
Chart 5.2 Specific Dispute Settlement Me chanism established by the Agreement 
 
 
                                               
52 Including the code of conduct applicable  to panellists contained in Annex 20-A. 
53 Following the model rules of procedures set out in Annex 20-B to the Agreement. An indicative timetable 
for a dispute settlement pa nel is contained in an Attachment to Annex 20-B. Source: WTO Secretariat based on the Agreement. 
 Consultations (Art. 20.6 ) 
Establishment of a Panel  
(Art. 20.8) 
(Annex 20-A) 
Proceedings (Art. 20.10 
and Annex 20-B ) 
Panel Report  
(Art. 20.11) 
(Temporary) suspension of 
benefits by complaining Party 
(Art. 20.14) Compliance review 
(Art. 20.15 ) Notification by the Party 
complained against of the 
intention and measure to 
comply (Art. 20.13) Cooperation (Art. 20.1 ) 
Referral to the Joint 
Committee (Art. 20.7) 
Ruling by the Panel on the level of compensation or 
of the suspension (Art. 20.14) Non-implementation  
(Art. 20.14) 
Compensation agreed 
between the Parties  
(Art. 20.14) WT/REG359/1 
 
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  5.23.  In the event of an investment dispute, an  investor-State dispute settlement mechanism (ISDS) 
is established in Section B of Chapter 11 (inves tment). Articles 11.15 through 11.27 govern the 
proceedings of the ISDS and cover consultations and negotiations; submission of a claim to arbitration; consent of each party to arbitration; conditions and limitations on consent of each Party
54; 
selection of arbitrators; conduct of the arbitration;  transparency of arbitral proceedings; governing 
law; interpretation of Annexes I and II to the Ag reement (listing non-conforming measures); expert 
reports; consolidation orders; awards by a tribunal55; and service of documents. Specific provisions 
governing the submission of a claim to arbitration by an investor of a Party (under the ISDS of 
Chapter 11), in relation to disputes in financial services, are contained in Article 8.19. 
5.7  Relationship with other agreements concluded by the Parties 5.24.  Article 1.1 states that the Agreement is co nsistent with Article XXIV of GATT 1994 and Article V 
of GATS. The Parties also affirm their existing rights and obligations with respect to each other under 
existing bilateral and multilateral agreements to which both are a party, including the WTO Agreement (Article 1.2).  
5.25.  The Agreement shall not be construed to derogate from any international legal obligation 
between the Parties that provides for more favourab le treatment of goods, services, investments, or 
persons than provided for under the Agreement. In  the event of inconsistency between the Agreement 
and other agreements to which both Parties are a party, consultations are foreseen between the 
Parties to find a mutually satisfactory solution. 
5.26.  Table 5.1 below shows the Parties' RTAs, noti fied and non-notified, other than the Agreement. 
Table 5.1 Australia and Republic of Korea: Participation in other RTAs (notified and 
non-notified in force), as of 6 November 2015 
RTA Name Date of 
entry into 
force Coverage GATT/WTO Notification 
Year WTO Provision 
AUSTRALIA 
Japan - Australia 15-Jan-15 Goods & Services 2015 GATT Art. XXIV & GATS Art. V 
Malaysia - Australia 01-Jan-13 Goods & Services 2013 GATT Art. XXIV & GATS Art. V 
ASEAN - Australia - New 
Zealand 01-Jan-10 Goods & Services 2010 GATT Art. XXIV & GATS Art. V 
Australia - Chile 06-Mar-09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
Thailand - Australia 01-Jan-05 Goods & Services 2004 GATT Art. XXIV & GATS Art. V 
United States - Australia 01-Jan-05 Goods & Services 2004 GATT Art. XXIV & GATS Art. V 
Singapore - Australia 28-Jul-03 Goods & Services 2003 GATT Art. XXIV & GATS Art. V 
Australia - New Zealand 
(ANZCERTA) 01-Jan-83 
01-Jan-89 Goods 
Services 1983 
1995 GATT Art. XXIV 
GATS Art. V 
South Pacific Regional 
Trade and Economic 
Cooperation Agreement 
(SPARTECA) 01-Jan-81 Goods 1981 Enabling Clause 
Australia - Papua New Guinea (PATCRA) 01-Feb-77 Goods 1976 GATT Art. XXIV 
REPUBLIC OF KOREA 
Canada - Republic of 
Korea 01-Jan-15 Goods & Services 2015 GATT Art. XXIV & GATS Art. V 
Republic of Korea - Turkey 01-May-13 Goods 2013 GATT Art. XXIV 
Republic of Korea - United 
States 15-Mar-12 Goods & Services 2012 GATT Art. XXIV & GATS Art. V 
Peru - Republic of Korea 01-Aug-11 Goods & Services 2011 GATT Art. XXIV & GATS Art. V 
                                               
54 Annex 11-F registers a limitation by Korea with respec t to a submission by an investor of Australia under 
Section B. Annex 11-G limits the coverage of the dispute settlement provision of Section B. 
55 Within three years after the date of entry into forc e of the Agreement, the Parties shall consider whether 
to establish a bilateral appellate body or similar mechanism to review awards rendered under Article 11.26 in arbitrations commenced after they establish the appellate body or similar mechanism. WT/REG359/1 
 
- 41 - 
 
  RTA Name Date of 
entry into 
force Coverage GATT/WTO Notification 
Year WTO Provision 
European Union - Republic 
of Korea 01-Jul-11 Goods & Services 2011 GATT Art. XXIV & GATS Art. V 
ASEAN - Republic of Korea 01-Jan-10 
01-May-09 Goods & Services 2010 Enabling Clause, GATT Art. 
XXIV & GATS Art. V 
Republic of Korea - India 01-Jan-10 Goods & Services 2010 Enabling Clause, GATT Art. 
XXIV & 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 
Asia Pacific Trade 
Agreement (APTA) - 
Accession of China 01-Jan-02 Goods 2004 Enabling Clause 
Global System of Trade 
Preferences among 
Developing Countries 
(GSTP) 19-Apr-89 Goods 1989 Enabling Clause 
Asia Pacific Trade 
Agreement (APTA) 17-Jun-76 Goods 1976 Enabling Clause 
Protocol on Trade 
Negotiations (PTN) 11-Feb-73 Goods 1971 Enabling Clause 
Source: WTO Secretariat. 
 
5.8  Government procurement 
5.27.  Chapter 12 of the Agreement (Articles 12.1 through 12.17) contains rules applicable to 
government procurement and cover both goods and services. The Parties' commitments cover 
procuring entities at the central level of Government and, in Australia's case, States and territories, and, in Korea's case, certain regional Governments. Non-covered procurements are listed under Article 12.1 (paragraph 3). The Parties' commitments are made subject to the conditions specified in 
Annex 12-A, which sets out the specific entities bound by the Parties' commitments and thresholds 
that must be met before procurement can be covered by the disciplines in Chapter 12.  
5.28.  Mutual access to public procurement markets on the basis of the principle of national treatment 
and non-discrimination shall be granted under the Agreement. Exceptions cover, inter alia , measures 
necessary to protect public morals, order or safety; human, animal or plant life or health; or intellectual property; as well as measures relating  to goods or services of handicapped persons, of 
philanthropic or not-for-profit institutions, or prison labour. An essential security exception is also 
included in the Agreement (Article 12.2). Chapter 12 prohibits offsets, and determines the rules applicable to the determination of the origin of the covered procurements of goods or services. The 
Agreement disciplines procurement and tendering pr ocedures, including transparency (Articles 12.3 
through 12.15).  
5.29.  Korea is a party to the plurilateral WTO Government Procurement Agreement (GPA) since 1997 
and has not ratified the revised GPA. Australia is an observer, but not a party, to the GPA and is 
currently negotiating its accession to it. This means that, in relation to Australia's commitments under 
the Agreement, Chapter 12 and Australia's related commitments constitute a strengthening of the 
legal environment in favour of Korean exports (for  both goods and services), as compared to the 
prevailing situation under the WTO rules. Korea' s commitments made under the Agreement build on 
its commitments under the GPA. Korea also maintain s, under the Agreement, the same thresholds as 
under the GPA for all types of procuring entities as well as for procurement of construction services. 
Though Australia is not a signatory to the GPA, the thresholds contained in its commitments mirror 
those of the GPA, with, however, two exceptio ns. For procurement of goods and services by 
sub-central government entities, the threshold is set at 130,000 SDRs
56 (as compared to 200,000 
SDRs under the GPA), while for procurement of construction services by sub-central government 
                                               
56 Special Drawing Rights. WT/REG359/1 
 
- 42 - 
 
  entities, the threshold is set at 5,000,000 SDRs (15,000,000 SDRs under the GPA). Rectifications and 
modifications to coverage are governed by Article 12.16. 
5.9  Intellectual property rights 5.30.  Chapter 13 covers intellectual property rights. The Parties reaffirm their rights and obligations 
under the TRIPS Agreement, the agreements admini stered by the WIPO and any other multilateral 
agreement related to intellectual property to which the Parties are a party.
57 The Parties commit to 
grant national treatment for the protection of intellectual property except in accordance with the corresponding substantive provisions in multilateral intellectual property agreements to which either 
Party is a contracting party. Additional derogations to national treatment are also indicated in 
paragraphs 7 and 8 of Article 13.1.  
5.31.  The Agreement builds on TRIPS provisions fo r the protection of trademarks (Article 13.2); 
copyrights and related rights (Articles 13.5 through 13.7); and patents (Article 13.8). The Agreement 
also identifies areas of cooperation between the Parties (Article 13.3) and establishes disciplines in relation to domain names on the internet, including in connection with the settlement of disputes 
(Article 13.4). 
5.32.  In relation to certain public health measures, the Agreement refers to the 2001 WTO 
Declaration on the TRIPS Agreement and Public Health  (Doha Declaration) and the Parties agree to 
respect the Decision of the WTO General Council ( 2003) on paragraph 6 of the Doha Declaration, as 
well as the Protocol amending the TRIPS Agreement  (2005). 
5.33.  Article 13.9 addresses enforcement of intellectual property rights. It establishes modalities 
applicable to civil and administrative procedures and remedies and contains disciplines on alternative 
dispute resolution; provisional measures; special requirements for border measures; as well as 
criminal procedures and remedies. Each Party also agrees to provide measures to curtail repeated copyright and related right infringement on the Inte rnet. In that context, and in accordance with 
Article 41 of the TRIPS Agreement, the Parties agr ee to provide limitations on liability for online 
service providers and legal incentives to cooperat e in deterring the storage and transmission of 
copyrighted materials.  
5.34.  While the provisions of Chapter 13 shall be gi ven effect by Australia immediately on the date of 
entry into force of the Agreement, Korea shall full y implement the obligations related to the term of 
protection for copyrights and related rights within two years of the date of entry into force of the Agreement (Article 13.11). 
5.35.  A Committee on Intellectual Property is established in Article 13.12, inter alia , to review, 
monitor and assesses the implementation of Chapter 13. 
5.10  Other 
5.10.1  Electronic commerce 
5.36.  As above mentioned, the Parties affirm, in Chapter 15 on electronic commerce, the applicability 
of the obligations contained in the relevant provisions of Chapters 7 (Cross—Border Trade in Services), 8 (Financial Services) and 11 (Investment) to electronic commerce. 
5.37.  Chapter 15 also specifies that neither Party shall impose customs duties on electronic 
transmissions between the Parties (Article 15.3). Moreover, each Party shall adopt or maintain measures regulating electronic commerce taking into account the UNCITRAL Model Law on Electronic 
Commerce  and, as appropriate, other international standards, guidelines and recommendations.
58 
Chapter 15 also contain disciplines and/or commitmen ts on electronic authentication and electronic 
signatures (Article 15.5); online consumer protection (Article 15.6); paperless trading (Article 15.7); 
                                               
57 The Parties also agree to undertake  reasonable efforts to ratify or accede to the Patent Law Treaty 
(2000), and the Singapore Treaty on the Law of Trademarks (2006), in a manner consistent with its law and 
subject to the fulfilment of its necessary internal requirements. 
58 Regulatory burden on electronic commerce shall be minimized and measures regulating electronic 
commerce shall support industry-led development of electronic commerce. WT/REG359/1 
 
- 43 - 
 
  online personal data protection (Article 15.8); and unsolicited commercial electronic messages 
(Article 15.9). 
5.10.2  Competition  5.38.  In Chapter 14 on competition policy, the Parties agree to promote competition by addressing 
anticompetitive practices in their respective territories, including by maintaining competition laws, and 
adopting and enforcing such measures as deemed appropriate and effective to counter such practices. They shall maintain authorities responsible for the enforcement of their competition laws (Article 14.2). The application of their competition laws shall be consistent with the principles of 
transparency, timeliness, non-discrimination, comprehensiveness and procedural fairness 
(Article 14.3). The Parties also recognise the importance of ensuring that Governments at all levels in their territories do not provide any competitive advantage to any state enterprise in its business 
activities as a result of it being a state enterprise
59 (Article 14.4). Chapter 14 also provides a 
framework for the Parties to cooperate, notify and consult on competition-related matters (Articles 14.5 through 14.7). The Parties shall also promote cooperation and coordination on matters 
related to consumer protection, including the enforcement of their consumer protection laws (Article 
14.8). The dispute settlement mechanism established by the Agreement is not applicable to matters 
arising under Chapter 14. 
5.10.3  Labour 
5.39.  In Chapter 17, the Parties affirm their obligations as members of the International Labour 
Organization (ILO). They shall respect each other's right to establish its own policies and national priorities and to adopt and administer its own labour laws, regulations and practices in accordance 
with those policies and priorities. Contact Points are established for labour matters to facilitate 
communication between the Parties (Article 17.3). Moreover, an ad hoc  Committee may be 
established, upon request, to discuss any matter related to Chapter 17. Consultations on labour 
matter may be requested by a Party to arrive at a mutually satisfactory resolution of the matter 
(Article 17.4). The dispute settlement mechanism es tablished under Chapter 20 of the Agreement is 
not applicable to any matter arising under Chapter 17.  Cooperation on trade-related aspects of labour 
policies is envisaged under Article 17.5.  
5.10.4  Environment 
5.40.  Chapter 18 contains disciplines on the environm ent. The right of each Party to establish its own 
levels of environmental protection and environmenta l development priorities, and to adopt or modify 
accordingly its environmental laws, regulations and policies is recognized.  
5.41.  The Parties shall continue to seek means to enhance the mutual supportiveness of multilateral 
environmental agreements and international trade ag reements to which they are both a party. They 
shall consult, as appropriate, with respect to nego tiations on trade-related environmental issues of 
mutual interest.  
5.42.  Neither Party shall fail to enforce its environmental laws, regulations and policies in a manner 
affecting trade or investment between them. They sh all endeavour to facilitate and promote trade and 
investment in environmental goods and services, including by addressing related non-tariff barriers. 
Contact points are established and areas of cooperation on trade-related aspects of environmental policies identified. An ad-hoc Committee can also be established or consultations held in the event of 
any concern of a Party about the implementation of Chapter 18. However, the dispute settlement 
mechanism established under the Agreement is not applicable to matters covered under Chapter 18. 
                                               
59 The application of this principle sh all not obstruct the performance of the particular public tasks assigned 
to them. WT/REG359/1 
 
- 44 - 
 
  ANNEX 1 
INDICATORS OF TRADE LIBERALIZATION UNDER THE AGREEMENT 
Australia 
1. Table A1.1 shows tariff liberalization by Australia in relation to Korea's imports (by total, 
agricultural and non-agricultural products). In 2014, Australia's average applied MFN rate was 
2.8% overall (3% for non-agricultural products and 1.3% for agricultural products). 47.6% of 
Australia's tariff was duty free on an MFN basis; 43.6% of non-agricultural products and 73% of 
agricultural products were duty free. At the ti me of entry into force of the Agreement (2014), 
Korea's exporters enjoyed an absolute margin of preference of 2.4% vis-à-vis  the prevailing MFN 
tariff; 2.6% for non-agricultural goods and 1.3% for agricultural products. The share of duty free lines applicable to imports from Korea immediatel y at the entry into force of the Agreement was 
90.9% (100% for agricultural products and 89.5 % for non-agricultural products). During the 
following years, this share will further increase to reach 100% in 2021, at the time Australia will have fully implemented its tariff elimination programme.  
Table A1.1 Australia: Indicators of MFN tari ff rates and preferential rates for imports 
from Korea, Republic of.  
Origin of 
goods Year ALL PRODUCTS Agricultural productsa Non-agricultural products  
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 2014 2.8 5.3 47.6 1.3 5.0 73.0 3.0 5.4 43.6 
Korea, 
Republic of 2014 0.4 4.0 90.9 0.0 0.0 100.0 0.4 4.0 89.5 
2015 0.3 3.0 90.9 0.0 0.0 100.0 0.3 3.0 89.5 
2016 0.2 2.4 92.8 0.0 0.0 100.0 0.2 2.4 91.7 
2017 0.1 1.3 92.8 0.0 0.0 100.0 0.1 1.3 91.7 
2018 0.0 4.3 99.5 0.0 0.0 100.0 0.0 4.3 99.4 
2019 0.0 2.9 99.5 0.0 0.0 100.0 0.0 2.9 99.4 
2020 0.0 1.4 99.5 0.0 0.0 100.0 0.0 1.4 99.4 
2021 0.0 0.0 100.0 0.0 0.0 100.0 0.0 0.0 100.0 
a WTO Definition. 
Based on the HS 2012 nomenclature. 
Source:  WTO estimates based on data from Australian authorities.  
 
2. Table A1.2 gives an indication of additional market access in Australia resulting from the 
entry into force of the Agreement for Korea's top 25 global exports, which accounted for 49.7% of 
its global exports in 2011-2013; these corresponded to 64 lines of Australia's tariff at the six-digit level (using the HS 2012). In 2014, prior to the en try into force of the Agreement, 37 of these 
tariff lines already had (MFN) duty free access to Australia's market. With the entry into force of 
the Agreement, in 2014, 16 of the 27 tariff lines, which were (MFN) dutiable, became duty free for exports from Korea. The 11 remaining dutiable tari ff lines became duty-free in 2016 (10 lines) and 
2018 (1 line).  WT/REG359/1 
 
- 45 - 
 
  Table A1.2 Australia: Market access opportunities under the agreement for Korea's top 
25 exports to the world 
Korea's top export products in 2011-2013 Access Conditions for Korean ex porters to Australia's market 
HS number and description of the product Share in 
global 
exports 
(%) MFN 2014 No. of duty 
free lines 
under the 
agreement 
Remain 
Dutiable Average 
MFN 
applied 
rate (%) No. of 
dutiable 
lines No. of 
duty 
free 
lines 
2014 
2016 
2018 
271019 Medium oils and preparations, of 
petroleum or bituminous minerals, not containing biodiesel, n.e.s. 6.2 0  12     
870323 Motor cars and other motor 
vehicles principally designed for 
the transport of persons, incl. 
station wagons and racing cars, 
with spark-ignition internal 
combustion reciprocating piston 
engine of a cylinder capacity > 
1.500 cm³ but <= 3.000 cm³ 
(excl. vehicles for the transport of 
persons on snow and other 
specially designed vehicles of 
subheading 8703.10) 4.9 5 4  2 2   
901380 Liquid crystal devices, n.e.s. and 
other optical appliances and 
instruments not elsewhere 
specified in chapter 90 4.8 0  1     
854231 Electronic integrated circuits as 
processors and controllers, 
whether or not combined with 
memories, converters, logic 
circuits, amplifiers, clock and 
timing circuits, or other circuits 3.6 0  1     
854232 Electronic integrated circuits as 
memories 3.5 0  1     
890190 Vessels for the transport of goods 
and vessels for the transport of 
both persons and goods (excl. 
refrigerated vessels, tankers, 
ferry-boats and vessels principally 
designed for the transport of 
persons) 3.2 2.5 1 1 1    
870899 Parts and accessories, for tractors, 
motor vehicles for the transport of 
ten or more persons, motor cars 
and other motor vehicles principally designed for the transport of persons, motor 
vehicles for the transport of goods 
and special purpose motor vehicles, n.e.s. 2.6 3.75 3 1  2 1  
851712 Telephones for cellular networ ks 
"mobile telephones" or for other 
wireless networks 2.4 0  1     
890120 Tankers 2.4 2.5 1 1 1    
890590 Light-vessels, fire-floats, floating 
cranes and other vessels, the 
navigability of which is subsidiary 
to their main function (excl. 
dredgers, floating or submersible 
drilling or production platforms; 
fishing vessels and warships) 1.9 2.5 1 1 1    
271012 Light oils and preparations, of 
petroleum or bituminous minerals which >= 90% by volume "incl. losses" distil at 210°C "ASTM D 86 
method" (excl. containing 
biodiesel) 1.7 0  5     WT/REG359/1 
 
- 46 - 
 
  Korea's top export products in 2011-2013 Access Conditions for Korean ex porters to Australia's market 
HS number and description of the product Share in 
global 
exports 
(%) MFN 2014 No. of duty 
free lines 
under the 
agreement 
Remain 
Dutiable Average 
MFN 
applied 
rate (%) No. of 
dutiable 
lines No. of 
duty 
free 
lines 
2014 
2016 
2018 
851770 Parts of telephone sets, telephones 
for cellular networks or for other 
wireless networks and of other 
apparatus for the transmission or 
reception of voice, images or other 
data, n.e.s. 1.6 2.5 1 1 1    
271020 Petroleum oils and oils obtained 
from bituminous minerals (other than crude) and preparations 
n.e.s. or included, containing by 
weight 70 % or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the 
preparations, containing biodiesel 
(excl. waste oils) 1.5 0  1     
852990 Parts suitable for use solely or 
principally with transmission and 
reception apparatus for radio-
broadcasting or television, 
television cameras,digital cameras, 
video camera recorders, radar 
apparatus, radio navigational aid 
apparatus or radio remote control 
apparatus, monitors and 
projectors, n.e.s. (excl. for aerials 
and aerial reflectors of all kinds) 1.4 2.5 2 2 2    
870332 Motor cars and other motor 
vehicles principally designed for 
the transport of persons, incl. station wagons and racing cars, with compression-ignition internal combustion piston engine "diesel 
or semi-diesel engine" of a cylinder 
capacity > 1.500 cm³ but <= 2.500 cm³ (excl. vehicles for the transport of persons on snow and other specially designed vehicles of 
subheading 8703.10) 1.1 5 4  2 2   
870322 Motor cars and other motor 
vehicles principally designed for 
the transport of persons, incl. 
station wagons and racing cars, 
with spark-ignition internal 
combustion reciprocating piston 
engine of a cylinder capacity > 
1.000 cm³ but <= 1.500 cm³ 
(excl. vehicles for the transport of 
persons on snow and other 
specially designed vehicles of 
subheading 8703.10) 0.9 5 4  3 1   
853400 Printed circuits 0.8 0  1     
847330 Parts and accessories of automatic 
data-processing machines or for 
other machines of heading 8471, 
n.e.s. 0.8 0  1     
853190 Parts of electric sound or visual 
signalling apparatus, n.e.s. 0.7 2.5 1 1 1    
842952 Self-propelled mechanical shovels, 
excavators and shovel loaders, 
with a 360° revolving 
superstructure 0.7 2.5 1 1 1    WT/REG359/1 
 
- 47 - 
 
  Korea's top export products in 2011-2013 Access Conditions for Korean ex porters to Australia's market 
HS number and description of the product Share in 
global 
exports 
(%) MFN 2014 No. of duty 
free lines 
under the 
agreement 
Remain 
Dutiable Average 
MFN 
applied 
rate (%) No. of 
dutiable 
lines No. of 
duty 
free 
lines 
2014 
2016 
2018 
854140 Photosensitive semiconductor 
devices, incl. photovoltaic cells whether or not assembled in modules or made up into panels; 
light emitting diodes (excl. 
photovoltaic generators) 0.7 0  1     
291736 Terephthalic acid and its salts 0.7 0  1     
290243 p-Xylene 0.6 0  1     
854239 Electronic integrated circuits (excl. 
such as processors, controllers, 
memories and amplifiers) 0.6 0  1     
870324 Motor cars and other motor 
vehicles principally designed for the transport of persons, incl. station wagons and racing cars, with spark-ignition internal 
combustion reciprocating piston 
engine of a cylinder capacity > 3.000 cm³ (excl. vehicles for the transport of persons on snow and other specially designed vehicles of 
subheading 8703.10) 0.6 5 4  1 3   
Total of above 49.7  27 37 16 10 1 0 
Source: WTO estimates based on data provided by Australian authorities; WTO-IDB and UNSD, Comtrade 
database. 
 Based on the HS 2012 nomenclature.  
Korea 
3. Table A1.3 shows tariff liberalization by Korea by total, agricultural and non-agricultural 
products. In 2014, Korea's average applied MFN rate was 13.5% overall (6.6% for non-agricultural 
products and 55.3% for agricultural products). 16% of Korea's tariff was duty free on an MFN basis; 17.7% of non-agricultural products and 5.5% of agricultural products were duty free. As a 
result of the Agreement entering into force ( 2014), Australian exporters enjoyed an absolute 
margin of preference of 5.1% vis-à-vis  the prevailing MFN tariff; 5.3% for non-agricultural goods 
and 3.8% for agricultural products. Immediately at the entry into force of the Agreement, the 
share of duty free lines for imports from Australia  was 73.3% (82.6% for non-agricultural products 
and 17% for agricultural products). Ten years after the entry into force of the Agreement, in 2024, 
Australian exporters will face zero duties on 93.6% of Korea's tariff (62.1% for agricultural products and 98.8% for non-agricultural products). In 2033, when Korea's tariff elimination 
programme will be fully implemented, the share of Korea's tariff that will be duty-free will reach 
98.1% (87.7% for agricultural products and 99.9% for non-agricultural products). WT/REG359/1 
 
- 48 - 
 
  Table A1.3 Korea, Republic of: Indicators of  MFN tariff rates and preferential rates for 
imports from Australia 
Origin of 
goods Year ALL PRODUCTS Agricultural productsa Non-agricultural products 
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 2014 13.5  16.0 16.0  55.3 58.5 5.5 6.6 8.0 17.7  
Australia 2014 8.4 31.5 73.3 51.5 62.1 17.0 1.3 7.5 82.6 
2015 7.6  28.7 73.3  48.7 58.7 17.0 0.9 5.2 82.6  
2016 6.9 39.5 82.5 46.0 63.3 27.3 0.5 6.0 91.6 
2017 6.5  37.0 82.5  43.7 60.1 27.3 0.4 4.4 91.6  
2018 6.0 48.1 87.4 41.3 67.1 38.4 0.2 5.4 95.5 
2019 5.7  45.7 87.4  39.6 64.2 38.4 0.2 4.0 95.5  
2020 5.4 54.7 90.1 37.8 70.2 46.2 0.1 4.5 97.3 
2021 5.2  52.2 90.1  36.2 67.2 46.2 0.1 3.5 97.3  
2022 4.9 49.7 90.1 34.6 64.3 46.2 0.1 2.6 97.3 
2023 4.7  73.7 93.6  33.0 86.9 62.1 0.0 3.9 98.8  
2024 4.5 71.4 93.6 32.0 84.3 62.1 0.0 3.2 98.8 
2025 4.4  77.0 94.3  31.0 82.7 62.5 0.0 5.9 99.5  
2026 4.3 75.0 94.3 30.1 80.7 62.7 0.0 5.3 99.5 
2027 4.1  72.6 94.3  29.1 78.1 62.7 0.0 4.7 99.5  
2028 4.0 152.4 97.4 28.1 159.2  82.3 0.0 14.7 99.9 
2029 4.0  151.5 97.4  28.0 158.2  82.3 0.0 14.7 99.9  
2030 3.9 152.5 97.4 27.8 159.4  82.6 0.0 14.7 99.9 
2031 3.9  204.8 98.1  27.6 217.8  87.3 0.0 14.7 99.9  
2032 3.9 204.7 98.1 27.6 217.7  87.3 0.0 14.7 99.9 
2033 3.9  211.0 98.1  27.6 224.8  87.7 0.0 14.7 99.9  
a WTO Definition. 
Note: For the calculation of averages, specific rates are excluded and the ad valorem  parts of alternate 
rates are included.  
 16 tariff lines under the Excluded category  reflect the MFN 2014 duties (footnote 1). 
 Based on the HS 2012 nomenclature. 
Source:  WTO estimates based on data from Korean authorities. 
 
4. Table A1.4 gives an indication of additional market access in Korea resulting from the entry 
into force of the Agreement for Australia's top 25 global exports, which accounted for 76.8% of its 
global exports in 2011-2013; these corresponded to 110 lines of Korea's tariff at the HS six-digit 
level (using the HS 2012). In 2014, prior to the entry into force of the Agreement, 21 of these 
tariff lines already had (MFN) duty free access to the Korean market. From the date of entry into force of the Agreement, in December 2014, until 2028, 86 of the 89 tariff lines, which were (MFN) 
dutiable, will progressively, become duty free for exports from Australia (70 in 2014; 3 in 2016; 
10 in 2018; and 3 in 2028). Three tariff lines
1 will remain dutiable after the full implementation of 
Korea's tariff elimination programme (in 2033). 
                                               
1 The three tariff lines concerned cover some cereals (HS 100390 – Other Barley) for which the average 
applied MFN tariff in 2014 was 359.1%. WT/REG359/1 
 
- 49 - 
 
  Table A1.4 Korea, Republic of: Market access opportunities under the agreement for 
Australia's top 25 exports to the world 
Australia's top export products in 2011-2013 Access Conditions for Australian exporters to Korea's market 
HS number and description of the 
product Share 
in 
global 
exports 
(%) MFN 2014 No. of duty free 
lines under the 
agreement 
Remain 
Dutiable Average 
MFN 
applied 
rate (%) No. of 
dutiable 
lines No. of 
duty 
free 
lines 
2014 
2016 
2018 
2028 
260111 Non-agglomerated iron ores and 
concentrates (excl. roasted iron pyrites) 25.3 0.0  3      
270112 Bituminous coal, whether or not 
pulverised, non-agglomerated 17.3 0.0  4      
710813 Gold, incl. gold plated with 
platinum, in semi-manufactured 
forms, for non-monetary 
purposes 5.8 3.0 5  5     
271111 Natural gas, liquefied 5.3 3.0 1  1     
270900 Petroleum oils and oils obtained 
from bituminous minerals, crude 4.3 3.0 10    10   
260300 Copper ores and concentrates 2.1 0.0  1      
281820 Aluminium oxide (excl. artificial 
corundum) 2.1 1.0 1  1     
100199 Wheat and meslin (excl. seed for 
sowing, and durum wheat) 2.1 2.1 5 1 5     
740311 Copper, refined, in the form of 
cathodes and sections of 
cathodes 1.2 3.0 1   1    
020230 Frozen, boneless meat of bovine 
animals 1.2 40.0 1     1  
300490 Medicaments consisting of mixed 
or unmixed products for 
therapeutic or prophylactic 
purposes, put up in measured doses "incl. those in the form of transdermal administration" or in 
forms or packings for retail sale 
(excl. medicaments containing antibiotics, medicaments containing hormones or steroids used as hormones, but not 
containing antibiotics, 
medicaments containing alkaloids or derivatives thereof but not containing hormones or antibiotics and medicaments 
containing provitamins, vitamins 
or derivatives thereof used as vitamins) 1.2 8.0 7  5 2    
760110 Aluminium, not alloyed, 
unwrought 1.1 1.0 1  1     
520100 Cotton, neither carded nor 
combed 1.0 0.0  6      
510111 Greasy shorn wool, incl. fleece-
washed wool, neither carded nor 
combed 1.0 0.0  1      
020130 Fresh or chilled bovine meat, 
boneless 0.8 40.0 1     1  
120510 Low erucic acid rape or colza 
seeds "yielding a fixed oil which 
has an erucic acid content of < 
2% and yielding a solid 
component of glucosinolates of < 
30 micromoles/g" 0.7 5.0 1 1 1     
271019 Medium oils and preparations, of 
petroleum or bituminous 
minerals, not containing biodiesel, n.e.s. 0.6 6.3 41  41     WT/REG359/1 
 
- 50 - 
 
  Australia's top export products in 2011-2013 Access Conditions for Australian exporters to Korea's market 
HS number and description of the 
product Share 
in 
global 
exports 
(%) MFN 2014 No. of duty free 
lines under the 
agreement 
Remain 
Dutiable Average 
MFN 
applied 
rate (%) No. of 
dutiable 
lines No. of 
duty 
free 
lines 
2014 
2016 
2018 
2028 
220421 Wine of fresh grapes, incl. 
fortified wines, and grape must 
whose fermentation has been 
arrested by the addition of 
alcohol, in containers of <= 2 l 
(excl. sparkling wine) 0.6 15.0 3  3     
260800 Zinc ores and concentrates 0.6 0.0  1      
260200 Manganese ores and 
concentrates, incl. ferruginous 
manganese ores and 
concentrates, with a manganese 
content of >= 20%, calculated 
on the dry weight 0.6 0.0  1      
100390 Barley (excl. seed for sowing) 0.5 359.1 4     1 3 
260700 Lead ores and concentrates 0.5 0.0  1      
260400 Nickel ores and concentrates 0.4 0.0  1      
760120 Unwrought aluminium alloys 0.4 1.7 3  3     
870323 Motor cars and other motor 
vehicles principally designed for the transport of persons, incl. station wagons and racing cars, 
with spark-ignition internal 
combustion reciprocating piston engine of a cylinder capacity > 1.500 cm³ but <= 3.000 cm³ (excl. vehicles for the transport 
of persons on snow and other 
specially designed vehicles of subheading 8703.10) 0.4 8.0 4  4     
Total of above 76.8  89 21 70 3 10 3 3 
Note: 
 For the calculation of averages , specific rates excluded and ad valorem  parts of alternate rates 
included. 
 Based on the HS 2012 nomenclature. 
Source: WTO estimates based on data provided by Korean authorities and UNSD, Comtrade database. 
__________