WORLD TRADE  
ORGANIZATION   
WT/TPR/M/268 
12 November 2012 
 (12-6209) 
Trade Policy Review Body 
19 and 21 September 2012  
 
 
 
TRADE POLICY REVIEW 
 
REPUBLIC OF KOREA 
 
Record of the Meeting 
 
Chairperson:  H.E. Mr. Eduardo Muñoz Gómez (Colombia) 
 
 
  Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF THE REPUBLIC OF KOREA  5 
III. STATEMENT BY THE DISCUSSANT 9 
IV. STATEMENTS BY MEMBERS 13 
V. REPLIES BY THE REPRESENTATIVE OF THE REPUBLIC OF KOREA AND  
ADDITIONAL COMMENTS 42 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 47 
 
 
Note:   Advance written questions by WTO Memb ers and the replies provided by the Republic of 
Korea are reproduced in document WT/TPR/M/268/Add.1 and will be available online at:  
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm.    WT/TPR/M/268 
 Page 3 
 
 
  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The sixth Trade Policy Review of Korea was held on 19 and 21 September 2012.  
The Chairperson H.E. Mr. Eduardo Muñoz Gómez (Colombia) welcomed the delegation of Korea 
headed by H.E. Mr. LEE Sihyung, Deputy Minister fo r Trade, Ministry of Foreign Affairs and Trade, 
and the discussant, H.E. Mr. Joakim Reiter (Sweden). 
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures for the meeting.  The report by Korea was contained in document WT/TPR/G/268 and 
that of the WTO Secretariat in WT/TPR/S/268. 
3. Questions by the following delegations had been  submitted in writing at least two weeks in 
advance and had been transmitted to the delegation of Korea:  Switzerland;  Australia;  United States; 
Hong Kong, China; New Zealand; Chinese Taipe i; China; Canada; the Philippines; Singapore; 
Mexico; India; Chile; ASEAN; Pakistan; Costa Rica; Japan; Indonesia; Thailand; the European 
Union; and Colombia.   The following delegations submitted wr itten questions after the two-weeks 
deadline:  Brazil; Argentina; Peru; South Africa;  and Ecuador.     
4. The Chairperson observed that both reports noted  that, thanks largely to exports, Korea's 
economy rebounded from the global financ ial crisis that erupted around the time of its previous Trade 
Policy Review in 2008 without resorting to protectionist measures.  On the contrary, Korea had opened its market further to international trad e by recently concluding major bilateral free trade 
agreements (FTAs).  Manufactured goods still accounted  for the bulk of exports, but the pattern of 
trade shifting from the United States,  the EU and Japan to China.   
5. Nevertheless, during Korea's previous Revi ew, Members noted the lagging productivity in 
certain sectors (notably agriculture and services) and the low level of inward foreign direct investment 
(FDI) in relation to GDP.  Accordingly, they enc ouraged Korea to continue structural reforms, 
especially involving deregulation and privatization, and to liberalize further its foreign investment 
regime.  He was sure that Memb ers would again be interested in learning more about how Korea 
intended to make progress in these areas in order to  respond to intensifying external competition. 
6. This Review provided Members with an opportunity to exchange views on topics of interest 
to this Body, including the following:  
 • Bilateralism and regionalism versus multilateralism :  Korea has maintained its 
support for, and commitment to, the strengthe ning and liberalization of the multilateral 
trading system and the successful conclusi on of the Doha Round negotiations.  At the 
time of the previous Review, Korea was urged to ensure that its bilateral and regional 
trade agreements were complementary to th e multilateral trading system.  Since then, it 
has pursued intensively comprehensive free-tr ade agreements (FTAs) with major trading 
partners or regional groups (i.e. India, EU, Peru and the United States as well as ASEAN) and notified them to the WTO.  Me mbers may be interested in learning more 
about Korea's progress and plans concerning the negotiation of FTAs with other large 
economic blocs and newly-emerging economi es as well as the FTAs contribution in 
reforming the economy and rais ing competitiveness, and how it compensates affected 
domestic producers and ensures that consumers share adequately in the benefits of FTA-
driven liberalization. 
 
 • Tariffs : As also indicated at the time of the pr evious Review, the tariff remains relatively 
high, given Korea's level of  development, and complex (involving a multiplicity of 
rates).  No tariff cuts were undertaken during the period under review, but as a result of the adoption of the HS 2012 tariff nomenclature, the average applied MFN tariff rate WT/TPR/M/268 
Page 4  
 
  increased.  Members may like to have inform ation on any unilateral measures envisaged 
to reduce and simplify the tariff.  
  • Technical standards and SPS :  At the time of the previous Review, certain Members 
sought clarification of some aspects of tec hnical standards and SPS practices.  Although 
attempts have been made during the review period to ensure that new Korean industrial 
standards are in harmony with newly- adopted  international standards, the share of non-
harmonized standards and the number of ma ndatory standards have considerably 
increased.  Members may be interested in learni ng more about Korea's plans in this area.  
 
 • State involvement in the economy :  Despite the Government's stated plans to proceed 
with divestment, state involvement persists in  a number of areas, including the gas and 
electricity sectors, financial and transport services, and the importation of some agricultural items. Members may like to have information on any privatization plans. 
 
 • Notifications :  Korea has taken steps to fulfill its transparency obligations at the 
multilateral level by, inter alia , meeting its WTO notification requirements, though in 
certain areas (e.g., state trading, special safeguards, agricultural export subsidies and 
government procurement) notifications have been subject to long submission gaps.  
Members may wish to know how Korea inte nds to improve the timeliness of its 
notifications. 
 
 • Agriculture :  At the time of the previous Review, Members encouraged Korea to step up 
agricultural reforms and thus reduce distor tions in both the production and trade of 
agricultural goods.  Since then, agriculture ha s been exposed increasingly to FTA-driven 
liberalization, and has been assisted by more market-oriented and environmentally 
friendly government intervention.  Neverthe less, the average applied MFN tariff for 
agricultural products remains more than eight times the tariff for non-agricultural 
products, and consequently domestic Korean pr ices continue to be significantly higher 
than world levels (on average 1.7 times); furthermore total support to the sector is almost as much as its share of GDP.  Members may be  interested in learning more about Korea's 
plans to further liberalize agriculture to the benefit of productivity and consumers. 
 
 • Services : At the previous Review, Members i nquired about how Korea was enhancing 
the competitiveness of its services sector, w hose labour productivity was half that of 
manufacturing. At present, services remain characterized by relatively low labour productivity (now less than half the level in manufacturing) and declining growth in total 
factor productivity (TFP).  Members may be interested to learn more about ways 
envisaged to enhance productivity in the sector and thereby cope with increased 
competition induced by FTA-driven liberalization exceeding Korea's GATS commitments.  WT/TPR/M/268 
 Page 5 
 
 
  II. OPENING STATEMENT BY THE REPRES ENTATIVE OF THE REPUBLIC OF 
KOREA  
7. Since its inception, the TPRM has served well its purpose of enhancing transparency in 
Members' trade policies and practices and examining their impact on the multilateral trading system.  Likewise, I am confident that this Review will pr ovide a valuable opportunity to help Members to 
further enhance their understanding of Korea's trade policies and changes thereof over the last four 
years.  In addition, it will also serve as an impor tant occasion for Korea to reassess its trade policies 
and practices through the eyes of fellow Members.   
8. In my opening statement, I would like to begin with an overview of the factors that helped 
Korea rebound from the 2008 global financial crisis, which took place right after our last review.  I 
will then share with Members the challenges that the Korean  economy still faces as well as the 
strategies and actions that we have employed to c ope with those challenges.  Lastly, I will touch upon 
the basic direction of our trade policy. 
9. As an export-oriented open economy, Korea is vulnerable to external shocks such as the 
2008 global financial crisis.  We were hit hard  by the crisis, though not as severely as during the 
1997 Asian financial cris is.  Between August 2007 and November 2008, the Korean currency "Won" 
lost almost half of its value, and Korea's forei gn exchange reserve was slashed by 23% in 2008 over 
the previous year.  From 2007 to 2009, the Korean GDP and per capita GNI fell by more than one fifth, and Korea posted the first trade deficit in 2008 in 11 years.  
10. However, we were able to rebound rather quickly  from the crisis, thanks to a series of prudent 
economic policies implemented by the government.  They included a large fiscal stimulus package 
amounting to 3.6% of GDP, as well as an accommodative monetary policy by the Bank of Korea 
which lowered its key interest rate to a record lo w of two percent.  Favourable trade conditions such 
as the sharp decrease in the value of the Korean won during the ear ly stages of the crisis also 
contributed to the swift recovery. 
11. In the meanwhile, it should be noted that the government's actions grounded in the hard-
learned lessons from the earlier Asian crisis proved to be driving factors behind our gradual economic 
uptrend. The Korean government had learned the cr itical importance of regaining market confidence 
through structural reforms in the difficult times of late 1990s.  As a result, Korea became one of only 
three OECD member countries to  achieve positive economic growth in 2009, while the world 
economy was still in the midst of the financial crisis.  
12. Although Korea's economic outlook  remains positive and relatively stable, it is yet too early 
to declare lasting recovery.  Slowdowns in major economies following the persisting debt crisis in 
Europe would have an impact on the Korean economy , given that its exports account for more than 
half of its GDP.  Rising international prices of oil an d grains are also troubling as Korea is the world's 
fifth largest importer of both.  Internally, the Korean economy is feeling the pinch as snowballing 
household debt is weighing on private consumpti on.  Household debt amounted to 164% of 
disposable income or 89% of GDP in 2011. 
13. Against this backdrop, the Bank of Korea recen tly revised down the growth forecast for this 
year to 3.0%, which is lower than previous 3.5% , citing decrease in exports and domestic demand.  
Meanwhile, OECD's 2012 Economic Survey on Korea points out two key longer-term challenges: sustaining economic growth in the face of rapidly aging population, and improving social cohesion by 
reducing inequality and relative poverty.  
14. In order to address such challenges, we have ta ken up a number of measures.  While we have 
undertaken painful but necessary economic reforms domestically, we have maintained a strong WT/TPR/M/268 
Page 6  
 
  commitment to our WTO trade obligations, resis ting the temptation of adopting trade-restrictive 
measures. 
15. Let me further elaborate on these efforts.  Kor ea has made prudent use of the global financial 
crisis to push ahead domestic reforms in various  sectors of its economy, focusing on laying down a 
firm foundation for future economic growth. 
16. In the financial sector, we adopted the free-fl oating exchange rate regime to support the 
capital market liberalization.  Macroeconomic stab ility was enhanced as we implemented a series of 
macro-prudential policies to reduce excessive volatility in capital flows. 
17. In the labour sector, we have undertaken reform s to increase labour participation, especially 
for women, youth and the elderly, given that work ing-age population is projected to start declining 
from 2017.  In particular, to raise the level of fema le participation, we took steps to encourage better 
work-life balance and mitigate the difficulties re lated to childcare through efforts such as expanding 
public childcare access.  These measures are also e xpected to contribute to boosting Korea's birth rate 
of 1.24, which is among the lowest in the world.  
18. Recognizing unnecessary regulations as the prime impediment to attracting investment and 
creating jobs, we have continued to make sincere efforts to systematically remove or streamline 
regulations that have held down businesses.  In th is regard, we are pleased to note that the World 
Bank, in its latest 2011 "ease of doing business" ranki ng, recognized Korea as one of the countries 
with the most improved climate, placing it 8
th among 183 countries surveyed.  Korea was ranked 30th 
in 2007. 
19. In conjunction with these reforms, we have  sought ways to ensure sustained economic 
progress as we tackle global climate change and energy  crisis.  As a solution, the Korean government 
announced "Low Carbon, Green Growth"  as a national policy vision in 2008.  This low carbon, green 
growth policy is expected to contribute to the development of green technologies and the promotion 
of green industries, which will help enhance economic growth, create jobs, reduce greenhouse gas 
emissions, and mitigate climate change. 
20. In 2009, the Korean government announced a Five-Year Plan for Green Growth which, 
among other things, commits 2% of the annual GDP to  green growth policies and projects.  This is 
twice the level recommended by the UN.  In Nove mber 2009, Korea adopted a national mid-term goal 
of cutting 30% of greenhouse gas emissions by 2020, as compared with the projected business-as-
usual level.  
21. Bearing in mind FDI's important role in ec onomic growth and job creation, the Korean 
government has implemented a series of measures aimed at further reducing barriers to FDI and 
fostering more foreign investment -friendly environment. As a result of our proactive FDI inducement 
policy and relatively stable economic fundamentals in spite of the precarious global investment 
climate, the FDI inflow to Korea in 2011 reached  US$13.6 billion, a record-high since 2000.  With 
several bilateral FTAs in place, Korea is expected to be a more attractive FDI destination for those 
businesses which are looking for favourable opportunities in Korea's FTA partners. 
22. Since the last review, Korea has been raisi ng its profile and contribution on the global 
economic stage.  In November 2010, Korea successful ly hosted the G-20 summit for the first time as a 
non-G7 country. Not only hosting the Summit, Kor ea took an active role to produce a "standstill" 
commitment at the G-20 Washington Summit in 2008.  This stemmed from the recognition that 
protectionism can only worsen the situation at a time of global economic crisis as it did during the 
Great Depression of the 1930s.   WT/TPR/M/268 
 Page 7 
 
 
  23. In April 2012, Korea pledged to contribute US $15 billion to the IMF to increase the agency's 
lending resources in the wake of global financial di fficulties.  This marks a stark turnaround for a 
country that was on the receiving end of IMF bail out funds just 15 years ago during the Asian 
financial crisis.  
24. In 2010, Korea joined the OECD Development As sistance Committee, officially transforming 
its status from a recipient to a donor state of ODA  in less than half a century.  Korea has been 
expanding the volume and scope of its ODA with a view to promoting a more balanced global 
economy.  Korea's ODA has roughly doubled, fr om US$700 million in 2007 to US$1.3 billion 
in 2011.  Along these lines, Korea will step up its efforts to help other countries achieve their 
development objectives not only through more fina ncial aid but also by sharing its unique 
development experiences.  
25. Now, let me turn to the overall direction of  our trade policy during the period under Review 
and the years to come. As one of the major beneficiaries of the multilateral trading system, Korea has pursued an open economy that fully complies with th e principles and provisions of the WTO rules.  
As such, Korea has been faithfully implementing its obligations under WTO agreements.  Korea has 
also undertaken voluntary measures in some areas that go beyond its WTO commitments. 
26. Moreover, since the last Review, Korea has exercised great restraint by making minimum use 
of trade remedies that are allowed under the relevant  WTO agreements.  In the same vein, we have 
tried our best to resolve trade issues through bilateral discussions.  Only when necessary and 
warranted, we invoked WTO dispute settlement proce dures to protect our legitimate trade interests 
against unfair practices.  
27. We firmly believe that a robust multilateral trading regime underpinned by the WTO has a 
crucial role to play in helping the global economy gr ow and prosper.  To that end, we have actively 
and constructively participated in the efforts for a successful conclusion of the DDA negotiations.  We 
will continue to do our due part to help move th e stalled negotiations forward in close cooperation 
with other Members.  
28. As I just explained, Korea puts utmost priority on a strong and vibrant multilateral trading 
system as embodied in the WTO.  At  the same time, Korea has been engaged in various bilateral and 
regional trade agreements as complementary to ols for further liberalization since 2003.   
29. As of today, we have eight FTAs with 45 i ndividual countries in force and two others are 
waiting to be approved by the National Assembly.  We have been negotiating FTAs with several other 
partners for some years, and recently launched nego tiations with three more countries.  Last May, 
leaders of Korea, China and Japan agreed to launch negotiations on a trilateral FTA within this year. 
30. Initial assessments on the benefits of the FTAs fo r Korea as well as for its FTA partners seem 
to be positive.  While world trade shrank 6.2% between 2008 and 2010, Korea' s trade grew 4%.  More 
importantly, the annual average trade volume with our FTA partners has increased 31.3%, compared with that of 19.8% with all others.  
31. I wish to take this opportunity to remind you that  we have taken every care to ensure that our 
FTAs are fully in line with the letter and spirit of the WTO agreements.  Most of our FTAs are 
comprehensive and high-quality, as they cover not only trade in goods and services but also a wide 
range of other areas, which include investment, inte llectual property rights, government procurement, 
and trade rules.   
32. I would also like to note that Korea maintains staunch support for regional cooperative bodies 
such as APEC and ASEAN plus forums that ai m to promote greater economic and technical WT/TPR/M/268 
Page 8  
 
  cooperation among members and ultimately support the multilateral trading system.  In a nutshell, I 
can assure you that we will continue to put forth our  best efforts to make sure that our bilateral and 
regional trade liberalization efforts will continue  to serve as a facilitator of multilateralism.  
33. Since the global economy is not likely to recover from the slump for the time being, and 
temptations to erect trade barriers could grow, it  is needed more than ever to strengthen the 
multilateral trading system as well as the monitoring  and surveillance function of the WTO.  Korea 
remains firmly committed to the success of this orga nization, and will continue to make an all-out 
effort to keep protectionism at bay especially in these difficult times. 
34. Convinced that successful conclusion of the DDA ne gotiations will bring great benefits to the 
entire global community, Korea will continue to wo rk closely with other Members to unlock the 
current impasse.  In parallel with such efforts, we  will also make every effort to help advance the 
discussions in the areas of trade facilitation,  ITA expansion and services liberalization. 
35. At the same time, Korea will not step back  or shy away from carrying out difficult but 
necessary domestic reforms that promise to improve efficiency, transparency, and fair competition in 
its economy.  In conclusion, I recognize that no matt er how far or how fast we have come, there is 
always room for improvement.  Indeed, that is why we value the TPR and gather here today for these 
discussions.  My delegation is looking forward to hearing your valuable views and suggestions.    WT/TPR/M/268 
 Page 9 
 
 
  III. STATEMENT BY THE DISCUSSANT (H.E. MR. JOAKIM REITER (SWEDEN)) 
36. As a way of introduction, I wish to start by putting Korea in a broader and longer-term 
perspective. The development of Korea's economy and trade represents a journey, of only around 
60 years, from a war-torn LDC to one of the world's richest, most technologically advanced and trade competitive industrialised countries.  In a nutshe ll, Korea seems to hold something of a "world 
record" in economic development. Korea is toda y a member of OECD and G20, it is ranked 15
th in 
terms of GDP by the World Bank and it is the world's 7th largest exporter and a major investor 
globally. And the fact that this transformation has occurred despite the country's scarcity of natural 
resources, energy and arable land, in the absence of  peace and with constant threats to its political 
stability, only makes it all the more impressive.  
37. Korea has also, more recently, proved itself as a truly resilient and advanced country in the 
face of global crises. Exports rebounded from 2010 and stabilized at 9.5% growth in 2011, allowing 
not only recovery of real GDP growth, but also the continuation of Korea's very large trade surplus and its build-up of significant inte rnational reserves. And notwithstanding the stimulus package in 
response to the crisis, Korea aims to return to a balanced budget by 2013 and was recently 
commended by the IMF for its long-standing commitment to fiscal prudence.    
38. With all of this in mind, I would like to limit my self to doing two things in the time allocated 
to me here today. Firstly, I intend to follow-up on the last Review in 2008 and, more specifically, the 
different points then raised by the Discussant, as well as the Chair, to assess the progress made (one of 
the roles of discussants in TPRs, which was underlined  in the fourth appraisal, is to review policy 
changes since the previous TPR). Secondly, I woul d want highlight some ove rarching considerations 
– indeed structural challenges – that struck me th e most when reading the reports and that I thought 
could contribute, in an open and frank manner, to  our exercise of mutual learning and experience-
sharing here today.  
39. At the last Review, Korea was commended for its structural reforms as well as its pursuit of 
an outward-oriented economy. The Chair recalled Korea's recovery from the 1997 Asian financial 
crisis through increased liberalization (not protecti onism). Measures taken to create a more business 
friendly environment were welcomed, for example wi th regard to customs procedures and IPRs. And 
Korea was praised for its active and constructive pa rticipation in the Doha Round, as well as for its 
support to WTO technical assistance activities. Much , if not all, of this remains valid today. 
40. But, as appropriate and expected, the Discuss ant, as well as the Chair in the concluding 
remarks, also raised a number of questions and concerns. To facilitate our assessment of possible 
progress on these, I will use three simplistic cate gories: good news, less good news and the mixed 
category of measures that are too early to tell. Or – for those more keen on WTO-jargon – a green 
box, an amber box and, in the middle, a blue box.  
41. Let me start with the "green box", i.e. th e good news. Although ma ny reforms and positive 
steps have been taken, I would like to highlight, in particular, trade facilitation. Of course, with a vast 
web of FTAs and with manufacturing companies firmly integrated in global value chains, improving 
customs and facilitating trade should be a necess ity for Korea, like for many countries. But, 
considering the impressive modernization of customs procedures, it is fair to say that Korea now is a world leader in this area. Its experiences are surely something that many WTO Members could benefit from and I encourage Korea to make use of this opport unity to explain the rationale and content of its 
many positive reforms.  
42. Then there is the "amber box", the less good ne ws. For a rather substantial number of the 
items raised in 2008 – not least tariffs, non-tari ff measures and domestic subsidies to agriculture – 
progress has been limited during the Review period.  WT/TPR/M/268 
Page 10  
 
  43. Firstly, Korea, which still derives significan t and increasing revenues from tariffs, continues 
to maintain its relatively complex trade policy regard ing customs tariffs. It has a multiplicity of rates, 
relatively high tariffs across the board – the aver age applied MFN tariff rate actually increased from 
12.6% to 13.3% during the period of review; it has particularly high agricultural average duties, as well as non-ad valorem duties and significant peaks, so me of which seems to be at prohibitive levels. 
Korea also maintain a rather elaborate scheme of  tariff concessions and duty drawbacks, so as to 
avoid that its high import tariffs ha rm the exports of its industries that form part of global value-
chains. In addition to not having bound all of its ta riffs in WTO, it continues to discretionally use the 
gap (of 4.3 percentage points) between the averag e bound and applied rates in the form of so-called 
"flexible tariffs". These, along with the adjustment  duties and so-called "u sage" tariff rates, can 
considerably and unpredictably a lter the conditions of imports.  
44. Similarly, as regard non-tariff measures, Korea continues to apply an import quota 
(until 2014) and quantitative export restrictions on rice, although the latter is poorly used. It also 
maintains tariff-rate quotas on many (about 187) ag ricultural tariff items, for which the average fill 
rate is still low – only around 66%, which is lower than in 2006. There remain concerns that the 
administration and allocation of quotas may be restricting imports, not least in light of the fact that 
quotas are in some cases managed by associations of  producers and that state-trading entities impose 
additional mark-ups on top of the in-quota tariffs . In addition, import approvals, in the form of 
certification requirements, cover numerous tariff items. With regard to technical regulations to trade 
and sanitary measures, despite Korea's efforts to  harmonize with international standards, the 
Secretariat report points to a considerable increase in recent years in the sh are of "unique" Korean 
standards (that deviate from international norms or  for which there are no corresponding international 
norms) as well as in the number of mandatory standards.  
45. Finally, with regard to agricultural subsid ies, while government intervention increasingly 
strives to become more market-oriented and envi ronmentally friendly, and imports have actually 
increased thanks to FTAs, domestic support (2% in 2010)  continues to be almost at the level of the 
sector's contribution to GDP (2.7%). Producer suppor t remains almost twice the OECD average, the 
vast majority of which (90% of total support)  is in the most production and trade distorting 
forms of support. In addition, direct export subsid ies are maintained for certain agricultural products. 
Self-sufficiency is still a predominant policy consid eration and the self-sufficiency targets were, in 
fact, raised as late as in 2011, despite the sector's  falling share of GDP and total employment. Korean 
consumers pay a hefty price for these policies (on av erage 1.7 times world levels 2008-2010), even if 
they seem to pay somewhat less compared to the l ast period of review (2.5 times in 2004-2006). 
46. To sum up: For these specific is sues (and some others), question-marks remain about the 
degree of market openness and predictability of Korea's trade regime. In this li ght, I think it would be 
useful to hear comments of the Korean delegation both on the seeming lack of progress and the possibility of reconsidering some of these policies and practices, even in the unfortunate absence of 
progress in the DDA.   
47. Lastly, we have the blue box. In these areas, Korea should be recognized for having 
undertaken efforts compared to the last review, even  if the positive results have not always – at least 
to date – materialized. FDI inflows, I would argue, represent such a case. Korea has indeed tried to improve the situation, for example by promoting FDI in specialized zones and locations as stipulated 
in the 2011 FDI Promotion Policy. And it seems to be partly paying off, although mainly in a few 
sectors and from very low initial levels.  
48. However, notwithstanding these efforts, the fact re mains that Korea continues to be one of the 
least attractive FDI destinations among OECD-count ries. Some of the reasons for the persistent 
underperformance, according to the Secretariat Report and as the Deputy Minister highlighted, are the 
cost of doing business and unnecessarily burdensome re gulations, as well as the continued closure or  WT/TPR/M/268 
 Page 11 
 
 
  partial restrictions on foreign investors in a number of services sectors. Added to that, I note the slow 
progress on privatization. Therefore, it would be interesting to hear Korea's assessment of what 
additional and alternative measures, including market  access and market opening, it would be ready to 
consider so as to more seriously reverse the trend for FDI-inflows. 
49. In the review of Korea, it is sometimes difficult to see the forest for all the trees. Therefore, I 
would therefore wish to highlight some broader stru ctural and systemic aspects related to the overall 
assessment of Korea – specifically the high degree of market and trade concentration, and the high degree of state intervention – that in many cases se ems to set the frame for Korea's specific measures 
and determine the path ahead. 
50. What really sticks out from the Secretariat Repor t is that Korea's economy is dualistic – even 
divided. On the one hand, we have highly m odern, capital-intensive and outward-oriented 
manufacturing companies, such as in ICT, shipbui lding and automotives, representing around 85% of 
exports in 2011. On the other hand, we have th e services and agricultural sec tors that suffer from 
persistent low productivity, competitiveness and ope nness, while still representing the bulk of total 
employment. What is more, manufacturing tends to be concentrated to a limited number of 
conglomerates, some of which are family owned, while SMEs dominate the services sector.  
51. These are inherent structural weaknesses, indeed divisions, in the economy. But they also 
create social divisions, what the OECD raised as a ch allenge to social cohesion, which feed back into 
the economy (e.g. in Labour union actions). And they underline the need to "level the playing field" 
between economic operators: be it manufacturing vs services, small vs large companies, or even 
foreign vs domestic.  
52. Even so, the thrust of Korea's industrial policy,  and hence its trade policy, seems to be based 
on the premise of "picking winners", as illustrated by the New Engine Growth Activities, The National Strategy for Green Growth and the Devel opment Plan for the Shipping Industry. Targeted 
state interventions remain massive in the form of tax concessions, support programmes, grants, low-
interest loans, export credits/financing, even funds to cope with problems of access to raw materials 
and reduction on energy charges, just to name a few programmes. True, SMEs and services are 
increasingly included or targeted by such measur es, including through government procurement and 
competition policy. But many of these measures seem also, if not predominantly, to benefit 
manufacturing, and arguably large conglomerates.  
53. Moreover, the mere fact that most of Kore a's tax incentives have been extended, despite 
sunset clauses, should be a matter of concern from the point of view of the risks of "policy capturing" 
by vested interests. It is noteworthy that, in th e recent WEF-ranking "The Enabling Trade Index 2012" 
where Korea was overall ranked 34 out of 144 countries, Korea only came on 73
rd place with regard 
to the category "undue influence" and, for the cat egory of "government efficiency", its ranking was 
worse (99th place).   
54. To my mind, therefore, more of the same is unlikely to work in the long term, both for 
services and for SMEs more broadly. The lagging perf ormance of some sectors and operators is both a 
result of, and tends to result in, inadequate openn ess, attractiveness and competition, as illustrated by 
low FDI-inflows and the very small share (1.6%) of foreign suppliers in government procurement. 
Further reflection seems warranted on the implications  of targeted state interventions for promoting 
economy-wide competitiveness and productivity, and I would be interested in hearing Korea's views 
on this topic.    
55. Also in the WTO, the dualistic nature of Kor ea's economy, and its trade policy, is apparent. 
Korea has been, and continues to be, a strong s upporter of WTO and DDA, which it rightly recognises 
provide huge benefits to Korea. But the gap in  competitiveness between its domestic sectors has WT/TPR/M/268 
Page 12  
 
  translated into very different levels of ambitions with regard to liberalization. Partly in contrast, 
outside the WTO, Korea has successfully pursued am bitious and comprehensive FTAs in recent years. 
In light of this, as a concrete step to ensure coherence between regionalis m and multilateralism, ample 
scope should exist for Korea to undertake much mo re comprehensive commitments in the WTO in the 
future, not least in services but also in agricult ural market access. Finally, Korea maintains its 
developing country status in this organization, probably in part based on the recognition of its 
structural weaknesses. But, frankly – on the basis of  most objective criteria – it should be considered a 
developed country.    
56. Korea is a success story and it has continued from strength to strength also in this period of 
review. On the other hand, it has structural weakness es and some aspects of its trade regime could be 
adjusted to better serve the immediate and long-t erm interests of the country. Perhaps Korea is a 
victim of its own success, as it has made it even more difficult to rebalance its economy and reconsider the traditional manner in which th e state has intervened in the economy.  
57. There are of course many other important issues in the trade policy of the Korea that I did not 
touch upon in detail but that will ce rtainly be enquired about by Members. As a Discussant, I chose to 
focus on following-up on the last review, as well as to set out some overall structural aspects that I 
believe are indicators of Korea's present and future  challenges in the global economy and to sustained 
economic growth.  
  WT/TPR/M/268 
 Page 13 
 
 
  IV. STATEMENTS BY MEMBERS 
SWITZERLAND 
 
58. This Trade Policy Review comes certainly at a challenging point of time as, if you allow me 
the image, the economic traffic lights in East Asia turn from bright green to yellow. I need not remind 
you of the developments over the last months. Also the Korean economy which has proven its 
resilience so far will inevitably feel the impact of falling demand in many of its markets. We will see 
if losses in some markets may be recovered through gains in others. 
59. Nevertheless and despite these rather challenging prospects, I am pleased to say that bilateral 
economic relations between Switzerla nd and Korea have so far suffered only slightly. The Republic of 
Korea with which we celebrate 50 years of bilatera l relations is one of our very important trading 
partners in Asia, although many of its main e xport products enter Switzerland from other territories 
due to the highly decentralised and optimised na ture of their production. As for Swiss direct 
investments, the Swiss private sector maintains considerable confidence in Korea as a business 
location. 
60. As a small but export-oriented country, having a level playing field is crucial to Switzerland. 
Questions submitted by Switzerland concern theref ore areas like quota administration and state 
trading enterprises where we sought to have an e xplanation how access to Korea's WTO tariff quotas 
could be improved, noting they have only low fill rates. 
61. Another area of perennial interest  to us is the setting and appli cation of standards. Switzerland 
is very interested in its trading partners adheri ng to international standards and only deviating from 
them with a good reason and on a sound scientific basis. As in some other countries, the discrepancy 
between Korean legislation and the relevant internat ional OIE standard with regard to BSE has caught 
our particular concern. 
62. Before I conclude, I would like to highlight the active and initiative role of Korea and the 
good cooperation Switzerland and Korea enjoy in th e WTO. For exporters of high-value and high-
technology goods like our two count ries, a strong rules-based system, as provided by the WTO, 
remains essential. We look forward to pursuing and further enhancing our already very close 
cooperation in this regard. 
AUSTRALIA 
63. Korea is Australia's fourth-largest trading pa rtner. Trade flows are highly complementary and 
built on a long-standing relationship.  Over the past five years, two-way goods and services trade has 
grown by an average of 9% a year. Total trad e in 2011 exceeded $A30 billion. Two-way trade is 
dominated by manufactures.  In comparison with Au stralia's trade with other trading partners, 
Australia's services trade with Ko rea is relatively undeveloped.  
64. Turning to Korea's overall trade performance in  recent years, we see that Korea has come 
through the global financial crisis re asonably well. It is interesting to  note that part of the reason for 
Korea's success in weathering the storm has been Korea's willingness to open its markets, notably 
through FTAs, and in doing so to improve its own international comp etitiveness, rather than to be 
tempted to adopt inward-looking, insular responses. It is notable that the importance of trade to 
Korea's economy has grown significantly since its last TPR in 2007, with total goods trade growing 
from 42% to 56% of GDP, and total services trade growing from 40% to 54% of GDP. 
65. In recent years, Korea has also undertaken wide -ranging reform of its trade facilitation regime 
to streamline already efficient customs procedures, such that it is now widely recognised as a world WT/TPR/M/268 
Page 14  
 
  leader in facilitating trade. Australia commends Korea's efforts in this area and appreciates its 
constructive contributions to the discussion of trade facilitation in the WTO context, particularly in 
sharing its experiences in customs reform and best practice.  
66. Although these developments are welcome, it also  has to be noted that Korea's tariff regime 
remains complex, with 84 ad valorem  and 46 alternate duties in its customs tariff schedule. The 
Secretariat Report also notes that Korea's averag e applied MFN rate is high by OECD standards. 
These may be two areas for Korea to evaluate whet her its current approach is delivering the best 
outcomes for economic growth. 
67. Australia notes the challenges of wage inequalities th at have arisen in certain parts of Korea's 
economy. Promoting efficient investment can play an important role in improving employment 
opportunities, and in this area too there may be room for further effort by Ko rea: as the Secretariat's 
report notes, inwards FDI as a percentage of GDP is among the lowest in the OECD.  
68. Australia recognises Korea's efforts to improve the investment environment and to increase 
integration into the global economy in terms of impor t penetration, the share of foreign workers and 
stocks of inward FDI. This has been reflected in the improvement in Korea's ranking in the World 
Bank's Ease of Doing Business 2012 Report . 
69. Australia also welcomes efforts by Korea to introduce policies, institutions and tools to 
promote high quality regulation in the services sector . Australia supports Korea's continuing efforts 
through, for example, increased market access in key professional services sectors, which have the 
potential to enhance the competitiven ess of Korea's services sector. 
70. However, Australia would ask Korea to cons ider further relaxing its FDI restrictions, 
including foreign ownership ceilings in key services  sectors, and other measures to integrate better 
into the global services economy. Such liberalisati on could also help with technology and know-how 
transfer, as well as contributing to employment growth in Korea. 
71. Turning to agriculture, Australia notes that Kore an support in this sector is among the highest 
in the OECD. Average applied MFN tariffs for agri cultural products are some eight times higher than 
they are for manufactured products and Korea s till maintains tariff peaks of over 800% on some 
products. 
72. While Korea's Percentage Producer Support Estimat e has fallen considerably since the start of 
the Uruguay Round, much more could still be done  to reform support programs for agriculture, 
especially in view of the sector's contribution to overall GDP growth. Australia notes that, according 
to the Secretariat's report, agriculture contributed to  2.7% of overall GDP, compared with the cost of 
support which was the equivalent of 2% of GDP . In these uncertain times, governments around the 
world, including Korea's, need a bette r rate of return for monies spent. 
73. On standards, Australia recognises that Korea has made steps to ensure that new Korean 
industrial standards are in harmony with internati onal standards.  However, Australia notes that the 
share of non-harmonised standards has increased since the last review.  Austra lia encourages Korea to 
increase the number of Korean industrial standards whic h are in harmony with international standards.  
74. Korea, as an original WTO Member and a member of the G-20, is an important player in 
global economic terms, and especially in the Asia-P acific region. Australia welcomes the contribution 
Korea has made to economic growth more broadl y as its own economy has grown. Australia's is 
confident Korea can to continue to play a highly constructive role in ongoing efforts to promote trade 
reform in its own region and globally.   WT/TPR/M/268 
 Page 15 
 
 
  75. In the WTO, Australia looks forward to work ing constructively with Korea to continue 
advancing trade reform. Economies th at benefit significantly from trade,  such as Australia and Korea, 
have a common interest in ensuring the multilatera l trading system remains vibrant and active and 
ensuring that WTO Members continue to resist protectionism. 
UNITED STATES 
76. The United States places extraordinary value on its  relationship with Korea.  The time since 
Korea's last trade policy review has been quite cons equential for both of us.  First and foremost, we 
opened a new chapter in our trade relationship with the March 15 entry into force of our bilateral free 
trade agreement.  As most of you know, this  was a long and challenging process from when the 
negotiations began in 2006 to entry into force.  A nd make no mistake - this is a major agreement - our 
bilateral trade relationship including services exceed s $120 billion.  Despite the high stakes, KORUS 
passed with strong bipartisan support in the United States, reaffirming the strong U.S. support for 
open trade and our ability and readiness to reach comprehensive agreements with major economic 
partners.   
77. The Korean government also had to contend with domestic challenges along the way, and 
Korea deserves our admiration for its determination to take the political risks inherent in pursuing and 
concluding an agreement that opens markets across the whole economy and involves substantial 
domestic reforms.  Together, we have concluded an agreement we believe serves as a global model 
for high quality free trade agreements.  I also want  to express the sincere thanks and gratitude of the 
United States to Korea's new Ambassador CHOI Se ok-young for his untiring efforts to reach this 
agreement.  He was absolutely critical to achievi ng success in this endeavou r, and is truly one of 
Korea's ablest negotiators.  Thank you, Ambassador Choi, for your pe rsonal contributions to this great 
achievement.  As Korea's report notes, the KORUS FTA is already increasing bilateral trade between 
us, with investment also showing an increase compared to last year.  We expect the FTA to have far-reaching, job-supporting economic be nefits to both countries, from increased exports to increased 
competitiveness. 
78. Beyond the KORUS FTA, U.S.-Korean cooperation has been growing in other aspects of our 
trade relationship as well.  We are close partners in APEC, where Korea has contributed significantly 
to APEC's work on regional economic integration,  green growth, and regulatory convergence.  We 
have worked together to strengthen international protection and enforcement of intellectual property 
rights through ACTA.  And here in the WTO, we would in particular point out Korea's support for 
services liberalization as reflected by its longstandi ng membership in the Really Good Friends of 
Services group and current participation in discussions concerning a services plurilateral initiative. 
79. Since the last review of Korea in 2008, the worl d has seen significant changes, with the global 
financial crisis beginning in late 2008.  As the reports by the Secretariat and Korea make clear, amidst 
these sobering changes, Korea has taken aggressive st eps to counter the global trend and become one 
of the first countries to follow the path to economic  recovery.  In addition to effective fiscal and 
monetary policies, the Korean government has also  continued market-opening policies while at the 
same time proceeding with domestic regulatory reform measures. 
80. And as a further sign of its commitment to trade liberalization, Korea has continued down an 
ambitious path of concluding WTO-plus free trade ag reements.  Since the last review, in addition to 
the United States, Korea has also entered into free trade agreements  with the ASEAN, India, the 
European Union, and Peru, and as noted in the re ports, is currently in negotiations with several 
additional countries.   
81.
 We would also like to highlight the progress noted in the WTO reports regarding customs 
procedures.  This is an area where Korea is consider ed to be a leader in international best practices, WT/TPR/M/268 
Page 16  
 
  and Korea has further streamlined and modernized it s customs procedures since the last review.  The 
United States also welcomes the progress Korea has made in improving competition laws and regulations, improving corporate governance, transparen cy, and financial sector restructuring, all of 
which were noted in the Secretariat's report.    
82. Given the clear determination of the Korean  government to further open its trade and 
investment regimes, the United States urges Korea to make additional progress in reducing 
burdensome, sometimes duplicative and scientifically  questionable regulations and procedures related 
to technical regulations, standards,  and conformity assessment.  This is an area where Korea's regime 
continues to sometimes present unique difficulties for companies trying to export into its market. 
83. Furthermore, while we respect Korea's right to adopt sanitary and phytosanitary measures 
necessary for the protection of human, animal and plant life or health, we look to Korea to ensure that 
its SPS measures are based on science and consistent  with the WTO Agreement on the Application of 
Sanitary and Phytosanitary Measures.    
84. We note that Korea's ratio of inward foreign di rect investment to GDP is among the lowest in 
OECD comparisons.  We recognize Korea's efforts to address this, and look forward to possible 
improvements through our FTA. Nevertheless, we en courage our Korean partners to continue down 
the path of easing burdensome regulations  and improving the business environment. 
85. While we welcome the rise in the import shar e of the Korean passenger vehicle market, 
nevertheless, there remains a large imbalance in Kore a's automotive trade.  We urge Korea to continue 
to adopt policies that level the playing field in this sector.  
86. Korea is a strong partner and ally of the Un ited States, on trade matters and beyond.  The 
ongoing efforts of the Korean government to further open its economy will increase the global 
competitiveness of the Korean economy for the benefit of its own people, while forging stronger links 
with its trading partners.  We welcome the progress Korea has made since its last review and pledge 
to work closely with Korea in the WTO, in ot her regional forums like APEC, and, of course, 
bilaterally, to pursue our common goal of a free and open global trading system. 
HONG KONG, CHINA 
87. Korea has been one of our key trading partners  for many years.  Merchandise trade between 
Hong Kong, China and Korea has grown steadily over the last five years at an average annual rate of 
5%.  In 2011, we were each other's 6
th largest trading partner with  a total trade value exceeded 
US$27 billion.  Building on the strong trade relationshi p, we look forward to fostering even closer 
economic and trade cooperation with Korea. 
88. Turning to some specific aspects of Korea's tr ade policy, we are glad that Korea has bound 
almost 90% of its tariff lines and over 99% of its tariffs are ad valorem duties.  However, very high 
peak tariffs of up to 754% are applied to  certain non-agricultural products.  Peak ad valorem rates also 
apply to agriculture with tariffs  up to 887%.  In addition, non- ad valorem  tariffs tend to conceal tariff 
"peaks" involving ad valorem  equivalents of up to 1,506% (cinem atographic film).  The gap between 
the average applied rate (13.3% in 2012) and bound  rate (17.6%) also allows leeway for Korea to 
apply higher MFN duties, termed "flexible tariffs",  to discourage certain imports.  All these measures 
impart a degree of unpredictability to Korea's tariff regime.  By according vari ed and substantial level 
of protection to selected industries, especially agricu lture, tariffs distort competition and the resultant 
fluctuations in import prices affect not only importers  but also ordinary citizens.  As noted in the 
Secretariat Report, reducing high tariffs would improve Korea's resource allocation and national 
welfare.  We would thus encourage Korea to consider improvements in these areas.  WT/TPR/M/268 
 Page 17 
 
 
  89. On agriculture, other than the very high MF N tariffs (an average of 55% which is much 
higher than the 6.6% average for non-agricultu ral products), domestic support for agricultural 
products remains high, and largely in the form of  production and trade distorting support.  While we 
understand Korea's non-trade concerns (e.g. food security) behind these measures, we encourage 
Korea to step up its efforts in liberalizing and implementing more market oriented policies for the 
agricultural sector. 
90. Bilateral trade in services between Hong Kong,  China and Korea has been growing steadily 
over the past few years, particularly in transpor tation services, travel services and merchanting and 
trade-related services.  We appreciate Korea's in itiative to launch a committee of policymakers and 
experts to coordinate policies to enhance the competitiveness of its services sector, and share the 
Korean Government's remarks in its report that the continued development of the services sector is 
essential for further enhancing the overall competitiveness of other industries.  However, we continue 
to have concern over the big presence of state-owned enterprises and lack of sufficient competition in 
the key services sectors of Korea such as financial and transport services, and also telecommunications services where foreign ownership is still being capped.  We hope the Korean 
Government's initiative to foster greater compe tition in services will make more substantive progress 
in the near future.  
91. As for the WTO services negotiations, we appr eciate Korea's active participation on both the 
market access and rule-making fronts and look forward to conti nual and closer cooperation with 
Korea in achieving our common goal to pursue conti nuous and progressive liberalization in trade in 
services. 
92. Regarding trade facilitation, we commend Korea' s broad trade facilitation efforts by further 
streamlining and modernizing its cu stoms procedures.  Such efforts have resulted in more efficient 
customs clearance and benefited the trade.  We also appreciate Korea's active and constructive 
participation in the WTO negotiations on trade faci litation and look forward to working closely with 
Korea towards a successful conclusion of the negotiations. 
93. On investment, we note that inward FDI re mains low despite the Korean Government's 
favourable attitude towards FDI and its efforts in promoting and attracting FDI.  There has been 
notable improvement in terms of the ease of star ting or doing business in Korea.  However, the 
complexities of registration, notification, licen sing and approval requirements would still seem to 
pose difficulties for foreign investors.  We look forw ard to Korea's continuous efforts in liberalizing 
its investment regime for foreign investors and pr oviding a conducive business environment to attract 
foreign investments. 
94. We are glad that Korea attaches high importance to and will continue to play a constructive 
role in the DDA negotiations.  Both HKC and Korea share the same goal in clarifying and improving 
the WTO disciplines on rules.  We applaud Kore a's active participati on in and constructive 
contributions to the Rules negotiations, and look forward to continuing cooperation with Korea and 
other Members to re-energize and bring the Rules negotiation to a substantive and fruitful conclusion . 
95. We are pleased to note a declining trend of  the number of anti-dumping investigations 
initiated by Korea during the period of review.  As  a matter of principle, we encourage all WTO 
Members to continue to exercise caution and restra int with respect to the use of trade remedies. 
96. On standards and other technical requirements, we note that Korea has been actively engaged 
in the development of mutual recognition agreem ents (MRAs) under the framework of APEC and 
bilateral FTAs with its counterparts.  We appr eciate Korea's efforts in harmonizing its domestic 
standards with international and regional ones, a nd would encourage Korea to continue these efforts 
with a view to facilitating the free flow of trade with its trading partners. WT/TPR/M/268 
Page 18  
 
  NEW ZEALAND 
97. Korea is a key trading partner for New Zealand, our fifth largest, and we take a close interest 
in developments in its trade policy.  Like New Zealand, Korea has been a major beneficiary of the multilateral trading system and its active ro le in WTO processes is to be welcomed. 
98. New Zealand congratulates Korea for its emergenc e from the Global Financial Crisis with a 
solid export performance; now the world's 7
th largest exporter, up from the 12th at the time of the last 
Review in 2008. New Zealand welcomes Korea's c onstructive response to the crisis and recognition 
of the important role of further trade liberaliza tion in contributing to economic recovery.  As the 
global economy recovers it will be important for all Members to refrain from implementing 
protectionist measures and remain committed to trade liberalisation, both in principle and in practice. 
We commend Korea's commitment to trade liberal isation and the strengthening of the multilateral 
trading system, including its efforts to work toward s an eventual successful conclusion of the Doha 
Round negotiations.   
99. Alongside its commitment to the multilateral system Korea has, under the period of Review, 
intensively pursued comprehensive free trade agreem ents with major trading partners or regional 
groups, including the EU and the U.S., and is cont inuing or planning negotiations with many other 
blocs or nations. In this regard New Zealand hopes to conclude bilateral ne gotiations with Korea in 
the near future.  
100. We encourage Korea to build on its demonstr ated commitment to an open economy by 
considering further adjustments to its trade polic y regime.  The Secretariat's report highlights the 
economic downsides caused by trade measures applied by Korea, such as a complex tariff structures 
and administration, and measures targeted at protecting particular sectors.  New Zealand hopes Korea 
will re-examine the way it applies these trade policy instruments.   
101. In particular, New Zealand sees potential for furt her reforms in the agriculture, and fisheries 
sectors.  Agricultural reforms would increase competi tiveness and raise incomes in the rural sector, as 
well as support Korea's broader goals of food secur ity and reduced prices for consumers.  Given 
Korea's importance in global fisheries, we encour age initiatives which reduce fleet capacity and which 
reduce pressure on fisheries that are overfished.  In this context, improved in formation on government 
support to the fishing sector in Korea would be welcomed. 
102. To conclude, the Reports by both Korea and th e Secretariat illustrate Korea's impressive 
performance measured against a broad range of economic and social indicators.  New Zealand 
welcomes Korea's continued commitment to the multilate ral process and to its contribution continuing 
to be commensurate with its impressive record of  economic development. New Zealand looks forward 
to further discussion of the issues we have raised during the course of this review. 
SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU 
103. Considering the serious challenges presented by  the global financial a nd economic crises in 
the period under Review, Korea's recovery and ov erall economic performance has been impressive. 
Its real GDP growth dropped from 5.1% in 2007 to just 0.3% in 2009, but the economy then 
rebounded, with robust domestic dema nd, and GDP growth quickly recovered to 63% in 20l0, before 
settling back to a more modest 3.6% in 2011.  
104. My government would like to congratulate the government of Korea on its action and various 
reforms implemented during the period.  For exampl e, introducing various m acro-prudential measures 
in financial sectors, enhancing transparency a nd accountability in corporate governance, raising the 
productivity of its services industry and stepping  up the implementation and enforcement of  WT/TPR/M/268 
 Page 19 
 
 
  competition rules and policies, seems to have succe eded in giving the economy a welcome injection 
of greater productivity and innovation. 
105. Korea is now the world's 7th largest exporter - particularly strong in such areas as vessel 
parts/ocean structure, petroleum products, semiconduc tors and automobiles. In fact, Korea's economic 
development model is similar to ours and in many wa ys our interests are the same. In the context of 
the WTO, we enjoy a very close working re lationship with Korea and Ambassador CHOI, 
Seokyoung. We are both members of the G-10 grou p and the Friends of Anti-Dumping Negotiations 
(FANs), and we both support efforts to bring the Doha negotiations to an early and balanced 
conclusion. It is no surprise, therefore, to find our negotiating positions almost in parallel. This would 
suggest there is potential for us to form an even  firmer alliance, and to stimulate more trade 
liberalization and reform under the auspices of the WTO.  
106. Our written questions submitted in advance have already identified policy areas of particular 
interest to us, such as: trade facilitation; Korea' s foreign investment regime; government procurement; 
export subsidies;  services;  standards;  testi ng and certification. The responses received from Korea 
are very much appreciated. We have today added a few more questions in writing, on the subject of 
Korea's IPR and telecommunications regulations, a nd we look forward to replies to these in due 
course.  
107. I would just briefly like to touch on the area of Korea's trade policy that is perhaps of greatest 
concern to us. This is foreign investment. The S ecretariat's report says, "Korea's relatively low level 
of FDI may also be due partly to informal as well as  formal barriers to FDI in certain services, such as 
broadcasting, telecommunications, and transportatio n." While the total amount of bilateral trade 
between us and Korea has been growing in recent year s, the trend in bilateral investment is weak, and 
this limits our potential for greater economic coopera tion. Cumulatively to date, our investment in 
Korea adds up to only US$535 million - and Korean investment in us to just US$951 million. We both surely stand to benefit enormously by taki ng specific action to improve this situation. 
CHINA 
108. What it has been achieved by Korea over the past  years is really laudable, as the Secretariat 
Report states, Korea's export-driven economy has rebounded from the global fi nancial crisis that 
erupted around the time of its previous TPR in 2008.   With its successful experiences in coping with 
the Asian currency crisis and its deep integrati on into the multilateral trading system, the Korean 
government responded to the crisis with prompt and effective policies including a fiscal stimulus 
package and a proactive monetary policy, which r esulted in a strong recovery of the economy.  
109. Korea's trade competitiveness has also improve d significantly during the past years. Its 
exports rebounded by 14.7% in 2010 and steadied at 9. 5% in 2011, which brought Korea up to be the 
world's 7
th largest exporter, from 12th in 2008.  We especially appreciate that Korea managed to 
overcome the financial cris is without resorting to restrictive tr ade measures. On the contrary, Korea 
has opened its market further to international tr ade. We also commend that the Korean authorities 
recognize the vital importance of FDI to economic gr owth and structural adjustment and is taking 
more concerted action to improve its invest ment environment to attract more FDI. 
110. On the multilateral stage, Korea is an active participant of the Doha Development Agenda 
negotiations. We share Korea's view that the Doha R ound can play a pivotal role in further improving 
the global trade and investment environment. Ch ina will continue close cooperation with Korea 
towards the conclusion of DDA negotiations.  
111. China and Korea are very important trading part ners to each other. China is Korea's largest 
trading partner, largest export market, largest source of import, and second largest investment WT/TPR/M/268 
Page 20  
 
  destination. And Korea is the third largest tradi ng partner, third largest export market and second 
largest source of import of China. With only five years from 2005 to 2010, the trade volume between China and Korea has doubled from US$100 billion to US$200 billion, achieving two years ahead of schedule the goal of reaching US$200 billion target by 2012 set by our leaders. We are confident that 
through our joint efforts, we could increase our bilateral trade to US$300 billion by 2015. 
112. This year marks the 20
th anniversary of the establishment of diplomatic relations between 
China and Korea.  Looking ahead, we are determin ed to further deepen our strategic cooperative 
partnership.  Just a few months ago, China and Korea started the FTA negotiation with an aim to 
reaching a forward-looking and win-win agreement at an early date.  
113. That being said, there are still some areas in  Korea's trade policy which cause Members' 
concerns. The tariff structure remains relativel y complex and the agriculture sector under high 
protection. We encourage Korea to further improv e its applied tariff quota system and simplify its 
inspection and quarantine procedures. 
CANADA 
114. We congratulate Korea for its outstanding economic growth of the last few years, capped 
in 2011 by its bilateral trade reaching the US$1 trilli on mark.  Canada also congratulates Korea and its 
customs service for their continued commitment to excellence, particularly through the World's Best 
Customs 2012 Plan.   We also applaud the achievements a nd contributions of the Korean Customs 
service for the leading role it h as played in terms of practical  examples and the security of 
international trade. 
115. Korea is Canada's sixth largest export market  and its seventh largest source of imports.  
The level of our bilateral merchandise trade has b een maintained during the global recession, reaching 
C$11.7 billion last year, whereas bilateral trade in services has been above C$1 trillion (sic) for 
several years now.  The fast-growing bilateral direct  investment between Korea and Canada reached a 
level of C$6.4 billion in late 2011.  Korean state-ow ned enterprises are large investors in Canada and 
play a very positive role in the re lationship between the two countries. 
116. Canada and Korea are collaborating to link Asia-Pacific markets to Canada's energy 
resources;  and the increasing presen ce of Korean communities in Ca nada is evidence of investor 
confidence in Canada's transparent, pred ictable and stable investment climate. 
117. Another positive development in  the Canada-Korea bilateral re lationship was the restoration 
of access for Canadian beef earlier this year, followi ng a bilateral settlement that resulted in Canada's 
decision to terminate the WTO panel regarding Measures Affecting the Importation of Bovine Meat 
and Meat Products from Canada .  We look forward to continuing to work with Korea to further re-
establish Canadian beef in the Ko rean market as a safe and high quality product, following an import 
ban of nearly 10 years. 
118. Building on that positive momentum, Canadian and Korean officials have reengaged in 
discussions towards a Free Trade Agreement.  An FTA would strengthen trade and investment ties 
between our two countries.  Indeed, the Canada-K orea economic relationship can be likened to one 
between two mature and dynamic economies. 
119. Canada notes that since the last TPR in 2008, Korea has shown a consis tent and determined 
commitment to global engagement and policy liberal ization by continuing to pursue bilateral FTAs.  
In that vein, Canada encourages Korea to work towards fully embracing the Uruguay Round's market 
access ambitions for some agricultu ral products when current exemptions expire.  The sheer number 
of FTAs, however, has created a confusing tariff system that may cause an excessive regulatory  WT/TPR/M/268 
 Page 21 
 
 
  burden for exporters.  Canada would encourage Kor ea to make efforts to streamline its tariffs to 
improve efficiency and realize cost savings for the consumer.  
120. Canada remains concerned over the high level of agricultural tariffs in Korea, which, by our 
calculations, are actually 1% higher overall than those in  place at the last TPR. We are also concerned 
about under-utilized quotas, even for commodities for which domestic Korean prices are significantly 
higher than world levels.  In some cases, Korea's approach to TRQ administration blocks imports of 
products of the quality and specifications required by Korean processors.   
121. Canada is also troubled by Korea's continued use of non-tariff measures to limit access to its 
market in a variety of areas, including in the automotive sector.  Elimination of non-tariff barriers would be consistent with, and enhance, Korea's aforementione d global engagement and policy 
liberalization.  
122. In closing, Canada would like to commend Korea' s leadership in international economic fora, 
such as the G-20 process and the Busan Partnership for Effective Development Co-operation.  We 
encourage Korea to bring a similarly high leve l of ambition and engagement to its market 
liberalization efforts.  
INDONESIA ON BEHALF OF ASEAN 
123. ASEAN notes from the Secretariat Report that in terms of real GDP, although Korea's growth 
dropped during at the height of the financial crisis, it has rebounded early thanks to a series of prudent 
fiscal measures and steadily risen to where it is t oday. ASEAN would also like to commend Korea for 
its rapid economic recovery without resorting to protectionist measures during the 2008 financial 
crisis. ASEAN would also like to express our appreci ation for Korea's leadership role in forging a 
commitment to the standstill and rollback of protectionist measures on the global stage, including 
during the Seoul G-20 Summit and more recently in Los Cabos.  
124. Korea has also undertaken commendable tr ade facilitative efforts and enhanced the 
transparency and accessibility of its laws by making them available in English on Internet sites maintained by relevant ministries and agencies. Kore a has also put in extensive efforts to strengthen 
its intellectual property rights legislation. We appl aud Korea in her efforts and we can hopefully learn 
from them in the future. 
125. Trade between ASEAN and Korea is significant a nd continues to grow robustly.  Korea is one 
of ASEAN's top five trading partners while ASEA N was Korea's second largest trading partner in 
2010 and 2011.  
126. Key milestones in our economic relations include the ASEAN-Korea Framework Agreement 
on Comprehensive Economic Cooperation conclude d in 2005 and the ASEAN-Korea FTA signed 
in 2010. These agreements have contributed to the increase in two-way trade, with trade jumping to 
US$97 billion in 2010 from US$75 billion in 2009.  
127. Investments between ASEAN and Korea have also grown steadily. ASEAN is a major FDI 
destination for Korea with US$3.8 billion worth of  inward FDI in 2010 alone, more than double the 
US$1.4 billion recorded in 2009, making Korea ASEAN's fourth largest investor in that year. We in 
ASEAN hope that these trends will continue and we  look forward to greater cooperation among our 
countries.  
128. ASEAN is happy to note that Korea remains an  active participant in the multilateral trading 
system and has been supportive of the need to  push forward with the DDA negotiations. ASEAN 
would particularly like to thank Ambassador CHOI Seokyoung, his predecessor Ambassador PARK WT/TPR/M/268 
Page 22  
 
  Sang-ki and the Korean delegation for their tir eless efforts and constructive engagement with 
delegations, including individual A SEAN Members, here in Geneva. 
SINGAPORE 
129. Singapore and Korea enjoy a robust bilateral rela tionship, underscored by strong political and 
economic ties. We are alike in many respects, of which one key aspect is that we are both 
fundamentally dependent on a strong, transparent and open rules-based trading system to survive.  
The Korea-Singapore FTA, which entered into for ce in March 2006, is Korea's second FTA after 
Chile.  Since its inception, bilateral trade has st eadily increased, reaching US$29.8 billion in 2011, up 
by 134.2% since the last period under Review.  Last year, Singapore was Korea's 9
th largest trading 
partner while Korea's was Singapore's 7th largest trading partner, if one excludes regional blocs.  
Singapore and Korea also enjoy close economic lin kages under ASEAN which is now Korea's second 
largest trading partner, with trade totaling US$125 billion in 2011.  Singapore has cumulative 
investments of around $3 billion in Korea, while Korea has investments of $3.7 billion in Singapore 
as of end-2010.  
130. We congratulate Korea on its speedy recovery  from the global financial crisis of 2008.  
Korea's economy managed to bounce back as early as 2009 while many other countries were still in 
the midst of crisis.  This was primarily a result of  the prudent fiscal and monetary policies pursued by 
Korea's government, including a 38.8 trillion Korean W on stimulus in 2009, in tandem with continued 
trade liberalization and measures to facilitate trade.   It is laudable that despite the crisis, Korea did 
not resort to trade restrictive measures.  Singapore recognizes Korea's role in keeping protectionism at 
bay through the initiative to adopt a "standstill commi tment", at the G-20, consistently since the 
Washington Summit in 2008, through its chairmansh ip in Seoul in 2010 and most recently in Los 
Cabos.  Indeed, this commitment to the standstill a nd rollback of protectionist measures continues to 
be vital at a time of continued market uncertainty  and a rise in protectionist tendencies.  Korea's 
steadfast commitment to the multilateral trading system  has clearly reaped significant benefits for its 
economy, with Korea rising to become the world's 7th largest exporter, 9th largest importer, 15th largest 
economy.  Korea also moved up from 15th to 8th in the World Bank's Ease of Doing Business Report  
in 2012.  These are impressive statistics.  
131. Here in Geneva, Singapore looks forward to cooperating with Korea in areas of common 
interest including bringing tangible progress to Tr ade Facilitation negotiations and ITA expansion to 
reflect global patterns of trade and development.  We  also look forward to working together to ensure 
high standards in IPR across various fora including  in TRIPS, WIPO and ACTA. As mandated by our 
Ministers at MC8, Korea's support to exploring fre sh and credible approaches in moving the Doha 
Development Agenda forward is also appreciated.   
132. Korea is also a close partner in the WT O Plurilateral Agreement on Government 
Procurement.  In this respect, the Secretariat Report has observed that "some government procurement 
is still not covered by Korea's multilateral commitm ents under the GPA" and that "foreign suppliers 
appear to be losing ground".  We hope that Kor ea can work to facilitate acc ess for foreign suppliers.   
We are heartened to note that there has been a re duction in anti-dumping cases initiated by Korea to 
18 in this period of review, versus  47 in the period reviewed at Korea's last TPR in 2008. We hope to 
see Korea continue in this positive direction of be ing more selective in its use of anti-dumping 
measures. We also applaud Korea's commitments  under President Lee Myung-bak's Low Carbon 
Green Growth Strategy to cut its GHG emissions by 30% from business-as-usual levels by 2020. 
PAKISTAN 
133. Since its last Trade Policy Review in 2008, Kor ea has continued with its impressive record of 
progress notwithstanding the global economic crisis of 2008, underpinned by prudent macroeconomic  WT/TPR/M/268 
 Page 23 
 
 
  policies together with ongoing structural reforms. In  spite of deteriorating terms of trade, and falling 
investment, Korea has been able to restore growth  in real GDP and exports. The period under Review 
is characterized by Korea's active role at the gl obal level, reflected in hosting the G-20 Summit in 
2010, initiatives as the "standstill" commitment, which it has extended until 2014 refrain from 
protection. Korea has also implemented several  reforms to address weaknesses in its economy. 
Another prominent feature is its notable progress in  concluding FTAs, which are for the most part 
"WTO plus".  
134. However, several persisting vulnerabilities ar e noted in the Korean economy including 
currency volatility, growth of shor t term foreign debts in the banki ng system, and vulnerability of its 
export oriented economy due to drop in foreign demand. Some services sectors, e.g. tourism and 
business services have been posting large deficit, due  to which it has launched a "Services Industry 
Development Plan". Korea is also taking vigorous measures to boost investment  as its inward FDI is 
among the lowest in OECD. The decline in inward FDI in relation to GDP is inconsistent with 
openness of the economy.  It is also making serious efforts towards green growth, e.g. cutting 30% of GHG emissions by 2020. It is a matter of some concern that its customs tariffs continue to be 
complex, having a multiplicity of rates. Its "flexi ble tariffs" raise questions about market access 
predictability and openness.  Its peak ad valore m rates are high and remain concentrated in 
agriculture. Korea's share of non-harmonized standard s has increased consider ably and, as noted by 
the Secretariat Report, its market concentration also remains high.  
135. Korea continues to play an active role in th e Doha Round negotiations, and has been giving 
primacy to the MTS, complemented with regiona l cooperation. It is also a major donor for WTO 
TRTA and Aid for Trade. Korea had made effo rts to implement WTO commitments on government 
procurement and IPRs, and has take n unilateral measures to further liberalize trade in services. It has 
also improved preferential access unilaterally for LDCs, and increased tec hnical assistance activities 
for various WTO activities. However, in view of it s heightened bilateral liberalization (its simple 
average MFN tariff rate at 13.3% falls to 6.3% fo r FTA partners), Korea's efforts to contribute at 
multilateral liberalization would be welcome as its liber alisation at the bilateral level poses a distinct 
disadvantage to non-FTA, excluded partners.  
136. Bilateral trade between Pakistan and Korea re mains at much below the potential of both the 
countries. The total trade between the two c ountries increased from US$845.2 million in 2006-07 to 
US$1.088 million in 2010-11, with the trade balance is  in favour of Korea. Pakistan looks forward to 
enhancing trade and economic  cooperation with Korea.  I hope that Korea would be able to deal with 
the challenges arising from the current global economic s ituation, and to play an even vigorous role in 
the WTO's multilateral agenda.  
MEXICO 
137. Today we consider Korea's sixth trade policy review with great interest, given that country's 
major role in the international economy and world trade.  Evidence of this includes the recovery 
capacity of its export sector, which has risen from 12
th to seventh in the world ranking in just three 
years.  It has become the third largest trading partner for China and Japan, and the seventh for the 
United States;  it is Asia's largest oil exporter and the world's largest shipbuild er;  it records the fastest 
growth of patent registration in the world;  and in just three years its international reserves rose 
by 50%, from US$200 billion in 2008 to US$300 b illion in 2011, equivalent to seven months' 
imports. 
138. Korea's amazing recovery would have been impossible without sound macroeconomic and 
supporting financial policies, including greater fiscal st imulus.  All of this occurred without resorting 
to trade restrictions. WT/TPR/M/268 
Page 24  
 
  139. The economic challenges facing Korea include its external vulnerability, which it could 
reduce by adopting measures to strengthen domes tic demand (such as the recently announced 
US$5.2 billion stimulus package, which includes lower taxes on income and household consumption). 
140. It also faces the problem of a rapidly ageing population.  According to the OECD, while 5.9% 
of Koreans were over 65 years of age in 1995, today the proportion has practically doubled and it is 
projected to climb to over 35% in 2050.  This means that the ratio of retirees to employed people will 
exert major pressure on public pension and social secu rity spending.  Given th is outlook, it will be 
important for Korea to promote women's participa tion in the economy and relax its migration policy 
to boost labour supply. 
141. Another challenge stems from the fact that, d espite eliminating more restrictions on foreign 
direct investment than any other OECD country si nce 2007, Korea has been unable to grow its share 
of global FDI.  This is partly because of th e restrictions it imposes in key sectors such as 
telecommunications, air and maritime transport, a nd the ban on foreign ownership in the radio and 
television sector. 
142. In terms of trade policy as such, Korea has a complex tariff system, which 
includes 84 different ad valorem rates and 46 alternatives, as we ll as adjustment duties known as 
"flexible tariffs", which can vary between their applied and bound levels, thereby generating major 
uncertainty for 334 products. 
143. Korea's average most-favoured-nation (MFN) tari ff is one of the highest in the OECD, having 
risen to 13.3% in 2011.  Its ad valorem tariffs fluctuate generally between 0 and 887%, whereas the 
non-ad valorem  equivalents can rise as high as 1,506%. 
144. We are also surprised to learn that, whereas, in 2007, 99.9% of Korean standards that have 
correspondences with international standards (ISO and CEI) had been harmonized, in late 2010 the 
figure had fallen to 60%.  This clearly causes major uncertainty among trade partners. 
145. Korea's agriculture sector faces many challenges,  particularly low labour productivity, caused 
among other things by the excessive protection pr ovided to the sector, through tariffs and direct 
support.  Domestic producer support for agriculture is practically equivalent to the sector's GDP share 
(2.2% compared to 2.7%, respectively), and its ta riff protection is eight times greater than that 
received by industrial products. 
146. Among other effects, this means that Korean c onsumers pay 1.7 times more than international 
prices. 
147. On the other hand, Korea's trade facilitati on policy, which has involved simplifying and 
modernizing its customs procedures, should be welcomed, as should the strengthening of its 
intellectual property rights - both developments driven mainly by the implementation of its 
international commitments. 
INDIA 
148. India and Korea share strong economic ties based on a strategic partnership, that provides a 
firm foundation for further growth and development in our bilateral relations. In 2009, India signed a 
Comprehensive Economic Partnershi p Agreement (CEPA) with Korea which came into effect in 
January 2010. This Agreement forms the basis for cooperation in a vast range of sectors. After the 
implementation of CEPA, our bilateral trade has seen  a quantum jump of roughly 65% in two years, 
reaching US$17.4 billion in 2011-12. We recognize th at this is well below the huge untapped 
potential for further economic coope ration between the two countries. Therefore, during the visit of  WT/TPR/M/268 
 Page 25 
 
 
  Prime Minister Manmohan Singh to Korea in March this year, both sides agreed to raise bilateral 
trade to US$40 billion by 2015. It was also agreed  to accelerate work in progress to upgrade the 
CEPA and make it more ambitious.  
149. Korean companies were among the early investors in India after we opened our economy 
in 1991.  Brands like LG and Samsung are household names in India. Hyundai has a 25% market 
share in India's domestic car industry. We hope to see small and medium sized Korean companies 
also making India their base for manufacturi ng. Since April 2000, Korea has invested 
US$1.114 billion in India making it our 13th largest investor covering projects in iron & steel, power, 
construction, telecom & automobiles. Indian comp anies too have invested over US$1 billion in Korea 
in the areas of aluminum rolled products, vehicles, plastics and yarn. 
150. Korea's remarkable transformation fro m an LDC into (a) the world's 7th largest exporter and 
9th largest importer, with a total trade turnover of over US$1 trillion, and (b) a major source of FDI for 
the rest of the world, places Korea in a unique pos ition to share its developm ent experience with other 
developing countries. We look forward to working w ith Korea to further enhance our cooperation to 
mutual benefit. 
151. The Korean economy has performed remarkably  well during the period under review despite 
the global financial crisis. We congratulate the Government of Korea for skillfully steering the 
economy through the downturn which saw its growth rate  drop to 0.3% in 2009. With the revival of 
world trade, and a judicious mix of monetary and fiscal policies, including a large fiscal stimulus, Korea was able to make a quick recovery, recording a growth of over 6% in 2010 and 3.6% in 2012.  
152. This admirable performance, however, has brought to the fore, the continuing vulnerability of 
the Korean economy to external shoc ks because of its strong export or ientation and financial linkages. 
Exports of goods and services account for 56% of Ko rea's GDP with manufacturers making up bulk 
of the exports. The Secretariat report highlights some of these imbalances in the Korean economy, 
including the excessive dependence on exports, ri sing income inequalities, domination of large 
business conglomerates vis-à-vis  small and medium enterprises, and the demographic imbalance.  
153. We appreciate the determined efforts of th e Korean government to address these challenges 
through an array of reforms aimed at enhancing ec onomic efficiency, market discipline, transparency 
and fair competition, promoting SMEs, the services sector and undertaking labour market reforms. Steps to promote inward FDI, through a policy of liberalization, incentives and a business friendly 
environment, have resulted in an inflow of US $13 billion in 2011. We commend Korea's commitment 
to enhancing its Development Assistance and the extension of duty free access to imports from LDCs. 
Its wide ranging trade facilitation measures and effort s to strengthen its IPR legislation also deserve 
appreciation. 
154. However, the relative complexity of Korea' s 2012 customs tariff involving a multiplicity of 
rates, as highlighted by the Secretariat report, re mains an area of concern. Increase in the average 
applied MFN tariff rate from 12.6% in 2011 to 13. 3% in 2012, requiring tariff concessions and draw 
backs, has added to the complexity of border taxation. Despite being a votary of standstill 
commitment, Korea has continued to raise its MFN duties. Peak ad valorem rates have remained 
unchanged and concentrated in agricultural items. Ta riff rate quotas are in place with wide variation 
in the in-quota and out of quota tariffs. We encourag e Korea to simplify its tariff structure with a view 
to providing greater predictability.  
155. Further, it is noted that Korea has several pr ivate bodies performing standardization related 
tasks. The share of standards not harmonized with international standards has increased considerably 
and the number of mandatory standards increased by  about 70%. It would be helpful to understand the WT/TPR/M/268 
Page 26  
 
  role of the private standard setting bodies and how  Korea ensures that these private bodies follow the 
principles of standard setting enunciated in the TBT Committee.     
CHILE 
156. This year marks the 50
th anniversary of diplomatic relations  between Chile and Korea, and the 
eighth year since the bilateral FTA between our tw o countries entered into force.  Chile and Korea 
maintain close trading relations which have been strengthened by the FTA.  Not only was this Chile's 
first trade agreement with an Asia n country and Korea's first compre hensive free trade agreement, but 
it was also the first between an Asian and non-Asian economy, and the first trans-Pacific 
trade agreement. 
157. The agreement has made it possible to maintain  fluid and institutionalized relations between 
both parties, which has resulted in a deepening of  trade relations, as confirmed in the two visits 
Chilean presidents have made to Korea, in 2009 and 2012, and in the Korean President's visit to Chile 
last June. 
158. In terms of bilateral trade, in 2011 Korea was th e fifth most important destination for  Chilean 
exports and its third-ranked trading partner in th e Asia-Pacific region.  Despite the crisis, trade 
between Chile and Korea h as increased since the latter's previous  TPR in 2008.  For example, Chilean 
exports have risen from US$3,241 million to US$, 4488 million since 2009, while imports from Korea 
rose from US$2,079 million to US$2,510 million in the sa me period.  Chile's e xports consisted mainly 
of mining products, especially copper, while imports from Korea were led by automobiles and mobile 
phones. 
159. Nonetheless, we are concerned that several aspect s of Korea's trade policy affect the fluidity 
of trade and are not beneficial for free trade or competition:  firstly, the decision to restrict 
information on importing firms, which until recently w as available on the Internet.  This makes it hard 
for firms to do business and obtain information that is  crucial for effectively promoting and marketing 
their products in Korea.  Lacking such informa tion makes it is complex and expensive for foreign 
producers to identify Korea's main importers. 
160. Secondly, as noted above, processes of health certification and authorization for crop and 
livestock products to enter Korea are extremely lengthy and complex, and also insufficiently 
transparent.  One of these processe s has about eight different stages, which are unclear and certainly 
cumbersome, without necessarily reflecting scientific and technical criteria. 
161. Nonetheless, we are sure Korea will lower these  barriers, because, like Chile, it has supported 
trading relations based on clear and predictable ru les, with negotiation and dialogue seen as the most 
effective way to promote trade.  This has been  shown in the WTO and in other multilateral trade 
forums that we share with Korea, such as APEC. 
162. Finally, there is a famous Korean proverb that can be applied to Korea and its behavior in the 
context of a rule based system like WTO. The adage says "Beans come out  from where beans are 
planted, and red beans come out from where red beans are planted." 
PHILIPPINES 
163. For over 60 years, the Philippines and Korea nurtured our friendship and lives on to this day 
in the form of deeper and more comprehensiv e cooperation in diverse areas including political 
dialogue, economic cooperation and people to peopl e exchanges. This relationship is further 
highlighted by the recent visit of Philippine's, Fore ign Affairs Secretary Albert F. del Rosario with  WT/TPR/M/268 
 Page 27 
 
 
  Korean Prime Minister Kim Hwang-sik and Foreign Mi nister Kim Sung-hwan in Seoul last month, to 
discuss ways to improve an already vibrant relationship between the Philippines and Korea. 
164. In 2011, Korea was the sixth biggest trading part ner of the Philippines while the Philippines is 
Korea's third most attractive investment destinati on in South East Asia. Korea is the Philippines' 
primary source of visitors who are mostly students  attending short-term Eng lish language courses. By 
December 2012, the Philippines expect to welcom e its one-millionth Korean visitor for the year, 
contributing to almost a quarter of total tourist arrival to the country.  
165. From the last TPR of Korea in 2008, when the global financial crisis erupted, Korea's export 
driven economy still managed to rebound register ing a substantial overall current account surplus 
averaging roughly 23% of its GDP during the review pe riod.  According to the Secretariat Report, the 
rebound was largely achieved without resorting to restrictive trade measure s. Korea has instead 
opened its market further to international tr ade through major bilateral trade agreements. 
166. If Korea believes in the power of numbers, seven is its lucky number. Since its last TPR, it 
has become the world's 7th largest exporter up from l2th, and as far as foreign exchange reserve 
holdings are concerned, it is the 7th largest in the world with over US$300 billion in 2011, equivalent 
to nearly seven months of imports. 
167. Korea has transformed itself from the Land of th e Morning Calm to the Miracle of the Han 
River. It has achieved economic development and democratization, way above expectations. Korea 
was once an aid recipient, but it is now a donor country and a member of the 20-50 Club. The launching on 13 August 2012 of the "Development  Alliance Korea", the first cooperative network 
between the government and various private partners  in the field of overseas grant aid is another 
milestone in this area.  
168. The Secretariat Report lauded Korea's wide-ra nging trade facilitation efforts by further 
streamlining and modernizing its fully computer ized, user friendly customs procedures. The 
Philippines, being one of the active agricultural fresh product exporters to Korea welcomes this 
significant development which imparts a great degr ee of predictability and transparency in doing 
business.  
169. On the implementation of its trade policy fra mework, the Philippines appreciates the support 
and commitment that Korea attaches to the strengthening of the multilateral trading system and the successful conclusion of the Doha Round negotiations. 
PERU 
170. Along with the Republic of Korea, we believe in  the benefits of multilateralism and trade as 
one of the engines of economic and social developm ent, which led that great nation to multiply its 
GDP by 241.5 since 1967 and its fore ign trade by 820;  and we also put a high priority on successful 
completion of the WTO's Doha Development Round. 
171. In terms of inter-governmental forums, both c ountries have used the Asia Pacific Economic 
Cooperation Forum (APEC) to promote free and open trade, including trade in services and 
investments, for developing countries in 2020. 
172. At the bilateral level, last May the Presidents of Peru and Korea agreed to upgrade bilateral 
relations to the level of "comprehensive strate gic partnership", which will boost political ties and 
cooperation in economics, trade and technology, among other areas.  Within this framework, 
yesterday in the CRTA, the Republic of Korea and Pe ru reviewed our bilateral trade agreement in the 
framework of the WTO's Transparency M echanism for Regional Trade Agreements. WT/TPR/M/268 
Page 28  
 
  173. In 2011, when the Agreement came into fo rce, the trade flow with Korea surpassed 
US$3,191 million - up by 65% on the previous year's figure, making Korea Peru's ninth largest trade partner worldwide, and its third most important pa rtner in Asia, after China and Japan.  Peruvian 
exports grew by 89%, particularly non-traditional ex ports (101%);  and, within these, the agriculture, 
fishing, textile, chemicals, and steel-metallurgy sect ors stood out for their growth rate and market 
share. 
174.  Korea is also a major source of investment and cooperation for Peru.  Indeed, Peru ranks 
second in Latin America as a destination for Korean investment, which chiefly concerns gas transport, 
but also involves the business, finance and industrial sect ors.  Peru is also one of the main recipients 
of technical cooperation in the Latin American  area under the programmes administered by the 
Korean Government agency KOICA. 
175. In relation to its trade policies, we welcome the elimination of anti-competitive provisions 
contained in its competition laws and regulations, as well as the strengthening of laws on intellectual 
property protection.  Nonetheless, as noted in th e Secretariat Report, state involvement in the 
economy persists, which includes the payment of dir ect export subsidies to reduce marketing costs for 
certain agricultural products.  We therefore ur ge Korea to continue improving these aspects. 
176. On this occasion, our delegation has raised a number of specific questions relating to 
measures to reduce the fishing fleet, self-regulation of coastal fisheries, development assistance for 
deep sea fishing and grants and/or loans under favourable conditions for the processing of 
fish products - as well as the Basic Agricultural a nd Rural Development Plan for 2008-2013 and the 
Trade Adjustment Support Law, and how these are a ligned with the provisions of Article 6 of the 
Agriculture Agreement in relation to domestic support commitments. 
COSTA RICA 
 
177. We are pleased to participate in this trad e policy review of a Member country, Korea, 
which has demonstrated its commitment to the multila teral trading system and the WTO.  Costa Rica 
wishes to acknowledge the outstanding role played by  Korea and its delegation in Geneva at the WTO 
and the Doha Round, as well as in the NAMA negotiati ons, services, review of the dispute settlement 
understanding, or trade facilitation. 
178. Korea is an important trade partner for Costa Ri ca.  Accordingly, and as an important step in 
strengthening and consolid ating our trade and investment relations , the Presidents of the two countries 
meeting in Seoul last August for the 50
th anniversary of the establishm ent of diplomatic relations, 
agreed to work together to complete a free-tr ade treaty between Korea, Costa Rica and several 
Central American countries, for which the viability st udy has now been completed.  We hope that the 
negotiations will be launched and the tr ade agreement concluded very soon. 
179. We congratulate Korea on its speedy recovery fro m the global crisis and for its fight against 
protectionism.  We are also pleased that it has joined the OECD's Development Assistance Committee 
(DAC), and welcome the commitment it has shown to development assistance and the WTO's trade 
support programme. 
180. We would like to highlight the role of tr ade in the Korean economy and its place as the 
world's seventh largest exporter and 10th importe r.  We would also like to acknowledge its 
application of trade facilitation policies through the modernization of computerization of its customs 
procedures.  These are an example for other WT O members, so we hope Korea will share its 
experience in this domain.  WT/TPR/M/268 
 Page 29 
 
 
  181. As for the less positive aspects of its trade policy,  my delegation is concerned at the apparent 
complexity of the tariff applied in Korea and its unpredictability, caused by the difference between the 
average applied and bound tariff.  We also c oncerned at the, albeit limited, use of non- ad-valorem  
tariffs, which generate very sharp tariff peaks for certain products, as well as an increase in the 
number of products subject to flexible tariffs.  Th e agriculture sector also receives high levels of 
protection, with an average tariff of 55%, eight ti mes above the average for other products, despite its 
declining share of GDP.  We would like to hear Korea's plans to continue liberalizing the sector. 
182. We would encourage Korea to abide by internatio nal rules on technical standards.  In this 
regard, we are concerned that the proporti on of non-harmonized standards has increased, 
despite efforts to adapt them to international ru les.  We would therefore like to know the results 
obtained from the signing of bilateral memoranda  of understanding on mutual cooperation in 
standardization activities with 46 organizations from 33 countries. 
JAPAN 
183. I would like to begin with the Korean macroe conomic environment and policies. According 
to the Secretariat Report, the global financial cr isis in 2008 caused a sharp fall in the Korean 
economy. In this context, Japan truly commends th at Korea, became one of the first countries among 
OECD members to record positive economic growth in  2009. Korea also achieved 6.3% of real GDP 
growth in 2010. These achievements were the r esults of their large fiscal stimulus, accommodative 
monetary policy and robust expansion of exports through the promotion of trade liberalization. Korea 
continued modest fiscal surpluses in 2010 and 201 1 with low central government debt, which was 
31.9% of GDP in 2010. Japan also highly comme nds that the sound fiscal situation of Korea. 
184. Generally speaking, the Korean economy is esti mated to be sound for the future. However, 
the Secretariat Report points out some challenges, for example, the improvement of the investment climate, the maintenance of the labour force which is  declining due to a rapidly aging population, and 
the necessity to improve productivity in services and energy sectors. Korea also faces challenges due 
to the global economic slowdown. The growth rate  was at 3.6% in 2011, and further slowdown is 
expected this year. Japan is closely monitoring the efforts of the Korean government to overcome 
such difficulties. 
185. Now let me move to trade and trade-related polic ies. Here, we have one general point and six 
specific points. Let me start with the general point. Japan appreciates Korea's commitments to 
maintain and to strengthen the multilateral free trade system in the WTO. In addition, contrary to 
some countries which have introduced protectionist me asures after the global financial crisis, Korea is 
promoting trade liberalization by concluding FTAs with  its major trading partners, including the U.S. 
and the EU. We understand that such open policy h as generated an increase in trade and, thus, the 
strong growth of the Korean economy. 
186. Now I would like to turn to some specific point s. Those are related to investment, SPS, TBT, 
customs, broadcasting services and intellectual pr operty rights.  First, on investment, Japan 
appreciates various policies and measures to attrac t foreign investment, including the role that has 
been played by a foreign investment ombudsma n which is well functioned to help foreign 
corporations to conduct business in Korea by solving problems they are facing. 
187. Second, regarding SPS, with regard to safet y measures recently applied after Fukushima 
nuclear power plant incident in Japan in 2011 to certain food products imported from Japan, we are hoping for some specific improvement soon on the basis of scientific principles.  Third, with regard to 
TBT, we have raised questions about the relaxati on of environment and safety standards on certain 
amounts of imported automobiles under the Kor ea-US FTA. Since we have some doubts on the WT/TPR/M/268 
Page 30  
 
  necessity and the WTO consistency on these measur es, Japan hopes that Korea clarifies those 
measures and explain us the cons istency on the WTO agreement. 
188. Fourth, the Secretariat Report points out the issue of customs duties and procedures related 
with the complexity of customs tariffs. We have con cerns on this problem, one of the problems is that 
it is often difficult to obtain detailed informa tion about the calculation method and the actual amount 
of drawbacks on the imported products for re-e xport. We are expecting the improvement of 
transparency including the discl osure of such information. 
189. Fifth, according to the Secretariat Report, Ko rea's main policy goals are to guarantee the 
freedom of broadcasting so as to strengthen inte rnational competitiveness. However, Korea has not 
opened their terrestrial broadcasting to Japanese dramas and variety programs. Korean dramas are 
actually making a significant percentage of terr estrial and other broadcasting programs in many 
countries including Japan attracting many viewers, in particular female viewers. It is time for Korean 
government to reconsider those measures for the di rection of bringing it into conformity with the 
WTO rules. 
190. Finally, concerning intellectual property ri ghts, Japan appreciates that Korea attaches 
importance to the protection of IPR and its active role in building up relevant legislations. For 
example, Korea recently signed the Anti-Counterfe iting Trade Agreement (ACTA), and also made 
relevant commitments in FTAs for the various tr ading partners. Neverthe less, counterfeit goods are 
often found in Korea, causing damages to many fo reign companies. Japan encourages the government 
of Korea to address more effectively the spread of these counterfeit goods. 
191. Given the increasing influence of Korea in the global economy, stronger attention is now 
being paid to Korea's challenges to tackle the probl ems at the time of uncertainties. Also Korea is a 
very important neighbour for Japan and the bila teral business relationship to Korea and Japan is 
rapidly increasing. 
INDONESIA 
192. I would like to take this opportunity to share that  since the signing of a strategic partnership in 
December 2006, Indonesia-Korea bilateral trade and i nvestment have reached an unprecedented level.  
Trade volume has increased threefold from $10 b illion in 2007 to $30.8 billion in 2011.  Our 
governments have also agreed to boost the trade volume between the two countries to $50 billion by 
2015 and to $100 billion by 2020. 
193. Korean investment in Indonesia amounted to $1.2 billion in 2011, placing Korea the fifth-
largest foreign state investor in Indonesia.  Curre ntly, there are about 1,500 Korean companies operate 
in Indonesia and generate employment.  Thus, Indon esia views Korea as an important partner for its 
significant capital and high technology.  I have every confidence that our important economic 
partnership will continue to fu rther develop in the future. 
194. Korea's trade and domestic reform policy reflects its commitment to the open and rules-based 
multilateral trading system embodied in the WTO.  It is indicated among others by the open trade 
regime with relatively low tariffs and few non-tari ff barriers to trade which was instrumental to 
achieve solid economic growth.  Indonesia believes that the contribution of Korea in taking part 
constructively to explore various approaches help to  move the DDA negotiations forward, as agreed at 
the MC8 in December 2011. 
195. Indonesia thanks Korea for the written responses on our list of questions submitted through 
the Secretariat.  In this junction, by referring to th e list, I would like to seek further clarifications on  WT/TPR/M/268 
 Page 31 
 
 
  the tax incentives, import permits for mango, level of standards, green industry policy, traceability 
system and labeling scheme. 
196. In our view, Korea's labeling requirements th at appear to exceed those of the Codex 
Alimentarius general standard will create difficulties for importers to meet with the requirements.  
Therefore, to avoid unnecessary obstacles to inte rnational trade, Indonesia sees the importance of 
making adjustment, so it shall not be more trade-re strictive than necessary as required by international 
standards.  In this context, we look forward to c ontinue discussions at various  levels and in various 
fora to review and seek solutions to the different issues at hand.  
EUROPEAN UNION 
197. Korea has undergone an impressive development and transformation in the last decades. It 
has sailed remarkably well through the 2008 financ ial and economic crisis, probably because of the 
very hard learning process from the 1997-98 Asian crisis for Korea and for the whole region at the time. As the Secretariat report stresses, the polici es adopted by Korea included in 2009 the adoption 
of the largest fiscal stimulus (as a share of GDP) among the 26 OECD countries. In addition, the recovery was supported by the revival of trade wo rld-wide and by the strong demand originating from 
China. During the crisis, Korea h as also played a remarkably active role on the global economic stage, 
being at the forefront of the international efforts to keep protectionism at bay, including through the 
initiative to adopt the "standstill" commitment at the G-20 Washington Summit in 2008. This G-20 commitment was confirmed and extended at the following G-20 Summits.  
198. Korea has also been a supporter of strong open and rules-based multilateral trading system 
anchored by the WTO. Korea has continuously supp orted constructive efforts towards the conclusion 
of the DDA negotiations. The EU appreciates the gove rnment's commitments to open and fair trade 
and its growing role on the international st age as a major economic power with increased 
responsibilities. For example, since it is a member of  the OECD DAC, Korea has raised its profile in 
terms of donor in particular in the area of aid for trade. Korea also hosted the Fourth High Level 
Forum on Aid Effectiveness in December 2011.  
199. Generally speaking, the economy continues to  be outward oriented. Korea is now the 
12
th  largest economy in the world. Whereas Korea is a ma jor exporter of capital, inward foreign direct 
investment continues to be among the lowest in re lation to GDP in OECD countries, despite generous 
incentives and recent improvements in the ease of doing business. The EU is of the view that this 
situation regarding inward investment does not matc h Korea's potential. For its part, the EU remains 
the largest investor in Korea both in cumulativ e and yearly terms (with FDI flows reaching a 
cumulative total of more than 44 billion Euros by 2011). 
200. The EU's relationship with Korea has made great strides over the past two years on all aspects 
The EU ranks as Korea's third major trading partne r while Korea is the EU's  tenth largest trading 
partner.  Despite the strong economic and trad e slowdown in 2008-09, EU trade with Korea has 
shown an annual average growth rate of 5% between 2003 and 2011. Since 1 July 2012, a 
comprehensive and far-reaching Free Trade Agreement is  applied between the EU and Korea. This is 
a very important step for the EU as this FTA is the most comprehensive agreement the EU has ever 
completed. The EU-Korea FTA provides for the elimin ation of import duties on nearly all products, it 
sets reaching liberalisation of trade in services and in  industrial sectors. It also sets strong disciplines 
in key areas for business such as intellectual property rights, public procurem ent, competition policy, 
transparency in regulation, strengthened co-ope ration in customs and SPS matters and technical 
barriers to trade. Specific commitments on no n-tariff barriers in sectors such as automotive, 
pharmaceuticals and electronics have been agre ed. Comprehensive provisions on sustainable 
development have been included. Finally, the ag reement includes a Cultural Cooperation protocol 
building on the UNESCO. WT/TPR/M/268 
Page 32  
 
  201. I would like to highlight some of the concerns the EU has. Other important issues are raised 
in the list of questions that we sent in advance to this  meeting.  In general, we  would like to encourage 
Korea to further extend its efforts to align industr ial standards with international standards in all 
sectors, to facilitate the certification procedures fo r traded goods, by e.g. extending the acceptation of 
self-certification by foreign companies, or at  least by accepting certification carried out by 
independent certification bodies in third countries.  
202. Secondly, we would be interested to get more information about the restrictions introduced in 
the last years in respect to retail and wholesale ou tlets above certain size.  Finally, I would like to 
point out that the EU remains concerned of the situ ation that some main trading partners are allowed 
to export beef to Korea, and others are not, even if the countries carry the same OIE-determined risk 
status. Most European countries have been recogni sed as having a controlled BSE risk in accordance 
with OIE guidelines. In this context, the EU would like to know when Korea is planning to allow the 
imports of beef from the EU, pursuant to the principl e of non-discrimination.  To  conclude, let me just 
say that the EU looks forward to today's exercise as an excellent opportunity for information on Korean trade and economic policy and clar ification of certain trade measures. 
COLOMBIA 
203. The Secretariat Report states that, during the review period the Korea economy rebounded 
strongly from the 2008 crisis;  and it notes that the measures adopted to counter the crisis did not 
restrict trade.  On the contrary, Korea continue d to open up its markets through bilateral trade  
agreements, which, among other th ings, fuelled an increase in exports to make it the world's  
seventh largest exporter in 2010. 
204. In terms of the main economic va riables, inflation has remained low, meeting the target set by 
the Government;  and, like exports, GDP growth  has trending upwards.  Sound policy management 
has resulted in a fiscal surplus and a currently mode rate level of central gove rnment debt, a situation 
that has contributed to a current account surplus. 
205. Korea remains one of the world's most open economies, oriented towards foreign trade, 
mainly in goods.  Its main export destinations ha ve shifted somewhat towards China.  Nonetheless, 
FDI flows are quite small compared to those of  other OECD countries.  Despite incentives and 
government policies designed to attract investment , factors such as the costs of doing business 
in Korea, restrictions on foreign participation in  various sectors of the economy, and the country's 
geopolitical situation could be damaging the investment climate. 
206. Although services account for the largest share of the country's economy, productivity is low 
compared to the manufacturing sector so incomes are also lower.  This situation is probably explained 
by government policies that have  tended to benefit the manufacturing sector more than services. 
207. The tariff remains relatively complex, with multip le rates, and there were no reductions in the 
review period.  On the contrary, the average of MFN applied tariffs rose from 12.6% in 2011 
to 13.3% in 2012, which is high by OECD standards. 
208. The Secretariat Report notes that Korea's tr ade policy has evolved positively on several 
fronts:  continuing efforts to post domestic regulati ons on the public Internet sites of the relevant 
governmental organizations, including in Englis h - although problems persist with secondary 
regulation which is not available in English;  the issuance of new industrial regulations in line with 
international standards - despite an increase in the number of non-harmonized regulations and 
compulsory requirements;  the adoption of pro- competitive measures and reduction in the power of 
monopolies - although market concentration remains hi gh;  the presentation of numerous notifications  WT/TPR/M/268 
 Page 33 
 
 
  - in contrast to significant backwardness in cer tain areas, such as government procurement, 
special safeguards and export subsidies for agricultural products. 
209. Lastly, we draw attention to the implementa tion of the National Programme for Ecological 
Growth with Low Carbon Emissions, which aims to  achieve economic growth while respecting the 
environment.  This initiative, which would be the fi rst to be adopted as a national strategy anywhere 
in the world, will hopefully bear fruit and can be used as a benchmark for other countries, given the 
challenge facing the world in protecting the envi ronment.  As President Lee Myung-bak has argued 
"Green growth is the path to follow". 
THAILAND 
210. Korea is a world leading exporting economy ranking as the world's seventh largest exporter. 
Her export-driven economy has impressively reb ounded from the global economic crisis, which we 
applaud as the recovery was without resorting to r estrictive trade measures. Korea in fact notably 
opened more markets through free trade agreements during the crisis. 
211. Thailand is very much appreciative of Kore a's active participation in the WTO and DDA 
negotiations as well as her strong commitment to th e multilateral trading and rules-based system. As 
an ASEAN Member, we are grateful for Korea's high priority to closer trade relations with us. The 
ASEAN-Korea Free Trade Agreement is comprehens ive, covering goods, services, and investment 
and we look forward to further e nhance this economic relation to A SEAN plus three and plus six in 
the future. 
212. In our bilateral trade relationship, Korea has been Thailand's top ten trading partner for the 
past three years, ranking sixth at the end of 2011.  Trade between Korea and Thailand averaged at 
US$$11.23 billion per year from 200911.  In 2011, Tha iland traded with Korea for US$13.79 billion, 
increasing by 18.18% from 2010. 
213. In the 20ll total trade value, exports from Th ailand accounted for US$4.5 billion, covering 
various products such as rubber, electronic circ uits, sugar, and chemical products.  Imports from 
Korea to Thailand covered various goods, for instan ce, iron, steel, chemicals, electrical machinery, 
and other metal ores, accounting for US$9.21 billion.  
214. We appreciate our continuing and growing relati onships in trade and other cooperation with 
Korea and are looking forward to deepening and br oadening those relationships bilaterally, in 
ASEAN-dialogue fora, and in  the multilateral framework. 
BRAZIL 
215. The economy of Korea has recovered from the wo rld economic crisis swiftly and has posted 
impressive economic growth rates over the past two y ears.  One of the largest stimulus packages put 
in place among OECD countries has played no small role in contributing to that. 
216. The fact that such speedy recovery has been  achieved by and large without resorting to 
restrictive trade measures is indeed commendable and is  explained, evidently, by the fact the Korea's 
economy is largely dependent on foreign trade.  There has been no change either in Korea's export-led 
orientation in the period under Review.  Impres sive performance in exporting manufactured goods 
helped the country jumped from the 12th to the 7th position in the ranking of the world's largest 
exporters. 
217. In spite of Korea's overall sound macroeconomic  fundamentals, the Secretariat's Report also 
mentions some imbalances. Reliance on exports of  manufactured goods by a few large conglomerates WT/TPR/M/268 
Page 34  
 
  makes economic performance in Korea vulnerable to external shocks, especially if foreign demand 
drops as a result of a slowdown in key export markets for Korea. 
218. It is also worth mentioning the contrast be tween the openness of the Korean economy in the 
manufactured products sector and the rather protective approach to trade in agricultural goods.  High 
MFN tariffs, with peaks above 80 0%, including alternate duties and possibly prohibitive out of quota 
rates remain in place for many commodities. 
219. Bilateral trade flows have gained a lot of mome ntum.  Korea is today Brazil's seventh overall 
trade partner and the fifth most important supplier.   According to Brazilian statistics, Brazil is the 
ninth largest market for Korean exports.  Bilate ral trade has almost tripled from US$5.5 billion in 
2007 to US$14.8 billion in 2011.   
220. Brazilian exports to Korea grew by 129%, wh ereas imports exports expanded by 197%.  As 
Korean exports increased at a faster pace than Br azilian exports, the deficit in bilateral trade has 
increased for Brazil in the period under Review.  Last year, Brazil exported US$4.6 billion and 
imported roughly US$10.2 billion, c ontributing to a deficit of US$5.6 billion.  Brazil imports mainly 
comparatively higher value-added manufactured goods such as electronic products, automobiles and 
ships.  Exports are concentrated on commodities, such as iron ore, soybeans and cotton.  Growing 
trade flows notwithstanding, the Brazilian Govern ment deems it necessary to foster greater 
diversification of Brazil's exports to Korea and to  seek a more balanced pattern in bilateral trade 
flows. 
221. A welcome development in bilateral economic re lations is the fact that Korean companies 
have become an important source of FDI in Brazil.   Most large Korean businesses have operations in 
Brazil.  Investments by Korean companies, particul arly those in the high-technology segments, have 
been playing an increasingly important role in  the Brazilian economy and have the potential to be 
further expanded in the future. 
222. With regard to SPS measures, Brazil is still c oncerned with the fact that Korea does not 
accept the principle of regionalization.  This cons titutes an important trade barrier against Brazilian 
beef and pork exports.  We hope that Korea will take  the necessary actions to  be in full compliance 
with the SPS Agreement. 
ARGENTINA 
223. In the period under review, bilateral relations  between Argentina and Korea continued the 
development that had begun in 2004, when the presidents of the two countries decided to forge a strategic partnership with the aim of developing a long-term relationship,  known as "Cooperation for 
Common Prosperity in the 21
st Century". 
224. On the trade front, the bilateral trade volume has tripled since 2000, attaining a level of 
over US$2.3 billion in 2011 which represented record  growth of about 35% on the 2010 figure.  
Nonetheless, while Argentine exports to Korea incr eased by just 23.7%, imports from Korea grew by 
nearly twice as much (46.8%). 
225. The economic environment of the Republic of Korea displays features that are comparable 
to those of various developed countries and demonstrates the strength of its economy - in 
particular, 3.6% GDP growth in 2011, which, according to the Secretariat, was boosted by the 
strongest fiscal stimulus of the 26 OECD countries, an accommodating monetary policy, and a steep exchange-rate depreciation.  In the period unde r review, Korea has also posted modest fiscal 
surpluses, low levels of government debt, a substant ial current account surplus and an increase in its 
international reserves.  WT/TPR/M/268 
 Page 35 
 
 
  226. These figures have been achieved  as a result of the State playing a major role in the economy, 
with measures such as compensation for domestic producers and firms injured by the FTA-induced 
import competition, the maintenance of an import licensing system, or the use of flexible tariffs. 
227. Korea has also been active in trade facilitation, where it has continued to simplify and 
modernize its customs procedures, particularly addressing the issues of "transfer prices" and "customs 
valuation".  In this regard, Argentina and Korea signed a Memorandum of Understanding on 
Co-operation and Mutual Assistance on Customs Issues in November 2010. 
228. The key challenges facing Korea include uneven labour productivity, worsening 
environmental problems, the emerging demographic im balance, and policies that have enabled large 
business conglomerates to gain market dominance to the detriment of small and medium-sized 
enterprises.  Moreover, the fact that growth has been driven more by ex ports than by domestic 
demand makes the country more susceptible to  the vagaries of the international economy. 
229. Less progress has been made in agriculture th an in the manufacturing sector;  the average 
MFN protection applied to agricultural products, at  55%, is more than eight times higher than the 
average applied to other products;  customs inspecti ons are more stringent in  the agriculture sector 
than for manufactured goods;  and agriculture also receives substantial domes tic financial support.  
We wish to express our concern in this sector, because Argentina remains unable to enter the 
Korean market with fresh boned meat and matu re beef, fresh poultry meat and its byproducts, 
and egg products. 
ECUADOR 
 230. As is the case for several other WTO Memb er countries, Korea's sixth TPR reflects a 
recovery from the economic crisis period - at the time of its last trade policy review.  In the time span 
covered by this review, macroe conomic support and fiscal stimulus  policies have been applied, 
together with a depreciation of the local currency and the application of trade liberalization policies 
favouring the country's exports. 
231. In addition, sound management of public fi nances during the review period has brought 
inflation down to single figures and generated sm all but sustained fiscal surpluses, despite rising 
prices among raw materials, foods generally, and fossil fuels. 
232. In terms of its trade policy framework, as a WT O Member Korea grants MFN treatment to all 
of its trade partners, and this policy has not change d since its previous review in 2008.  Nonetheless, 
despite its commitment to the multilateral trading system - which also involves continued active 
participation in the Doha Round nego tiations and in the regular tasks of the organization - Korea has 
continued to sign broad-scope free-trade agreements.  In contrast, it maintains trade restrictions on 
agricultural products and access to its agricultural markets through complex tariffs, the maintenance 
of tariff peaks and technical, sanitary and phytosanitary barriers. 
233. In terms of bilateral trade between Ko rea and Ecuador, Ecuador purchases about 
US$860 million worth of products from Korea per year, but only exports around US$29 million, 
according to 2011 figures.  This demonstrates the asymme try that exists in bilateral trade between the 
two countries resulting in a large and permanent trade deficit for Ecuador. 
234. This imbalance can largely be explained by th e tariff and regulatory requirements imposed by 
the Korean Government, on imports of crop and lives tock products in particular.  Access conditions, 
exemplified by tariff peaks and the complexity of  procedures on technical and sanitary standards - 
which go as far as specifying the colours and sym bols required on product labels, particularly for WT/TPR/M/268 
Page 36  
 
  agricultural products - inevitably make it extrem ely hard to export Ecuadoran crop and livestock 
products to Korea. 
235. On this point, Ecuador would be grateful if , during the four years between now and its 
seventh TPR, the Korean authorities would consider the possibility of eliminating these tariff peaks, 
and in particular simplify the technical, sanita ry and phytosanitary procedures as currently 
implemented, which seriously harm developing countries such as Ecuador. 
236. My country would also welcome further e xplanation from the Korean authorities on the 
technical, sanitary and phytosanitary requirements for exporting agricultural and livestock products to 
the Korean market, which currently seem to restrict trade more than is necessary to guarantee health 
and safety, and prevent errors in goods procurements , as defined in Article 2.2 of the Agreement on 
TBTs and Article 2 of the SPS Agreement. 
237. In view of the above, the measures we see as mo st problematic for Ecuador's exports are those 
relating to standards on specifications and requireme nts for utensils, containers and packaging for 
food products, food labelling standa rds, import requirements for marine products, organic product 
certification standards, and lastly, co untry-of-origin labelling regulations. 
238. Ecuador hopes that Korea's sixth TPR will pave the way for a rapid improvement of access to 
its market, particularly for agricultural products from developing countries, and for a review of its 
technical standards and sanitary and phytosanitary measures. 
VIET NAM 
239. Korea now has an industrialized economy, becoming the third in Asia and the 10
th of the 
biggest economies of the world in 2011. Like most other countries, Korea has also been affected by 
the global economic and financia l crisis, however export-driven economy of Korea has rebounded 
quickly as the result of the revival of trade worl d-wide and supportive macr oeconomic and financial 
policies. Korea has continued to open its market furt her to international trade through major bilateral 
free-trade agreements. 
240. This Review comes at a pivotal moment in the Viet Nam-Korea trade relationship after two 
sides have completed internal procedures and star ted the first round of bilateral FTA negotiations. 
This marks an important milestone in the celebrati on of the twentieth anniversary of the establishment 
of diplomatic relations between Viet Nam and Ko rea. The bilateral FTA will further foster the 
political, economic and cultural relations between the two countries and deepen the relations of 
"Strategic Cooperative Partnership". 
241. Over the past few years, Korea has consecutively been one of the largest trading partners of 
Viet Nam. In 2011, Viet Nam's export to Kor ea has reached over US$4 billion, equal to 52.5% 
increase which marks a spectacular growth after the global economic crisis. Korea is now the fourth 
largest export destination and the second larg est import market of Viet Nam.     
242. Another feature in Viet Nam-Korea trading rela tions is the close linkage between investment 
and trading. Till recently, Korea is the top foreig n investor in Viet Nam in terms of cumulative 
number of projects and registered investment capital.  Viet Nam has been the largest recipient country 
of Korea's official development assistance (O DA) and Korea has been the second largest ODA 
providing country to Viet Nam.  Korea and Viet Nam have also been cooperating under the ASEAN 
plus one schemes. The ASEAN-Korea FTA (AKFTA) is one of the successful outcomes of such 
cooperation.   WT/TPR/M/268 
 Page 37 
 
 
  243. Even though Viet Nam's export to Korea has expanded remarkably in recent years, but in 
view of trade balance, Viet Nam has been consisten tly experiencing trade deficit with Korea. In 2011, 
Viet Nam experienced a r ecord trade deficit of US$8.5 billion. In the first six months of 2012 alone, 
Viet Nam continued to incur US$4.8 billion of trade deficit. This is a source of our concern despite 
gradually evolving in a positive direction.  
244. In this regard, we would appreciate if Korea w ould continue to cooperate with Viet Nam in 
the following actions:  firstly, to collaborate with Viet Nam to accelerate procedures of SPS dossiers 
examination for fresh fruits which Viet Nam has poten tial to export to Korea; secondly, recognize as 
quickly as possible the SPS certificate issued by  Viet Nam National Agro Forestry Fisheries Quality 
Assurance Department (NAFQAD); and last but not least, to update regulations of Foods Law 
concerning standards of rice paper including explic itly provide the acceptable acid propionic ratio so 
that Viet Nam could export rice paper to Korea.   
EL SALVADOR 
245. In the multilateral framework, and as a deve loping-country member, Korea supports the 
multilateral trading system, participating in the WTO to maintain the momentum of trade 
liberalization, particularly in the areas of its inte rest, and to strengthen and modernize the multilateral 
trading system based on rules that promot e expansion and liberalization of trade. 
246. As noted in the Secretariat Report, during the period under review, Korea pursued a 
wide-ranging trade facilitation policy, simplifying an d modernizing its customs procedures, in line 
with its "Best Customs in the World 2012+" pl an, which sends a positive message to commercial 
business people in all of its trade partners, in lin e with the negotiations we are promoting in the 
organization.  On this point, we draw attention to  Korea's contributions to the negotiations currently 
ongoing on this topic, and consider  that its experience and contri butions could provide a timely 
stimulus to this process, and that agreement could be reached to facilitate trade through measures that 
simplify and reduce the costs of customs procedur es to the benefit of developing-country exports. 
247. In the continuing Doha Development R ound multilateral negotiations, Korea, like 
El Salvador, forms part of the G-33, whose memb ers promote their interests in the agriculture 
negotiations, advocating measures of special and diff erentiated treatment for developing countries in 
this domain.  Also on the multilateral front, Korea is a major provider of trade related technical 
assistance and trade assistance under the WTO;  and it continues to give tariff-free status to most 
imports from the least developed countries. 
248. On the bilateral front, our trade ties have enjo yed a continuous process of consolidation and 
strengthening lasting over 50 years, during which ti me we have endeavoured to extend relations to 
other areas, including politics and human developmen t.  In this process, we have benefited from 
cooperation projects in areas such as:  regional competitiveness, technology, information technology, 
infrastructure, vocational human resource training and technology transfer, as well as an increase in 
financial cooperation through the Fund for Coopera tion between Korea and the Central American 
Integration System (SICA), and Korea's incorporat ion as an observer in the Central American Bank 
for Economic Integration. 
249. I would also like to highlight and reiterate th e messages given in various meetings between 
our respective foreign ministers in terms of st rengthening capacity building (including cooperation), 
strengthening investment polic ies to provide guarantees to Korean business people investing 
in El Salvador, and from Korea in making its market  more attractive for my entrepreneurs and correct 
our bilateral trade deficit, for which purpose we ar e in a phase of deepening our trading relations to 
improve our trade flows. WT/TPR/M/268 
Page 38  
 
  250. At the present time, we have a presence in the Korean market with sugar and coffee and some 
traditional products - exports of wh ich have grown by 39.6% and 30% , respectively, according to the 
most recent data.  This gives us reason to believe  that we could expand our exports to other product 
categories such as textiles, plastics, paper, iron, an d other goods;  while Korea could enter our market 
with other high-technology industrial products, apar t from automobiles which are already being sold 
in El Salvador. 
251. It should also be noted that in the 25
th Korean World Travel Fair, our Government presented a 
proposal in the area of tourism, which aims to project the archaeological-cultural route of the Mayan civilization established in our country.  Th is is an example of the support that Korea has 
been providing to El Salvador in promoting a nd making the most of the two countries' trade 
and tourism activities, thereby demonstrating that our relationship extends beyond the purely 
economic sphere. 
TURKEY 
252. We would like to start by underlining the fact that since its previous Review in 2008, Korea, 
moving up by five places, has achieved to become the 7
th biggest exporter of the world in a period of 
global economic crisis. Further, thanks to strong ec onomic structure and prudent policies, the Korean 
economy posted a growth rate of 6.2% in 2010, its high est mark in eight years. It is also important to 
note that Korea has not resorted to protectionist measures. 
253. While Korea has a very successful model of ec onomic growth, the Secretariat's report also 
points out several challenges like productivity gaps in  certain sectors, privatization lagging behind, 
slow pace of foreign investments, and increasing role of small and medium sized enterprises. Further 
reforms in such fields will certainly contribute to  solid and sustainable economic growth. We also 
hope that Korea will maintain its policies to increase the role of domestic activities in the economy.  
254. Based on the historical relations, today, Korea and Turkey enjoys excellent political relations 
as shown by the recent high level visits of Presi dents and Prime Ministers between 2010 and 2012. 
Benefiting from strong bonds between the countries, both countries have now been making an all out 
effort to improve economic coopera tion at bilateral and internati onal level. Turkish and Korean 
economies have been growing steadily, and we share many similarities and face similar challenges.  
255. Our two way trade with Korea reached US$7 bill ion at the end of 2011, and it is in an 
increasing trend in 2012. Korea is the second biggest tr ade partner for Turkey in the Far East. Further, 
on 1 August 2012, we signed with Korea a free tr ade agreement for goods. We hope that services and 
investment agreements will follow soon. This will pr ovide as a platform to drastically strengthen trade 
and economic cooperation be tween the two countries. 
256. Korea has been engaged in the process of o ngoing reforms with the aim to further improve 
business environment and to undertake broad trade f acilitation measures.  We hope that these efforts 
will help attract more foreign direct investments.  Resumption of the privatization process may also 
play a role in this process.  
257. We noted that Korea has been in constant process of updating and streamlining its food safety 
regulations and practices, moving towards a precautionary management system. We anticipate that Korea will continue to take into account views of foreign stakeholders in addition to consumers and 
industry.  In the meantime, we expect that the new food safety policies measures will not be trade restrictive more than necessary as mandated under the SPS Agreement.  
258. We note with pleasure that Korea's trade regime  is mostly open. In the meantime, we also 
believe that simplification of its complex tariff struct ure may be important step to support its efforts to  WT/TPR/M/268 
 Page 39 
 
 
  facilitate trade. In this respect, we welcome the initiatives to further ease cu stoms procedures. While 
we appreciate that Korea pays close attention to ha rmonization of its standards with the international 
rules, nevertheless, there is still room to improve  its performance on its front, particularly given the 
fact that mandatory standards have risen in the review period.  
259. Lastly, we would like to acknowledge that Kor ea is an active participant in the WTO work 
and DDA negotiations. We share Korea's views on r eaching an ambitious and balanced outcome in 
the DDA with flexibilities acco rded in agriculture.  
NORWAY 
260. Korea has become an important economic partner for Norway.  Today, Korea is Norway's 
second biggest trading partner in Asia. In general, our trade relations are excellent and without any 
major outstanding issues.  
261. The free trade agreement between the Republic of  Korea and EFTA came into force in 2006. 
We have witnessed an overall increase in our bilateral trade figures since the agreement was 
established.  The maritime sector, including shi pping, shipbuilding and offshore, has traditionally 
been the most important area in our bilateral economic relations.  
262. Today, we see trade, investment and coopera tion developing positively in new markets and 
areas such as the marine sector, energy and environment, medical sector, nanotechnology and 
biotechnology.  
263. Korea is an important partner for Norway in the maritime field. Maritime and offshore 
equipment accounts for 50% of total Norwegian expor ts to Korea.  Korean shipyards are important 
suppliers when Norwegian ship owners order ne w ships. The number of contracted ships has 
increased over the last years. At the moment, Norw egian ship owners have 36 ships on order at 
Korean shipyards, more than in any other foreign country.  
264. Let me take this opportunity to address the vari ous financing and tax schemes that the Korean 
Government provides to assist Korean shipping and shipbuilding companies (cf. para. 68 and 123 of 
document WT/TPR/S/268). We would appreciate if  the Korean delegation could provide more 
detailed information about these schemes and the results they have prov ided? We would also 
appreciate an assessment of whether these schemes have any effects on inte rnational shipping and 
shipbuilding markets?  
265. Seafood has become a very important for Norway's  exports to Korea. Generally, this trade has 
developed successfully to the benefit of Norwegia n exporters and Korean im porters and consumers. 
266. Fresh seafood is, however, perishable products  and as such vulnerable to any unnecessary 
delays in the transportation chain. In this context, permit me to raise an issue related to the testing of 
fresh Norwegian salmon being imported to Korea.  
267. According to our information about 3% of all im ported Norwegian farmed fish is subjected to 
testing, and it may take 5 to 7 days until the test results are ready. During this period the quality of the 
products are diminishing, sometimes to quality levels that are too low, leaving traders with destruction 
as the only option. What can Korean authorities do to speed up testing procedures in order to facilitate 
these important trade flows? 
268. Furthermore, the inspection of fish heads impor ted to Korea remains an issue of concern and 
an impediment to trade in these markets. My de legation is looking forward to the Korean side 
clarifying outstanding issues relating to the inspection of all typ es of fish heads.  WT/TPR/M/268 
Page 40  
 
  269. We note that the FTA with the EU contains rules that provides for recognition of EU Supplier 
Declaration of Conformity-SDoCs.  We have expect ations that recognition of SDoCs be extended to 
other trade partners on an MFN basis. We welcom e any comment the Korean delegation may have on 
the issue.  
270. Finally, my delegation would lik e to extend our gratefulness to years of constructive contact 
and cooperation with our Korean colleagues. Our two countries and delegations enjoy a close and 
fruitful relationship both in areas where our interest s converge, such as in agriculture, as well as in 
areas where our interests diverge. 
HONDURAS 
271. We are pleased to note in the Secretariat Report that Korea has recovered from the 2008 
global financial crisis, thanks to its major effort s to revive trade and restructure its economy.  
Korea chose an outward looking economic developm ent strategy with exports as the engine of 
growth.  Its exports grew by 14.7% in 2010, and by a further 9.5% in 2011, to make it the world's seventh largest exporter.  Real GDP moved in the same direction, growing by 3.6%, while 
inflation remained low even when  food and fuel prices rose, and unemployment dropped from 3.7% 
to 3.4%.  We are pleased to note that this impressi ve recovery was achieved without recourse to trade 
restrictions. 
272. The goals of Korea's trade policy have been to promote the international competitiveness of 
its firms and foster economic growth through lib eralization and reforms.  In December 2011, 
Korea's trade volume exceeded US$1 trillion for the first time. 
273. We welcome the establishment of the Nationa l Green Growth Strategy, which includes 
incentives to improve energy efficiency and increase the competitiveness of alternative energy 
sources, thereby reducing its reliance on oil. 
274. In terms of Korean-Honduras bilate ral relations, 2012 marks the 50
th anniversary of the 
establishment of diplomatic relations between the two nations.  This relati onship has maintained a 
tradition of friendship and cooperation, as a result of  which trade relations between the two countries 
have deepened, with bilateral trade totalling US$27 8 million in 2011, up by 150% on the 2009 figure.  
Korean investment in Honduras totals over US$104 milli on, while Korea is one of the largest markets 
for Honduran coffee exports. 
275. Korea remains a major source of FDI for the rest of the world (Chapter I), and welcomes 
inward FDI as crucial for economic growth and for providing the financial and technological 
resources needed for restructuring the economy and enhancing international competitiveness.  FDI is 
seen as a means of technology and know-how transf er as well as a major contributor to export and 
employment growth;  "foreign-capital invested" comp anies play an increasingly vital role in the 
economy, for which the Korean Government has provided various tax breaks and other types of 
incentive. 
NIGERIA 
276. Nigeria is pleased to note from the Secretaria t Report that Korea's export-driven economy has 
rebounded from the global financial cr isis that erupted around the time of its previous TPR in 2008.  
This rebound is the result of the revival of the trade worldwide and supportive macroeconomic and 
financial policies, including the largest fiscal stimulus among the OECD countries, as well as 
accommodative monetary policy and a sharp depreciati on of the exchange rate of the Won during the 
latter part of 2008. The rebound was, by and large, achieved without resorting to restrictive trade 
measures. The strong recovery in exports is such  that Korea is now the world's seventh largest  WT/TPR/M/268 
 Page 41 
 
 
  exporter, up from twelfth in 2008. However, d espite its impressive rebound from the global financial 
crisis, Korea's economy remains vulne rable to shocks through interna tional trade, particularly, its 
heavy reliance on exports of manufactures for growth  and financial linkages. Nigeria would like to 
know what efforts Korea is making to stimulate domestic demand that has been restrained by 
household debts.  
277. Nigeria is also happy to note from the Secretaria t Report that Korea, as an original Member of 
the WTO, has maintained its support and commitmen t to the strengthening and liberalisation of the 
multilateral trading system. It grants at least MFN treatment to all its trading partners and, as a developing country, receives the special and differential treatment provided for in the WTO Agreements. The structure of trade policy formula tion, implementation, and evaluation in Korea has 
remained largely unchanged since its previous Trade Policy Review in 2008. 
278. Korea has intensively pursed comprehensive fr ee-free trade agreements (FTAs) with major 
trading partners or regional groups  and is continuing or planning negotiations to establish FTAs with 
other large economics blocs and newly emerging econom ies, Nigeria, however, hopes that the use of 
preferential trade agreements by Korea will not obvi ate its support and commitment to strengthening 
the multilateral trading system. Although the use of FTAs is considered as complementary to the 
wider trade strategy of creating new trade oppor tunities and improving access in key markets, we are 
concerned that the elimination of unilateral tariff preferences as well as the erosion of preferences due 
to MFN tariff reductions are all capable of nega tively impacting on trade with LDCs and poor 
developing countries. Does Korea have, or is considering putting in place programmes that would 
assist this vulnerable segment of tire membership in mitigating any trade losses they may experience 
as a result of these measures?  
279. At the bilateral level, Nigeria's relations with  Korea have been generally warm since the two 
countries established diplomatic ties in 1980.  In August 2012, the Federal Government of Nigeria 
signed an agreement on cultural, educational and sci entific cooperation to foster stronger ties between 
the two countries. Nigeria is optimistic that the agreement would create a platform for better 
understanding of the two countries cultures. WT/TPR/M/268 
Page 42  
 
  V. REPLIES BY THE REPRESENTATIVE OF THE REPUBLIC OF KOREA AND 
ADDITIONAL COMMENTS 
280. A number of Members noted that Korea's FDI inflow is the third lowest among OECD 
member countries.  The Korean government has put fo rth every effort to encourage inward FDI.  The 
outcome, however, has up to this point, not always been reflective of those efforts.  It has been 
pointed out that Korea's low FDI inflow is due to the cost of doing business in areas, such as labor and 
land, burdensome regulations, as well as the ceiling on foreign participation in some of services 
sectors.  We will continuously strive to strengt hen initiatives to work on these points, in order to 
improve the investment environment.  
281. The Korean government has implemented a seri es of investor-friendly programs to address 
such concerns as I just mentioned, especially through the removal of market entry barriers, the 
relaxation of burdensome regulations, and the crea tion of a business-friendly environment. In 2011, 
the government embarked on a second three-year plan on the tails of the previous initiative to enhance 
the investment climate in Korea.  This plan contains measures to improve the overall business and 
living environment in Korea for foreign investors,  such as ensuring stronger protection of their 
intellectual property rights, and supplying land for business use at lower costs. 
282. Noting particularly low FDI inflow to the services sector as well as the sector's low 
productivity, the Korean government embarked on  various plans since 2008 to assist and raise 
productivity of the services industry, including R&D assistance. 
283. Meanwhile, Korea has conducted further liberali zation in the services sector through several 
FTAs with the hope that it will facilitate the necessary  reform and deregulation and lead to increased 
competitiveness.  Through these FTAs, Korea has libe ralized business services, removed "some" of 
the foreign equity participation ceilings in tel ecommunications and broadcasting services, and gotten 
rid of most of limitations in financial services.  This services liberalization is extended to Korea's 
specific FTA partners on the basis of the reciprocity principle. As it is clear that the overall services 
trade regime is becoming more liberalized, it is also understood that these efforts would ultimately 
benefit other trading partners.  Korea would consis tently push forward further services market reform.  
284. On trade facilitation, I appreciate Members' re cognition that Korea has continued to make 
wide-ranging efforts and remains a world leader in  this area.  Along these lines, Korea will continue 
its efforts to further streamline its  already efficient customs procedure as well as to move forward 
trade facilitation discussion in the WTO context by shar ing its experiences in customs reform and best 
practice.  
285. With regard to FTAs, I was pleased to find out th at all of Korea's FTA partners agreed with 
Korea's assessment of FTAs' positive results.  As Ko rea benefits from the more advanced and more 
liberalized trade environment, Ko rea's FTA strategy will highlight such benefits of free trade and 
contribute to creating an increasingly favorable environment for multilateral trade liberalization. 
286. On tariffs, a number of Members raised concerns that the overall simple average applied 
MFN tariff rate has increased from 12.8% in 2008 to 13. 3% in 2012.  As is already described in the 
Secretariat Report, this supposed increase is caused by the fact that the classification of agricultural 
products, which are generally subject to higher tariff  rates, became more detailed as a result of the 
introduction of the 2012 version of the Harmonized  System of Tariff Classification.  This re-
classification was purely technical and did not result in any increase in actual tariff rates. 
287. Several Members also raised issues concerning th e complexity of Korea's tariff system.  To 
the degree that Korea's tariff system is perceived as co mplex, this is, for the most part, centered in the 
agricultural sector, due to TRQs and their relativel y high out-of-quota rates, specific tariffs, and  WT/TPR/M/268 
 Page 43 
 
 
  flexible tariffs.  All of these elements reflect the particularly vulnerabl e situation of Korea's 
agricultural sector.  Since the last Review, Kor ea's farming household inco me has shown stagnation 
and, in some cases, even decline.  Low labor produc tivity in agriculture, which is attributable to an 
aging farming population and small- scale farming traditions, coupled with an increase in agricultural 
imports, are considered to be factors that suppress farming household incomes.  Given such state of 
Korea's agricultural sector, this pattern would no t change dramatically for the time being. 
288. Concerning flexible tariffs, several Members raised concerns that these alter conditions of 
import and reduce predictability. The flexible tari ffs are set, taking into consideration the domestic 
and international market conditions , to cope with import surges or price hikes.  These tariffs are 
within the range of Korea's WTO commitments.  They  are predictable since the rates are established 
mostly on a yearly basis, and are defined in Presi dential decrees publicly available one month prior to 
entry into force.  Flexible tariffs are being applie d in a manner that the number of goods subject to the 
imposition is continually reduced and the rates are gr adually lowered in order to facilitate trade.  
289. With regard to the low average fill rate of TR Qs, most items with a large amount of imports 
have high TRQ fill rates.  Meanwhile, cocoon, ra w silk, silkworm eggs, powdered bones, and sesame 
oil cake have low fill rates due to outbreak of an imal diseases or low domestic demand as a result of 
change in industrial structure.  The Korean government keeps monitoring TRQ fill rates and the 
administrative system, in an effort to enhan ce transparency, fairness and efficiency in TRQ 
administration that includes TRQ allocation standards and procedures. 
290. On technical standards, many Members raised  concerns that the share of non-harmonized 
standards has increased considerably. However, I w ould like to clarify that these results stem from 
miscommunication with the Secretariat.  In fact, Korea's harmonization rate has not decreased, but 
remains the same since the last Review. 
291. With respect to the SPS-related issues, I would like to confirm that Korea's SPS rules and 
practices are in line with the provisions of the WTO SPS Agreement, and are founded on a scientific 
basis.  Several Members asked if the import risk assessment process could be expedited for 
agricultural products.  I understand Members' concerns.  However, we have very limited human and 
logistic resources in this area to satisfy all the a pplicants' wishes.  Despite this restraint, Korea has 
been doing its best to keep the process moving as smoothly as possible while applying the principle 
on an equal basis without discrimination. 
292. On government procurement, some Members voi ced their concerns over the declining share 
of foreign suppliers in Korea's government procurem ent market.  I would like to reassure you that 
Korea's government procurement system has been in line with its obligations under the WTO 
Agreement on Government Procurement and FTAs with  provisions on government procurement.  
Moreover, Korea expects that once the Revised GPA en ters into force, the Agreement will offer more 
access to Korea's government procurement mark et, as Korea has expanded its coverage. 
293. Through our TPR exercise including the prepara tion during the last several months, Korea has 
made its best efforts to provide with all the data  and material available, and diligently answer the 
questions of the Members.  I hope our efforts a nd answers have served well your inquiries and 
concerns, in most cases, if not all.  We will duly take into account the comments and 
recommendations made by Members in formulating our future trade policies. 
294. Korea's presidential election is less than th ree months away from today.  The next 
administration may recalibrate the trade policies a nd practices, along with overall other policies, as 
any new government would do.  However, I am conf ident that Korea's overall trade policy direction 
will remain mostly unchanged as has been witness ed during the last several decades with various 
political parties at the helm of the Korean governme nt.  Korea has always aimed to enhance economic WT/TPR/M/268 
Page 44  
 
  efficiency and competitiveness through liberalizat ion and reform based on the multilateral trading 
system.  I thank you for your interest and particip ation in Korea's Sixth Trade Policy Review and hope 
this meeting helped you better understand Korea's trade policies and practices. 
295. In closing, Korea hopes that the currently stalled DDA negotiations will soon bear fruit and 
affirm our collective efforts over the past ten year s.  Korea expects that the Ninth WTO Ministerial 
Conference to be held in Bali next year will serve  as an important milestone for strengthening the 
multilateral trading system.  Korea will do its due part to help move the negotiations forward and 
reinforce the multilateral trading system and the WTO in close cooperation with other Members. 
DISCUSSANT 
296. Korea's rapid recovery from the global financial cr isis is admirable and it is in no small part 
thanks to the resolute and rapid actions taken by the authorities. The export and GDP figures speak for 
themselves, which many have previously referred to. Members also commend Korea for by and large, 
having resisting protectionism in the face of econo mic downturn. This line of action was pursued by 
the Korean government for its own part, as well as prom oted by Korea internationally. It is generally 
recognized that Korea played an important role in establishing, and subsequently extending, the 
G-20 commitment on standstill and roll-back of trade restrictive measures. Korea deserves praise for 
its contribution to the quest of keeping protectionism  at bay, which is crucial to avoid worsening the 
global economic outlook further.   
297. Its actions also confirm Korea's increasing w illingness and readiness to take on a leadership 
role at the world stage, in reflection of its growi ng economic importance, be it in G-20, in the WTO, 
as a donor and on Aid Effectiveness, in the APEC-r egion and in many other regional and bilateral 
relations. This is a very good thing, not least since Korea's own developmental experiences are 
something that is worth telling, a nd worth listening to. With regard to the WTO, Korea refreshingly 
confesses that it has benefitted and continues to benefit considerably from a rules-based and open 
multilateral trading system and, consequently, re mains fully commitment to the work of this 
organization and to the conclusion of the DDA.  
298. Simultaneously, particularly in this Review pe riod, Korea has pursued a number of ambitious 
and comprehensive FTAs, with many significant WTO-plus commitments. While exports and outward investments probably have been primary dr iving forces for such initiatives, Korea seems to 
have also skilfully used these pro cesses to liberalise its trade and tr ade policies, including in services 
and agriculture, as well as to stimulate further domestic reforms.  Moreover, Korea places outmost importance on the compatibility of its FTAs with the le tter and spirit of the WTO. This being said, the 
litmus test of coherence between multilateralism a nd regionalism, to my mind, lies in the future 
preparedness of Korea to reduce, and preferab ly eliminate, the increasing gap between its 
commitments in the WTO and those undertaken in its more recent FTAs. It is also worth recalling that 
a few Members have expressed specific concerns with some aspects of Korea's FTAs, inter alia , that 
they are likely to erode existing Korean preferences to poorer developing countries and especially 
LDCs.  
299. Similarly, while FTAs represent an important a nd in many ways positive "game changer" to 
its trade regime during the period of review, many  aspects of Korea's trade policy remains unchanged, 
as indicated in the Secretariat Report. This is also why, regrettably, there is such a high degree of 
similarity between the issues and concerns raised  in 2008 and now. For example, concerns remain 
with regard to: Korea's complex tariff structur e; the high average duties and many times higher 
agricultural duties; TRQs and their low fill rate; the use of "flexible tariffs"; the application of some 
SPS measures; burdensome regulations, standards and certification requirements; subsidies in 
agriculture and fisheries; remaining restrictions in services – just to name a few. None of these issues 
are new to Korea, to WTO Members or to th is body. Nor are their trade effects new.   WT/TPR/M/268 
 Page 45 
 
 
  300. This begs the question: Is the positive link between more comprehensive trade-related 
reforms and reciprocal concessions, as in the case  of FTAs, a necessary requirement for Korea's 
continued reforms?  I think the answer, judging fro m the Secretariat Report, is both "yes" and "no". 
Korea's swift actions in response to the crisis s upport the latter. So does its commendable reforms in 
the areas of trade facilitation and customs proce dures, corporate governance, competition policy, 
intellectual property, FDIs and many more. Also, Korea seems to be willing to face up to its 
challenges, as illustrated by the acknowledgement  by Deputy Minister Lee on Wednesday of the 
country's continued vulnerability to external choc ks, in part due to overre liance on exports and the 
under-reliance of domestic demand for growth, as we ll as the challenges caused by a rapidly aging 
population and the high degree of inequality, which will require much more economy-wide 
productivity growth – for which more compe tition and openness are crucial – and increased 
participation by currently side-lined a nd marginalized groups in the society. 
301. However, I also think this Review has shown th at there are still ques tion-marks about Korea's 
openness, and its resolve to push through more compre hensive reforms. It is certainly true for its 
highly sensitive sectors, including some sectors in se rvices. But the case of FDI-inflows shows that a 
glass half-full is also a glass half-empty. State owne rship and state participation in the economy, some 
restrictions on foreign investors and many notificat ion and approval procedures have generally been 
left untouched. Korea remains, first and foremost , an outward-oriented economy.  It performs better 
on – and seems to be more at ease with – exports than imports, just as it is country that continues to be 
better at exporting employment opportunities through  FDI-outflows than importing job opportunities 
through FDI-inflows. 
302. In his concluding remarks on Wednesday, the Deputy-Minister stated that "no matter how far 
or how fast we have come, there is always room for improvement".  This is a humble and generous 
statement by a representative of a country that has transformed itself from a LDC to a rich industrialised country. But, fundamentally, I agree with the Deputy Minister. This Review seems to 
have confirmed that Korea is, overall, on the right track, but that reforms should continue. Also, it has 
given Korea a wealth of advice on where – and in some cases how – such further improvements could 
be made. Thereby, I believe that this exercise provides a unique opportunity and, if properly harnessed in the years to come, I am convinced that  Korea will be reaping even greater benefits from 
the path that it has so clearly set out for itself.  
EUROPEAN UNION 
303. The EU would like to thank the delegation of Ko rea for the efforts made to reply to all our 
questions as well as for the very useful additional information provided this morning.  The EU has 
carefully analysed the answers provided to our ques tions, and in this context we are very pleased to 
note that, with regards to certification processes a nd the EU's question 25, Korea has announced in its 
replies that Korea Food and Drug Administration intends to participate in the International Laboratory Accreditation Cooperation MRA in the future.  The EU very much looks forward to that. 
304. However, the EU remains in need to get more explanation regarding the rationale for certain 
measures that in some cases appear to us as discrimi natory or as creating unjustified barriers to trade.  
Therefore, we have prepared some additional and fo llow-up questions to Korea that relate mainly to 
measures related to certificates of origin, organic f ood, beef import, fisheries and the status of EU 
Member States' requests for expor ting to Korea, and cosmetic import procedures.  We will submit 
these questions in writing through the Secretariat and will wait for the replies in due course.  
URUGUAY 
305. Uruguay is pleased to learn of Korea's progress in  implementing its trade policies, a task we 
know is not always easy, particularly at difficult times such as those prevailing in the world today.  WT/TPR/M/268 
Page 46  
 
  We also welcome Korea's responses to the challenges it faces for the future in different areas.  Among 
the changes mentioned, Uruguay particularly welc omes the recently introduced authorization for 
Uruguayan beef to enter the Korean market. 
JAPAN 
306. Japan has four follow-up questions to enquire furt her details of the written replies.  They are 
related to bilateral agreements, in particular the KORUS FTA, restrictions in the sector of 
broadcasting, the universal compensation fund fo r telecommunications services, and the government 
analysis of the domestic production on counterfeit  goods as well as government efforts to control 
them.  We have already submitted the follow-up questi ons in writing to the Secretariat, and we look 
forward to the replies in due course.   
CANADA 
307. We would like to take this opportunity to ask a few follow-up questions in the area of FDI, 
TRQs, standards and technical requirements, amo ng others.  We submitted these questions to the 
Secretariat, and we look forward to receive your responses to those.    WT/TPR/M/268 
 Page 47 
 
 
  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
308. This sixth Trade Policy Review of Korea has allowed us to improve our understanding of 
Korea's trade and trade-related policies and practices  and how they have evolved since the previous 
Review in 2008. We are grateful for the active participation of the Korean delegation headed by 
H.E. Mr. LEE Sihyung, Deputy Minister for Trade. I would also like to thank the discussant, 
Ambassador Joakim Reiter of Sweden, and Member s of the TPRB for contributing to a very rich 
exchange of views.   
309. In the course of the review, Members praised Ko rea for its effective policies, including a large 
fiscal stimulus package and a proactive monetary policy, which enabled a prompt recovery from the 
2008 global financial crisis with a solid export performance. Some Members were of the view that, 
despite its resilience, the Korean economy could be  affected by falling demand in many of its most 
important markets. Some Members commended Korea for keeping protectionism at bay through the G-20 standstill initiative. Members pointed to some of  the structural challenges that Korea faces such 
as its aging population and the necessity to improve  productivity in the energy and services sectors. 
310. Members noted that inward FDI, as a percenta ge of GDP, remained relatively low although 
efforts to improve the investment environment and to increase integration into the global economy 
have been undertaken.  Several Members asked Korea to consider further relaxing its FDI restrictions, 
regulations and procedures. 
311. Members acknowledged that, alongside its commitmen t to the rules-based multilateral trading 
system, Korea continued pursuing comprehensive WTO- plus FTAs. Certain Members commended 
Korea's support as a donor to WTO technical-assistance activities. 
312. Members noted that the customs tariff regime  remains complex; the average applied MFN 
rate is relatively high, and tariff peaks persist. Therefore, Members encouraged Korea to consider 
improvements in this area. They also called for further action by Korea to bring its tariff bindings closer to its applied rates and bind more tariff lines.   
313. Members strongly commended Korea for further streamlining its customs procedures; its 
trade facilitation regime is now widely recognized  as a world leader. They also praised Korea's 
participation in the WTO negotiations in gene ral, and on trade facilitation in particular. 
314. From a close examination of the observations  made and questions posed by delegations 
during this Review, the following areas were suggest ed for attention from the Korean authorities: 
- Tariff rate quotas : Members expressed concern about tariff rate quota administration 
and practices, possibly resulting in under-utili zed quotas.  They asked Korea to improve 
its low fill rates. 
- Standards : Members encouraged Korea to further extend its efforts to align industrial 
standards to international standards in all sect ors with a view to facilitating trade flows. 
- SPS: Some Members questioned the discrepancy between Korean legislation and the 
relevant international standards/guidelines, as well as the scientific basis of certain 
measures and import barriers on agricultural products. They also asked Korea to 
simplify its certification, authorization, inspection and quarantine procedures. 
- Agriculture and fisheries : Members noted the budgetary and consumer-related costs 
resulting from the persistently high level of border protection and domestic support to WT/TPR/M/268 
Page 48  
 
  the sector. Therefore, they encouraged Kor ea to step up efforts in liberalizing and 
implementing more market oriented policies.  
- Manufacturing : A few Members expressed concern over the impact of measures 
restricting the importation of cars. 
- Services : Some Members noted the persistent st ate involvement and lack of sufficient 
competition in key services sectors (e.g. financial, telecommunications, transport).  
They encouraged Korea to increase competition in services. 
315. This successfully concludes our sixth Review of Korea. The keen interest shown by Members 
in this review, as reflected in the large number of  advance questions and th e many interventions made, 
indicates the important role of Korea in the multilateral trading system and in the WTO. The TPRB 
appreciates Korea's responses to the questions it received, and looks forward to receiving any 
outstanding answers within a month. We hope that this exercise will encour age the Korean authorities 
to continue to reflect on their trade policies and th eir country's role as a major trading partner. We 
further hope that Korea will maintain its positive impact on the multilateral trading system and the 
world economy in the years to come. 
 
__________