WT/REG362/1  
 
 
21 January 2016  
(16-0424)  Page: 1/54  
Committee on Regional Trade Agreements   
 
 
FACTUAL PRESENTATION 
FREE TRADE AGREEMENT BETWEEN CANA DA AND THE REPUBLIC OF KOREA 
(GOODS AND SERVICES) 
Report by the Secretariat 
This report, prepared for the considerat ion of the Free Trade Agreement between 
Canada and the Republic of Korea, has been  drawn up by the WTO Secretariat on its 
own responsibility and in full consultation with the Parties. The factual presentation 
reproduces as closely as possible the terminology used in the Agreement and in the comments provided and does not imply offi cial endorsement or acceptance by the 
Secretariat of such terminology. The report has been drawn up in accordance with the 
rules and procedures contained in the Decision for a Transparency Mechanism for Regional Trade Agreements (WT/L/671) and thus does not imply any value judgement 
by the Secretariat regarding the contents of the Agreement. 
Any technical questions arising from this report may be addressed to 
Mr. Jean-Daniel Rey (tel: +41 22 739 52 64). Any statistical questions arising from 
this report may be addressed to Mr. Thakur Parajuli (tel: +41 22 739 5473). 
 
 WT/REG362/1 
 
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  TABLE OF CONTENTS 
Page 
1   TRADE ENVIRONMENT ................................................................................................. 4  
1.1   Merchand ise trade ..................................................................................................... 4  
1.2   Trade in servic es and inve stment ................................................................................. 6  
2   CHARACTERISTIC ELEMEN TS OF THE AG REEMENT ...................................................... 8  
2.1   Background  Information ............................................................................................. 8  
3   PROVISIONS ON TRADE IN GOODS ............................................................................. 9  
3.1   Import duties and charges, and quantitative restrictions ................................................. 9  
3.1.1   General provisions .................................................................................................. 9  
3.1.2   Liberalization of  trade and ta riff lines ........................................................................ 10 
3.1.3   Liberali zation schedule............................................................................................ 10 
3.1.3.1   Canada .............................................................................................................. 10 
3.1.3.2   Korea ............................................................................................................... . 14 
3.1.4   Tariff rate quotas ................................................................................................... 18 
3.2   Rules of origin .......................................................................................................... 19 
3.3   Export duties and charges,  and quantitative  restrictions ................................................. 20 
3.4   Regulatory provisions on trade in goods ....................................................................... 21 
3.4.1   Standards ............................................................................................................. 21 
3.4.1.1   Sanitary and phytosanitary measures .................................................................... 21 
3.4.1.2   Technical barriers to trade .................................................................................... 21 
3.4.2   Safeguard mechanisms ........................................................................................... 22 
3.4.2.1   Global safeguards ............................................................................................... 22 
3.4.2.2   Bilateral safeguards ............................................................................................. 22 
3.4.2.3   Special safeguards .............................................................................................. 23 
3.4.2.4   Other Sa feguard me asures ................................................................................... 23 
3.4.3   Anti-dumping and countervailing measures ............................................................... 23 
3.4.4   Subsidie s and State-aid .......................................................................................... 24 
3.4.5   Customs-related proced ures and trade facilitation....................................................... 24 
3.5   Sector Specific Prov isions on Trad e in Goods ................................................................ 24 
3.5.1   Trade in Forest Pr oducts ......................................................................................... 24 
3.5.2   Automo tive goods .................................................................................................. 24 
4   PROVISIONS ON TRADE IN SERVICES AND IN VESTMENT ......................................... 25  
4.1   Scope and definitions ................................................................................................ 25 
4.2   Denial of benefits ..................................................................................................... 25 
4.3   General provisions on trade in services and investment .................................................. 26 
4.3.1   Mark et acce ss ....................................................................................................... 26 
4.3.2   National treatment and MFN .................................................................................... 26 
4.3.3   Local presence ...................................................................................................... 27 
4.3.4   Performanc e requirements ...................................................................................... 27 WT/REG362/1 
 
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  4.3.5   Senior Managers and Boards of  Direct ors .................................................................. 27 
4.3.6   Movement of  natural persons .................................................................................. 27 
4.4   Liberalization commitments ........................................................................................ 28 
4.4.1   Canada ................................................................................................................  28 
4.4.1.1   MFN and hori zontal comm itments .......................................................................... 28 
4.4.1.2   Sector sp ecific commitments ................................................................................ 29 
4.4.2   Korea ................................................................................................................... 33 
4.4.2.1   MFN and hori zontal comm itments .......................................................................... 33 
4.4.2.2   Sector sp ecific commitments ................................................................................ 33 
4.5   Regulatory provisions ................................................................................................ 37 
4.5.1   Domestic regulation ............................................................................................... 37 
4.5.2   Recognition and temporary licensing ......................................................................... 37 
4.5.3   Subsidies .............................................................................................................. 37 
4.5.4   Safeguards ........................................................................................................... 37 
4.5.5   Other ................................................................................................................. .. 37 
4.5.5.1   In vestment ........................................................................................................ 37 
4.6   Sector specific provis ions on trade in services ............................................................... 38 
4.6.1   Financial services ................................................................................................... 38 
4.6.2   Telecommunication Services .................................................................................... 39 
5   GENERAL PROVISIONS  OF THE AGREEMENT ............................................................. 39  
5.1   Tran sparency ........................................................................................................... 39 
5.2   Transfers ................................................................................................................. 39 
5.3   Exceptions ............................................................................................................... 40 
5.3.1   Genera l exceptions ................................................................................................ 40 
5.3.2   Security exceptions ................................................................................................ 40 
5.3.3   Ta xation  .............................................................................................................. . 40 
5.3.4   Qualified non-applicabil ity to cultural  industries .......................................................... 40 
5.4   Accession and Withdrawal .......................................................................................... 40 
5.5   Institutio nal framework ............................................................................................. 40 
5.6   Disput e settlement ................................................................................................... 42 
5.7   Relationship with other agr eements concluded by the Parties .......................................... 44 
5.8   Government  procurement .......................................................................................... 45 
5.9   Intellectual property rights ......................................................................................... 45 
5.10   Other .................................................................................................................. .. 46 
5.10.1   Electronic commerce ............................................................................................ 46 
5.10.2   Competition policy, mono polies and stat e enterprises ................................................ 46 
5.10.3   En vironm ent ....................................................................................................... 47 
5.10.4   Labour ...............................................................................................................  48 
5.10.5   Cultural cooperation and audiovisual coproduc tion .................................................... 49 
ANNEX 1 ....................................................................................................................... . 50 WT/REG362/1 
 
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Key Facts 
 
Parties to the Agreement: Canada and the Republic of Korea 
 
Date of Signature:   22 September 2014  
 
Date of Entry into Force:  1 January 2015 
 
Date of Notification:  20 January 2015 
 
Full implementation:  1 January 2032 
 1 January 2035 (for the implementation 
of one TRQ commitment) 
 
 
 
1  TRADE ENVIRONMENT1 
1.1.  The Free Trade Agreement between  Canada, and the Republic of Korea2, hereinafter referred 
to as "the Agreement" is Canada's 11th, and Korea's 11th RTA.3  
1.2.  In 2014, with a population of 35.5 million, Canada's GDP was estimated at US$1,786 billion, 
while that of Korea, with a population of 50. 4 million, was US$1,410 billion. Averaged over the 
period 2012-2014, the Parties trade (goods and services) to GDP ratio was 62.7 for Canada and 104.2 for Korea. 
1.1  Merchandise trade 
1.3.  In 2014, Canada's merchandise exports amounted to US$474 billion (2.50% of global 
exports) and imports amounted to US$475 billion (2.49% of global imports). In the same year, 
Korea's merchandise exports amounted to US$573 billion (3.01 % of global exports) and imports 
amounted to US$526 billion (2.75% of global imports). For both Parties manufactured products represented the main commodity group traded (44.7% and 74.4% respectively of Canada's 
exports and imports; and 86.4% and 52.5% respectively of Korea's exports and imports). 
1.4.  Chart 1.1 summarizes the trends in global an d bilateral trade of the Parties. For most of the 
period Canada and Korea experienced trade surpluses with the world. While trade increased until the 2008-2009 financial and economic crises, it recovered immediately after but has stagnated 
since 2011, in US Dollar terms. In relation to trad e between the Parties, Canadian statistics show a 
trade deficit with Korea throughout the period (2000-2014), while Korean statistics however show 
a trade surplus for the first half of the period and mainly a trade deficit for the second half. 
1.5.  Based on 2014 trade data
4, Korea was Canada's 6th source for imports5 (representing 1.4% 
of Canada's total imports) and 7th destination for exports6 (representing 0.8% of Canada's total 
exports). Canada was Korea's 17th source for imports7 and 22nd destination for exports8 
(representing 1% and 0.9% of Korea's total imports and exports). 
                                               
1 Source: WTO Trade Profiles (2014 data); situation in September 2015. 
2 Hereinafter referred to as "Korea". 
3 Not counting PTN and GSTP. 
4 Source: UNSD Comtrade database. The national stat istics of the Parties may slightly differ from the, 
also official, sources systematically used in  the preparation of factual presentations. 
5 The five top sources of imports for Canada we re: the US (54.3%); China (11.5%); the EU(28) 
(11.3%); Mexico (5.6%); and Japan (2.6%). 
6 The five top destination of exports from Canada were: the US (76.8%); the EU(28) (7.4%); China 
(3.7%); Japan (2.1%); and Mexico (1%). 
7 The five top sources of imports for Korea were: Ch ina (17.1%); the EU(28) (11.9%); Japan (10.2%); 
the US (8.7%); and Saudi Arabia (7%). WT/REG362/1 
 
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  Chart 1.1 Canada-Korea, Republic of: Mercha ndise trade bilaterally and with world, 
2000-2014 
01020304050607080
0100200300400500600700800
2000 2002 2004 2006 2008 2010 2012 2014B. Korea 2000-2014
(US$ billions)
Imports from Canada (Right Axis)
Export to Canada (Right Axis)
Total Imports
Total Exports
01020304050607080
0100200300400500600700800
2000 2002 2004 2006 2008 2010 2012 2014A. Canada 2000-2014 
(US$ billions)
Imports from Rep. of Korea (Right Axis)
Export to Rep. of Korea (Right Axis)
Total Imports
Total Exports
 
Source: UNSD Comtrade database. 
Note: For Korea, the data is available until 2013 only. The data series has been adjusted accordingly for 
 Canada.  
1.6.  The commodity structure of trade between Cana da and Korea, as well as of their global trade 
in the period 2012-2014, is shown in Chart 1.2 on the basis of Harmonized System (HS) sections. 
Mineral and chemical products accounted for more than half of Korea's imports from Canada 
(respectively corresponding to 42% and 10.7% of Korea's imports from Canada). These two 
categories of commodities were also Korea's 1st and fourth largest import categories globally 
(respectively 38.3% and 7.5%), and Canada's 1st and 5th largest exports globally (respectively 
28.5% and 6.2% of Canada's exports to the world). The two commodities most imported by 
Canada from Korea were vehicles and machinery (representing respectively 39.6% and 33.4% of 
Canada's imports from its partner). The same commodities were also Korea's largest exports to the world (respectively 19.9% and 34.2%) and Canada's largest imports globally (respectively 
17.3% and 24.2%). 
                                                                                                                                               
8 The five top destination of exports from Korea were: China (25.4%); the US (12.3%); the EU(28) 
(9.1%); Japan (5.6%); and Hong Kong, China (4.8%). WT/REG362/1 
 
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  Chart 1.2 Canada and Korea, Republic of: pr oduct composition of merchandise trade, 
annual average (2012-2014) 
42
1110865422225Korea imports from Canada (%)
38
23984333227Korea's Global Imports (%)
34
2010977734Korea's Global Exports (%)
40
33952226Canada's imports from Korea (%)
24
17
1287543333226Canada's Global Imports (%)
29
16
107655443328Canada's Global Exports (%)Total: US$ 5 billion Total: US$ 520 billion
Total: US$ 462 billion Total: US$ 461 billionTotal:  US$ 560 billion
Total: US$ 7 billion
 
Source: UNSD Comtrade database. 
1.2  Trade in services and investment 
1.7.  In 2014, Canada's shares of total commerci al services exports and imports were 1.72% and 
2.22% respectively, while Korea's share was 2.14%  of world exports and 2.38% of world imports 
of services. With total commercial services expo rts of US$85 billion, and imports of US$106 billion, 
Canada was the world's 10th largest exporter and 9th largest importer of commercial services. 
Korea was both the 9th largest exporter (US$106 billion) and 8th largest importer (US$114 billion). 
1.8.  Charts 1.3 and 1.4 below show global trade in commercial services for Canada and Korea 
(based on the period 2005-2014). For both Parties, the available data show an overall deficit in 
trade in commercial services with the world. In the case of Canada, travel, transport and other 
business services represented the three mainly tr aded services, in terms of both exports and 
imports. While this is also the case for Korea, exports of other services also represent an important proportion of its overall global exports. Though data for some years are not available, Canadian 
statistics also show a trade deficit for Canada  in relation to Korea, between 2012 and 2014.
9  
                                               
9 Canada's data on trade in services with Korea is available for all three years in 2012-2014, although 
detail (travel, transportation, commercial services) is mission for 2014. WT/REG362/1 
 
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  Chart 1.3 Canada: Global trade in commercial services, 2005-2014 
0102030405060708090100110120130140150160170180
2005 2007 2009 2011 2013A. Canada  imports from world
2005-2014
(US$ Billion)
Other services Personal,  cultural, and recreational  services
Other business services Telecommunications,  computer,  and information  services
Charges for the use of intellectual  property n.i.e. Financial services
Insurance  and pension services Construction
Travel Transport020406080100120140160
2005 2007 2009 2011 2013B. Canada exports to world
2005-2014
(US$ Billion)
 
Note: WTO Statistics database based on BMP6. 
Source: WTO Statistics database (2005-2014). Data for 2014 is a WTO estimate (in particular for Korea). 
Chart 1.4 Korea, Republic of: Trade in commercial services with world, 2005-2014 
0.0100.0200.0
2005 2007 2009 2011 2013A. Korea imports from world
2005-2014
(US$ Billion)
Other services Personal,  cultural, and recreational  services
Other business services Telecommunications,  computer,  and information  services
Charges for the use of intellectual  property n.i.e. Financial services
Insurance  and pension services Construction
Transport Travel0.020.040.060.080.0100.0120.0140.0160.0
2005 2007 2009 2011 2013B. Korea exports to world
2005-2014
(US$ Billion)
 
Source: WTO Statistics da tabase based on BMP6. 
 
1.9.  Charts 1.5 and 1.6 below depict each Party's foreign direct investment stocks and flows with 
the world during 2001-2014, for Canada, and 2001-2013, in the case of Korea. FDI stocks have grown steadily for both Parties, though inward FDI stocks dropped temporarily during the financial 
crisis. The development of FDI flows has been less linear during the period. Inward FDI in Korea 
was relatively stable while outward FDI has increased steadily since 2005. Both countries are net outward investors. WT/REG362/1 
 
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  Chart 1.5 Canada: FDI stock and flow with world, 2001-2014 
0100200300400500600700800900
2001 2003 2005 2007 2009 2011 2013Canada FDI stock with world
2001-2013
(US$ Billion) 
Outward Inward
-20020406080100120140
2001 2003 2005 2007 2009 2011 2013Canada FDI flow with world
2001-2014
(US$ Billion) 
Inward Outward
 
Note:  Data on FDI Stock is only available until 2013. 
Source: UNCTAD and data provided by Canada. 
Chart 1.6 Korea, Republic of: FDI stock and flow with world, 2001-2013  
050100150200250
2001 2003 2005 2007 2009 2011 2013Korea FDI stock with world
2001-2013
(US$ Billion) 
Outward Inward
05101520253035
2001 2003 2005 2007 2009 2011 2013Korea FDI flow with world
2001-2013
(US$ Billion) 
Outward Inward
 
Source: UNCTAD and data provided by Korea. 
 
2  CHARACTERISTIC ELEMENTS OF THE AGREEMENT 
2.1  Background Information 2.1.  The Agreement was signed on 22 Septem ber 2014 and notified on 20 January 2015 under 
Article XXIV:7(a) of GATT 1994 and Article V:7(a) of GATS (see document WT/REG362/N/1 - 
S/C/N/786). The Agreement entered into force on 1 January 2015. The text of the Agreement, 
together with its annexes, is available on the Parties' official websites: 
Canada : English: http://www.international.gc.ca/trade- agreements-accords-commerciaux/agr-
acc/korea-coree/toc-tdm.aspx?lang=eng  
French: http://www.international.gc.ca/trade- agreements-accords-commerciaux/agr-
acc/korea-coree/toc-tdm.aspx?lang=fra  
 
Korea :  http://www.fta.go.kr/main/situation/kfta/lov3/ca/2/  
 
 WT/REG362/1 
 
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  2.2.  The Agreement is composed of 23 Chapters. Box 2.1 below summarizes the structure of the 
Agreement. A number of Annexes, including the Part ies' tariff elimination schedules and the lists of 
reservations on cross-border supply of servic es and establishment (non-conforming measures) 
a l s o  f o r m  p a r t  o f  t h e  A g r e e m e n t .  S i d e  l e t t e r s  o n  s p e c i f i c  i s s u e s  c o m p l e m e n t  t h e  t e x t  o f  t h e  
Agreement.  
Box 2.1 Structure of the Agreement 
Titles, Chapters  Title/description 
Preamble  
Chapter 1 Initial provisions and general definition 
Chapter 2 National treatment and market access for goods 
Chapter 3 Rules of origin  
Chapter 4 Origin procedures and trade facilitation 
Chapter 5 Sanitary and Phytosanitary measures 
Chapter 6 Standards-related measures 
Chapter 7 Trade remedies 
Chapter 8 Investment 
Chapter 9 Cross-border trade in services 
Chapter 10 Financial services 
Chapter 11 Telecommunications 
Chapter 12 Temporary entr y for business persons 
Chapter 13 Electronic commerce 
Chapter 14 Governme nt procurement 
Chapter 15 Competition policy, monopoli es and state enterprises 
Chapter 16 Intellectual property 
Chapter 17 Environment 
Chapter 18 Labour 
Chapter 19 Transparency 
Chapter 20 Institutional provisions and administration 
Chapter 21 Dispute settlement 
Chapter 22 Exceptions 
Chapter 23 Final provisions 
Source: WTO Secretariat based on the Agreement. 
2.3.  Under Article 1.1, the Parties establish a free trade area which they believe to be consistent 
with Article XXIV of the GATT 1994 and Article V of the GATS.  
3  PROVISIONS ON TRADE IN GOODS 
3.1.  Chapters 2-7 of the Agreement specifically cover trade in goods, while other Chapters contain 
horizontal provisions that are also applicable to trade in goods.  
3.2.  A Committee on Trade in Goods is established to address tariff and non-tariff barriers to 
trade in goods between the Parties (Article 2.14).  
3.1  Import duties and charges,  and quantitative restrictions 
3.1.1  General provisions 
3.3.  The Parties agree to apply national treatment to each other's' imports in accordance with 
Article III of GATT 1994 and its interpretative notes,  which are incorporated into and made part of 
the Agreement, mutatis mutandis (Article 2.2).  
3.4.  Neither Party shall adopt or maintain any prohibition or restriction on the import of any good 
from the other Party, except as provided in the Agreement or in accordance with Article XI of 
GATT 1994, which is, together with its interpretative  notes, also incorporated into and made part 
of the Agreement mutatis mutandis (Article 2.7). The Agreement confirms that import price 
requirements, except as permitted in enforcem ent of countervailing and antidumping order and 
undertakings, are prohibited in any circumstances in which any other form of restriction is 
prohibited. 
3.5.  Without prejudice to the Parties' rights und er the WTO Agreement, the provisions on national 
treatment (Article 2.2) and on import restrictions (Article 2.7) do not apply to: WT/REG362/1 
 
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  a. actions by Korea or by Canada authorized by the WTO Dispute Settlement Body; 
b. a measure applied by Korea to address market disruption pursuant to procedures that 
have been incorporated into the WTO agreement; 
c. a measure, including that measure's continuation, prompt renewal, or amendment,  
applied by Canada on imports of any goods of the prohibited provisions of tariff items 
9897.00.00, 9898.00.00, and 98999.00.00 referred to in its Customs Tariff; Canadian excise duties on absolute alcohol used in manufacturing under the existing provisions of 
the Excise Act ; the use of ships in Canada's coasting trade pursuant to the Coasting 
Trade Act ; and the internal sale and distributi on of wine and distilled spirits. 
3.6.  Under Article 2.4 on temporary admission of goods, the Agreement lists the goods, for which 
duty-free temporary admission shall be granted and specifies the applicable conditions. 
3.7.  Articles 2.5 and 2.6 prohibit the imposition  of customs duties on certain commercial samples 
and printed advertising materials and on goods that re-enter a Party's territory after they have been temporarily exported from that territory to the territory of the other Party for repair or 
alteration. Nevertheless, Annex 2-E to the Agreement lists certain goods of HS Chapter 89 that 
re-enter the territory of Canada from the territory of Korea, and are registered under the Canada 
Shipping Act , for which Canada may apply to the value of repair or alternation of such goods, the 
rate of customs duty in accordance  with its Schedule to Annex 2-D. 
3.8.  The Parties agree not to adopt or maintain a customs user fee or other similar charge in 
connection with importation of a good of the other Party that is not commensurate with the cost of services rendered and affirm that nothing in Ar ticle 2.10 modifies Article VIII of the GATT 1994 as 
it applies between them (Article 2.10). 
3.1.2  Liberalization of trade and tariff lines 3.9.  Neither Party shall increase any existing customs duty, or adopt any new customs duty
10, on 
an originating good. Unless otherwise provided for in the Agreement, each Party shall 
progressively eliminate its customs duties on originating goods in accordance with its Schedule, contained in Annex 2-D to the Agreement (Article 2.3).  
3.10.  On request by a Party, consideration shall be given to accelerating the elimination of 
customs duties (paragraph 4 of Article 2.3). 
3.1.3  Liberalization schedule 3.11.  Annex 2-D to the Agreement states the staging categories applicable to the Parties and 
applies in relation to the Parties' Schedules that are attached to the Annex. Section A to Annex 2-D 
contains the six staging categories applicable to both Parties, while Section B to annex 2-D contains sixteen additional staging categories that apply only to Korea. 
3.12.  The base rates of customs duty set out in both Parties' Schedules reflect their MFN rates in 
effect on 1 January 2011. 
3.1.3.1  Canada 
3.13.  Canada's applied tariff in 2015 consisted of 7,129 lines at the HS eight-digit level 
(HS 2012). 96% of the tariff rates were ad valorem  and 284 lines had non- ad valorem  tariffs.
11  
3.14.  Six staging categories apply to the elimination of customs duties by Canada: 
                                               
10 A Party may, however, raise a customs duty to the level established in its Schedule to Annex 2-D 
following a temporary unilateral reduct ion. A Party may also raise a customs duty on goods for which no tariff 
preference is claimed under the Agreement, or as au t h o r i z e d  b y t h e  W T O  D i s pu t e  S e t t l e m e n t  B od y  o r  an y 
agreement under the WTO Agreement. 
11 Eighty-three specific duties, 42 compound duties, 153 mixed duties, and 6 duties with no rate. WT/REG362/1 
 
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   Customs duties for goods in category "A" were eliminated on the date of entry into force 
of the Agreement; 
 Category "B" foresees the elimination of customs duties in three equal annual stages 
from the entry into force of the Agreement.  Duty-free treatment shall be granted from 
1 January 2017 onward;  
 Category "C" foresees the elimination of cust oms duties in five equal annual stages from 
the entry into force of the Agreement. Du ty-free treatment shall be granted from 
1 January 2019 onward;  
 Category "D" foresees the elimination of customs duties in ten equal annual stages from 
the entry into force of the Agreement. Du ty-free treatment shall be granted from 
1 January 2024 onward;  
 Customs duties for goods in category "E" are excluded; 
 Category "F" foresees the elimination of customs duties in eleven equal annual stages 
from the entry into force of the Agreement.  Duty-free treatment shall be granted from 
1 January 2025 onward.  
 
3.15.  Table 3.1 shows tariff elimination commitments by Canada under the Agreement. In 2015, 
4,986 lines were duty free on an MFN basis, re presenting 69.9% of Canada's total tariff, 
corresponding to 54.3% of its imports from Korea during 2012-2014. Immediately following the entry into force of the Agreement, an additional  590 lines (8.3% of Canada's tariff) also became 
duty-free for imports from Korea. This resulted in 78.2% of Canada's tariff becoming duty free, 
corresponding to 57.7% of Canada's total imports from Korea (during the period 2012-2014). 
Further tariff lines will become duty free in 2016, 2017, 2018, 2019, 2021, 2024, and 2025, which corresponds to Canada's full implementation of its tariff elimination programme.
12 As a 
consequence, ten years after the entry into force of the Agreement, 98.6% of the Canadian tariff 
will be duty free for imports from Korea, leaving 102 tariff lines for which duties will continue to be 
levied, representing 1.4% of Canada's tariff and corresponding to a negligible part of Canada's 
total imports from Korea (during the period 2012-2014).  
Table 3.1: Canada 
Tariff elimination commitments under the Ag reement and corresponding average trade 
Duty phase-out 
period Number of 
lines % of total 
lines in 
Canada's 
tariff 
schedule Value of Canada's 
imports from Korea 
(2012-2014) 
US$ million a % of Canada's 
total imports from  
Korea 
2012-2014 
2015 (MFN) 4,986 69.9 3,622.4 54.3 
2015 590 8.3 228.2 3.4 
2016 137 1.9 8.5 0.1 
2017 930 13.0 2,622.7 39.3 
2018 145 2.0 169.5 2.5 
2019 207 2.9 5.0 0.1 
2021 2 0.0 0.2 0.0 
2024 13 0.2 0.1 0.0 
2025 11 0.2 20.6 0.3 
Remain dutiable 102b 1.4 0.1 0.0 
TOTAL 7,129c 100.0 6,677.3 100.0 
a Import coverage is from HS chapters 1-97. 
b Amongst the tariff liens subject to TRQ at the MFN level, 55 tariff lines are duty free under the 
agreement and 19 tariff lines are already duty  free at MFN basis for in-quota tariff. 
c 6 tariff lines in Chapter 17 (17019110, 17019910, 17029021, 17029061, 17029070 and 17029081) 
only relate to the Canada-Peru FTA and the Ca nada-Honduras FTA. These tariff lines are only 
included for completeness of the tariff line count  but are excluded in the Canada-Korea FTA. 
Note: Tariff lines subject to in-quota ra tes are excluded in the computation. 
 Based on the HS2012 nomenclature. 
Source:  WTO estimates based on data  provided by Canada and WTO-IDB. 
 
                                               
12 For a number of tariff lines, according to the data submitted by Canada, the implementation of the 
duty elimination will take place earlier than anticipated in the Agreement due to domestic policies in respect of 
rounding and elimination of rates below 2%. WT/REG362/1 
 
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  3.16.  Table 3.2 shows Canada's tariff elimination, by HS section. The 102 lines excluded from 
tariff elimination once implementation is completed are found in HS Sections I (live animals), III (animal or vegetable fats and oil), IV (prepared food), and VI (plastics and rubber), with final 
average tariffs at between 183.3% and 228.9% and wi th preferential rates at the same level as 
MFN rates. Imports that are excluded can be found in HS Chapters 1, 2, 4, 15, 16, 18, 19, 21, 22, 
23 and 35, as illustrated by Chart 3.1 below. The highest average tariffs are found, at 265%, in HS Chapter 18 for some cocoa and cocoa preparations (2 tariff lines) but also for HS 22 
(beverages, spirits and vinegar – 1 line) at 256%, HS 19 (preparations of cereals, flours, starch or 
milk – 6 lines) at 254.3% and HS 4 (dairy produce – 44 lines) at 244.7%.   
  WT/REG362/1  
 
- 13 - Table 3.2 Canada: Tariff elimination under the Agreement, by HS Section 
HS 
Section MFN 
Average 
% No. of 
lines Duty-free 
lines under 
the  
MFN 2015 Number of duty-free lines under the Agreement 
Remain 
dutiable a Avg. Final Tariff  
(Dutiable) 2015 2016 2017 2018 2019 2021 2024 2025 
I 37.9 408 278 9 34 12  6    69 227.7 
II 4.1 467 278 36  80 9 64      
III 8.0 68 25 15 7 19      2 218.0 
IV 17.1 535 161 60 61 137 18 65    27 228.9 
V 0.4 158 150 4 3 1        
VI 1.3 855 718 99 1 33      4 138.3 
VII 1.8 269 201 26  40 2       
VIII 3.1 98 67 4  27        
IX 2.1 131 83 48          
X 0.0 141 141           
XI 4.9 1203 839 1 3 360        
XII 9.7 100 34 10  13 4 28  11    
XIII 2.1 166 109 52 2 3        
XIV 1.7 60 45 10  5        
XV 1.3 666 531 38 3 53 33 8      
XVI 0.8 1047 916 56 3 43 29       
XVII 5.4 240 103 23  46 35 18 2 2 11   
XVIII 1.7 289 201 57 17 6  8      
XIX 3.8 29 7 21  1        
XX 4.5 190 92 19 3 51 15 10      
XXI 1.4 9 7 2          
Total 5.6 7129b 4986 590 137 930 145 207 2 13 11 102 226.0 
a Amongst the tariff liens subject to TRQs at the MFN level, 55 tariff lines are duty free unde r the agreement and 19 tariff li nes are already duty free at MFN basis for 
in-quota tariff. 
b 6 tariff lines in Section IV (17019110, 17019910, 17029021, 17029061, 17029070 and 17029081) only relate to the Canada-Peru F TA and the Canada-Honduras FTA. 
These tariff lines are only included for completeness of the tariff line count but are excluded in the Canada-Korea FTA. 
Note: Tariff lines subject to in-quota rates are excluded in the computation; for the calculation of averages, specific rates a re excluded and the ad valorem  parts of alternate 
rates are included. 
 Based on the HS2012 nomenclature. 
Source:  WTO estimates based on data provided by Canada.WT/REG362/1 
 
- 14 - 
 
  Chart 3.1 Canada: Average of dutiable ra tes on excluded line s, by HS Chapter 
0.050.0100.0150.0200.0250.0300.0
01 02 04 15 16 18 19 21 22 23 35Average Duty Rate
HS ChapterPreferential MFN
 
Note: 
 Tariff lines subject to in-quota rates are excluded in the computation; for the calculation of 
averages, specific rates are excluded and the ad valorem  parts of alternate rates are included.  
 Based on the HS 2012 nomenclature. 
Source: WTO estimates based on data provided by Canada.  
 
3.1.3.2  Korea 
3.17.  Korea's applied tariff in 2015 consisted of 12,243 lines at the HS eight-digit level (HS 2012). 
99% of the tariff rates were ad valorem  and 95 lines had non- ad valorem  tariffs.13  
3.18.  Twenty-two staging categories apply to the elimination of customs duties by Korea: 
 Categories A-F foresee the same elimination schedule as for Canada.  
 Category "G" foresees the elimination of cust oms duties in six equal annual stages from 
the entry into force of the Agreement. Du ty-free treatment shall be granted from 
1 January 2020 onward.  
 Category "H" foresees the elimination of customs duties in seven equal annual stages 
from the entry into force of the Agreement.  Duty-free treatment shall be granted from 
1 January 2021 onward.  
 Categories "I", "J", "K", and "L" foresee the progressive elimination of customs duties in 
ten unequal annual stages from the entry into force of the Agreement. The reductions 
differ from one category to another. Duty-free treatment shall be granted from 
1 January 2024 onward.  
 Category "M" foresees the elimination of cust oms duties in four equal annual stages from 
2023. Duty-free treatment shall be granted from 1 January 2026 onward.  
 Category "N" foresees the elimination of customs duties in four equal stages. The first 
reduction took place on the entry into force of the Agreement and the second, third, and 
fourth reductions will take place respectively in 2024, 2025, and 2026. Duty-free 
treatment shall be granted from 1 January 2026 onward.  
 Category "O" foresees the elimination of customs duties in twelve equal annual stages 
from the entry into force of the Agreement.  Duty-free treatment shall be granted from 
1 January 2026 onward.  
 Category "P" foresees the elimination of customs duties in thirteen equal annual stages 
from the entry into force of the Agreement.  Duty-free treatment shall be granted from 
1 January 2027 onward.  
                                               
13 One specific duty and 94 mixed duties. WT/REG362/1 
 
- 15 - 
 
   Category "Q" foresees the elimination of customs duties in fifteen equal annual stages 
from the entry into force of the Agreement.  Duty-free treatment shall be granted from 
1 January 2029 onward.  
 Category "R" foresees the elimination of customs duties in eighteen equal annual stages 
from the entry into force of the Agreement.  Duty-free treatment shall be granted from 
1 January 2032 onward.  
 Category "S" foresees two different tariff  elimination programmes depending on the 
season in which the goods enter Korea. Du ty-free treatment shall be granted for all 
goods covered by the category, irrespective of the season of importation from 1 January 2029 onward. 
 Category "T" foresees the progressive elimination of duties in seven years, according to 
a specific reduction programme. Duty-free treatment shall be granted from 1 January 
2021 onward.  
 Category "U" foresees the progressive elimination of duties in three years, according to a 
specific reduction programme. Duty-free treatment shall be granted from 1 January 
2017 onward.  
 No obligations regarding customs duties shall apply to goods in Category "X". Nothing in 
the Agreement shall affect Korea's rights and obligations with respect to its 
commitments in WTO document WT/Let/492
14 and amendments thereto. 
 3.19.  Table 3.3 shows tariff elimination commi tments by Korea under the Agreement. In 2015, 
1,963 lines were duty free on an MFN basis, representing 16% of Korea's total tariff, 
corresponding to 67.7% of its imports from Canada during 2012-2014. Immediately following the entry into force of the Agreement, an additional 7,835 lines (64% of Korea's tariff) became 
duty-free for imports from Canada. This resulted  i n  8 0 %  o f  K o r e a ' s  t a r i f f  b e c o m i n g  d u t y  f r e e ,  
corresponding to 87.6% of Korea's total imports from Canada (during the period 2012-2014). Further tariff lines will become duty free in 2017, 2019, 2020, 2021, 2024, 2025, 2026, 2027, 
2029, and 2032, which corresponds to Korea's full implementation of its tariff elimination 
programme. By 2025, ten years after the entry into force of the Agreement, 97.7% of the Korean 
tariff will be duty free for imports from Canada. By 2032, at the end of the tariff elimination 
programme, 97.9% of Korea's tariff will be duty free, corresponding to 99.4% of Korea's total 
imports from Canada (during the period 2012-2014), leaving 251 tariff lines for which duties will 
continue to be levied, representing 2.1% of Ko rea's tariff and corresponding to 0.6% of Korea's 
total imports from Canada (during the period 2012-2014).  
Table 3.3 Korea, Republic of 
Tariff elimination commitments under the Ag reement and corresponding average trade 
Duty phase-out 
period Number of 
lines % of total lines in 
Korea's tariff 
schedule Value of Korea's 
imports from Canada 
(2012-2014) 
US$ million % of Korea's 
total imports 
from  
Canada 
2012-2014 
2015 (MFN) 1963 16.0 3378.1 67.7 
2015 7835 64.0 992.3 19.9 
2017 570 4.7 249.2 5.0 
2019 814 6.6 151.9 3.0 
2020 2 0.0 0.0 0.0 
2021 12 0.1 92.5 1.9 
2024 705 5.8 38.7 0.8 
2025 59 0.5 4.1 0.1 
2026 9 0.1 24.6 0.5 
2027 3 0.0 21.8 0.4 
2029 19 0.1 9.7 0.2 
2032 1 0.0 0.0 0.0 
Remain dutiable 251 2.1 29.4 0.6 
TOTAL 12243 100.0 4992.4 100.0 
Note: Tariff lines subject to in-quota ra tes are excluded in the computation. 
 Based on the HS 2012 nomenclature.  
Source:  WTO estimates based on data provided by Korea.  
                                               
14 Certification of Modifications and Rectifications to Schedule LX-Republic of Korea, dated 13 April 2005. WT/REG362/1 
 
- 16 - 
 
  3.20.  Table 3.4 shows Korea's tariff elimination, by HS section. The 251 lines excluded from tariff 
elimination once implementation is completed are found in HS Sections I (live animals), II (vegetables), III (animal or vegetable fats and oil, IV (prepared food), and VI (plastics and rubber), with final average tariffs between 50.5% and 754.3%, and with preferential rates at the 
same level as MFN rates, or below them in the case of products covered under HS Chapters 7, 8, 
12 and 21 as illustrated by Chart 3.2 below. The highest average tariffs are found, at 754.3%, in HS Chapter 33 (Essential oils and resinoids; perfumery, cosmetic or toilet preparations – 1 line). 
High rates are also found in HS 13 (lac, gums, resins and other vegetable saps and extracts – 4 
lines) at 573.2%, HS 10 (cereals – 6 lines) at 513% and HS 12 (oil seeds and miscellaneous grains – 27 lines) at 459.3%.   
  WT/REG362/1  
 
- 17 - Table 3.4 Korea, Republic of: Tariff elimin ation under the Agreement, by HS Section 
HS 
Section MFN 
Average 
% No. of 
lines Duty-free 
lines 
under the  
MFN 2015 Number of duty-free lines under the Agreement 
Remain 
dutiable Avg. Final 
Tariff  
(Dutiable) 2015 2017 2019 2020 2021  2024  2025 2026 2027 2029 2030  2032 
I 20.5 762 21 101 90 233 1 1 182 27 8 3 9     86 50.5 
II 108.2 690 29 117 60 128   5 218 24 1   7 1   100 314.7 
III 13.4 108 0 37 25 21   2 18 1           4 176.8 
IV 29.3 543 3 77 103 114 1 4 171 7     2   1 60 106.2 
V 3.8 392 51 322 6 13                       
VI 7.5 2299 174 1848 98 164     14             1 754.3 
VII 6.7 377 5 344 9 19                       
VIII 7.7 242 28 214                           
IX 5.8 316 38 16 81 89     92                 
X 0.0 288 288                             
XI 9.7 1289 28 1253 3       5                 
XII 10.1 100 0 100                           
XIII 7.8 345 1 320 17 7                       
XIV 5.2 118 5 113                           
XV 4.2 1037 412 622 2 1                       
XVI 5.7 2064 562 1432 58 12                       
XVII 5.8 333 80 250 1 2                       
XVIII 6.7 563 84 449 16 10     4                 
XIX 3.4 81 47 34                           
XX 5.4 281 92 186 1 1     1                 
XXI 0.0 15 15                             
Total 14.1 12243 1963 7835 570 814 2 12 705 59 9 3 18 1 1 251 173.9 
Note: Tariff lines subject to in-quota rates are excluded in the computation; for the calculation of averages, specific rates a re excluded and the ad valorem  parts of alternate 
rates are included. 
 16 tariff lines15 under the Excluded category (Category X) reflect the MFN 2015 duti es. This process is in accordan ce with the methodology appli ed by the Secretariat 
across all FPs where it aims to assess the margins of preference  in reference to the MFN duti es as of entry into force. 
 Based on the HS 2012 nomenclature. 
Source:  WTO estimates based on data provided by Korea.
                                               
15 100610.00.00, 100620.10.00, 100620.20.00, 100630.10.00, 100630.20.00, 100640.00.00, 110290.20.00, 110319.30.00, 110320.20.00, 110419.10.00, 180690.22.90, 
180690.29.99, 190120.10.00, 190120.90.00, 190190.90.91, 190190.90.99. WT/REG362/1 
 
- 18 - 
 
  Chart 3.2 Korea, Republic of: Average of dutiab le rates on excluded lines, by HS Chapter  
050100150200250300350400450500550600650700750800
01 02 04 05 07 08 09 10 11 12 13 15 16 17 18 19 20 21 22 24 33Average Duty Rate
HS ChapterPreferential MFN
 
Note: 
 Tariff lines subject to in-quota rates are excluded in the computation. For the calculation of 
averages, specific rates are excluded and the ad valorem  parts of alternate rates are included. 
 Based on the HS 2012 nomenclature. 
Source: WTO estimates based on  data provided by Korea. 
 
3.1.4  Tariff rate quotas 
3.21.  Korea applies tariff rate quotas (TRQs) to certain originating goods under the Agreement, as 
set out in Article 2.13 and elaborated in Annex 2-G to the Agreement.  
3.22.  Seven categories of products imported from Canada are subject to TRQs: (i) natural honey; 
(ii) unhulled and naked barley; (iii) flour, meal, powder, flakes, granules and pellets of potatoes; 
(iv) malt; (v) soybeans for human consumption, identity-preserved; (vi) fodder, other; and (vii) 
supplementary feeds, animal. Some of these produc ts are also subject to the special agricultural 
safeguard mechanism under Annex 2-F of the Agreement (i.e., unhulled and naked barley, and 
flour, meal, powder, flakes, granules and pellets of potatoes). The in-quota rate is zero and quota 
quantities for each TRQ are set in Annex 2-G to  the Agreement along with the number of years 
during which the TRQ quantities progressively increase (between 10 and 21 years). For most products (unhulled and naked barley; flour, meal, powder, flakes, granules and pellets of 
potatoes; malt; fodder, other; and supplementary feeds, animal) the out-of -quota duty will be 
phased out over a transition period (10-16 years) after which the TRQ will be removed. The quota quantities for the other products (soybeans for human consumption, and natural honey) will 
remain unchanged once the transition period is over. Any quantity of originating goods imported 
from Canada under a TRQ provided in Annex 2-G shall not be counted toward the in-quota amount of any TRQ provided for such goods in Korea's Schedule (TRQs provided through WTO 
commitments).
16  
3.23.  Annex 2-G indicates which Korean entity shall administer the different TRQs. Moreover, 
Article 2.13 establishes, inter alia , that the administration and implementation of TRQs shall be in 
accordance with Article XIII of the GATT 1994,  and the WTO Agreement on Import Licensing 
Procedures, and any other WTO agreement. Over the course of each year, Korea's administering 
authority shall publish, in a timely fashion on its designated publicly available Internet site, administration procedures, utilization rates and remaining available quantities for each TRQ.
17 Any 
new or modified administration of a TRQ shall be notified prior to its application. 
 
                                               
16 Korea confirms that the products for which TR Qs are granted under the Agreement (i.e. 7) are 
different than those for which TRQs are granted under the WTO (i.e. 63). 
17 The information is available at http://www.at.or.kr/article/apko363600/list.action . WT/REG362/1 
 
- 19 - 
 
  3.2  Rules of origin 
3.24.  Chapter 3 contains provisions on rules of origin and is supplemented by Annexes 3-A 
(Product Specific Rules Schedule), Chapter 4 (Origin procedures and trade facilitation); and a Memorandum of understanding between the Parties concerning uniform regulations for the 
interpretation, application and administration of Chapter 4.  
3.25.  A good qualifies as originating when:  1. is wholly obtained or produced entirely in the territory of one or both of the Parties as defined 
in Article 3.2; 
2. it has undergone sufficient production as per Article 3.3; or 
3. it is produced entirely in the territory of one or both of the Parties, exclusively from originating 
materials; and it satisfies all other applicable requirements under Chapter 3. 
3.26.  Annex 3-A contains product specific rules of origin and outlines the conditions that need to 
be fulfilled for products to qualify as originating when non-originating materials are used in the production of those goods. Notwithstandin g Annex 3-A and except for certain goods
18, a good that 
cannot satisfy the conditions in Annex 3-A because both the good and one or more of the 
non-originating materials used in the production of that good are classified in the same HS subheading, or heading that is not further subdivided into subheadings, may be considered as originating if the value of the non-originating ma terials does not exceed 55% of the transaction 
value or ex-works price of the good (value test). With respect to the conditions set out in 
Annex 3-A, a change in tariff classification, at th e 2, 4, or 6-digit levels, constitutes the main 
criteria used to determine origin for goods ha ving undergone sufficient production. A maximum 
percentage (between 20% and 65%) is set for non-originating material, and can be used as an 
alternative criterion for certain goods.
19 The method to perform the value test is defined under 
Articles 3.4. Annex 3-A also specifies for which ta riff lines a specific manufacturing or processing 
operation confers, or contributes to confer origin.20 In addition, for the purposes of determining 
whether a good of HS heading 87.01 through 87.06 (some vehicles other than railway or tramway rolling-stock, and parts and accessories thereof) is an originating good, any material of HS Chapter 84, 85, 87, or 94 used in the production of that good in the territory of a Party shall be considered 
as originating if: (a) the material is imported into the territory of a Party from the territory of the 
U.S.; and (b) the material would be considered as  an originating material under the applicable 
rules of origin of the Agreement if the territory  of the U.S. were part of the free trade area 
established by the Agreement. Articles 3.5 (materials used in production) and 3.6 (self-produced 
materials) clarify the notion of "value of originating materials". 
3.27.  A de minimis  tolerance rule of 10% of the transaction value or ex-works price of the good is 
applicable to non-originating materials used in the production of a good. It is not applicable to 
agricultural goods (HS 1-21) unless the non-originating materials are provided for in a different subheading. The de minimis  threshold related to textiles and apparel (HS 50-63) is based on total 
weight of yarn, rather than value criteria. 
3.28.  Chapter 3 also contains, under Articles 3.9 through 3.14, disciplines on fungible goods and 
materials; sets of assortments of goods; accessories, spare parts and tools; packaging materials and containers for retail sale and for shipment; and indirect materials. Transit and transhipment 
provisions are also contained in Article 3.16. 
                                               
18 Goods of HS Chapters 1 through 21, headings 39. 01 through 39.15 or HS Chapters 50 through 63 of 
the Harmonized System. 
19 This is particularly the case for goods classified under HS Chapters 30 and 38 (some chemicals and 
pharmaceuticals); 39-40 (some plastics and rubber); 64-65 (some footwear and headgear); 73-74 (some iron, steel, or copper products); 76 (aluminium); 82-87 (metals, electrical machinery and equipment, some vehicles and parts thereof); 90-93 (optical and medical instruments, watches, musical instruments, arms and 
ammunition); and 94-96 (a number of miscellaneous manufactured articles). 
20 This is the case particularly for goods classi fied under HS Chapters 27 (fuels and mineral oil 
products), 28-29(chemical products), and 50 through 63 (textiles). WT/REG362/1 
 
- 20 - 
 
  3.29.  Accumulation of origin is governed by the pr ovisions of Article 3.7. According to the article, 
a good that is originating in the territory of one or both of the Parties shall be considered as 
originating in the territory of either of the Parties. Under certain conditions elaborated in Article 3.7, the production of a good in the territo ry of one or both of the Parties by one or more 
producers is, at the choice of the exporter or pr oducer of the good for which preferential tariff 
treatment is claimed, considered to have been perf ormed in the territory of either of the Parties by 
that exporter or producer. The Parties may agree to  review Article 3.7 with a view to providing for 
other forms of cumulation, such as cross-cumulation or pan-free-trade-agreement-cumulation for 
the purpose of qualifying goods as originating goods under the Agreement.  
3.30.  The conditions for acquiring originating status set out in Chapter 3 must be fulfilled without 
interruption in the territory of one or both of the Parties (principle of territoriality), except in 
specific circumstances established in Article 3.15. 
3.31.  Chapter 4 (origin procedures and trade facilitation) governs the establishment by the Parties 
of a Certificate of origin (Article 4.1); contains certain obligations regarding importation and 
exportations (Articles 4.2 and 4.4); and allows for a waiver of certificate or origin (Article 4.3). 
3.32.  In relation to administration and enforcem ent, Articles 4.5 through 4.12 contain provisions 
on record keeping requirements; origin verificati ons; denial of preferential tariff treatment; 
confidentiality of the information collected under Chapter 4; penalties for violations of a Party's 
laws and regulations relating to Chapter 4; advance rulings as well as review and appeal of 
determinations of origin and advance rulings; and uniform regulations regarding the interpretation, application, and administration of Chapter 4. Notification requirements as well as a commitment by 
the Parties to cooperate in a number of identified customs-related matters are contained in 
Article 4.13. 
3.33.  The Parties have attached to the Agreement a Memorandum of Understanding Concerning 
Uniform Regulations for the Interpretation, Applicat ion and Administration of Chapter 4 (MoU). The 
MoU clarifies certain aspects of Chapter 4 in relation to the certificate of origin (referred to in Article 4.1.1); obligations on importations (for  the purposes of Article 4.2.1(d); waiver of 
certificate of origin (for the purposes of Article 4.3); obligations on exportations (in relation to 
Articles 4.4.1 and 4.6.10); record keeping requir ements (with respect to Articles 4.5 and 4.6); 
origin verifications (for the purposes of Articl e 4.6.1); advance rulings (for the purposes of 
Article 4.10); and review and appeal (with respect to Article 4.11). Annex A to the MoU contains a 
common template for a Certificate of origin and corresponding instructions. Annex B to the MoU 
contains common standards for written questionnaires. Annex C to the MoU contains common standards for information required in the application for an advance ruling. 
3.34.  A Rules of Origin and Customs Commi ttee is established under Article 4.14.  
3.3  Export duties and charges,  and quantitative restrictions 
3.35.  Neither Party shall adopt or maintain any prohibition or restriction on the export of any good 
destined to the other Party, except as provided in  the Agreement or in accordance with Article XI 
of GATT 1994, which is, together with its interpreta tive notes, incorporated into and made part of 
the Agreement mutatis mutandis (Article 2.7). The Agreement confirms that export price 
requirements are prohibited in circumstances in which any other form of restriction is prohibited. 
3.36.  A Party shall not adopt or maintain duties, taxes, or other charges on the export of a good 
to the territory of the other Party, unless the duties, taxes, or charges are also adopted or maintained on the good when destined for domestic consumption (Article 2.8). 
3.37.  Without prejudice to the Parties' rights  under the WTO agreement, the provisions on 
national treatment (Article 2.2) and on import and export restrictions (Article 2.7) do not apply to: 
a. actions by Korea or by Canada authorized by the WTO Dispute Settlement Body; 
b. a measure applied by Korea to address market disruption pursuant to procedures that 
have been incorporated into the WTO Agreement; WT/REG362/1 
 
- 21 - 
 
  c. a measure, including that measure's continuation, prompt renewal, or amendment, 
applied by Canada in respect of the export of logs; and the export of unprocessed fish 
pursuant to applicable provincial legislation. 
3.4  Regulatory provisions on trade in goods 
3.4.1  Standards 
3.38.  Chapters 5 and 6 cover sanitary and phytosanitary measures (SPS) and technical barriers to 
trade (TBT). 
3.4.1.1  Sanitary and phytosanitary measures 
3.39.  Under the Agreement, SPS matters are addressed through Chapter 5. Each Party affirms its 
existing rights and obligations with respect to  the other Party under the WTO Agreement on the 
Application of Sanitary Measures (Article 5.3).  
3.40.  Article 5.4 provides that the dispute resolution mechanism set out in Chapter 21 does not 
apply to Chapter 5.  
3.41.  A Committee on Sanitary and Phytosanitary Measures is established to enhance bilateral 
cooperation and consultation on SPS-related matters between the Parties (Article 5.5). Contact 
Points have been designated by each Party to coordinate the Committee meetings. 
3.4.1.2  Technical barriers to trade 3.42.  Chapter 6 covers TBT and applies to all stan dards-related measures that may affect trade in 
goods between the Parties. Chapter 6 applies only to national governments unless otherwise 
specified. The Parties affirm their rights and obligations under the WTO TBT Agreement (Article 6.3). Articles 2 through 9 and Annexes 1 and 3 of the WTO TBT Agreement are 
incorporated into and made part of the Agreement, mutatis mutandis . 
3.43.  The Parties agree to strengthen their cooperation in the field of standards-related measures 
with a view to increasing the mutual understandi ng of their respective systems and facilitating 
access to their respective markets. The Agreement identifies a number of areas for cooperation, 
including encouraging their standardizing bodies to  cooperate through membership in regional and 
international standardizing bodies; encouraging their conformity assessment bodies other than the governments of the Parties to cooperate to pr omote the mutual acceptance of conformity 
assessment results; promoting the accreditation of  conformity assessment bodies on the basis of 
relevant international standards and guides; and pr omoting the acceptance of results of conformity 
assessment bodies that have been recognized under a relevant multilateral agreement or 
arrangement between the Parties' respective accreditation systems or bodies (Article 6.4). The 
Parties also agree to cooperate in sector-specific initiatives, including through means identified under Article 6.5. Moreover, transparency provisions are contained in Article 6.6.  
3.44.  The Agreement contains specific disciplines on automotive standards-related measures. As a 
consequence, a Party shall allow in its market automotive goods originating in the other Party pursuant to the provisions in Article 6.7, that cover, in particular, (i) safety standards incorporation or equivalence
21; (ii) compliance testing; (iii) new technologies; and (iv) cooperation. 
3.45.  Through an exchange of letters22, the Parties agree to establish a technical ad hoc working 
group on standards-related measures related to building products and related assemblies, at the request of either Party, to facilitate trade through cooperation and information sharing on 
standards-related measures in this sector.  
                                               
21 Annex 6-A and 6-B to the Agreement contains certain standards or regulations that, when complied 
with by automotive goods originating in Canada and Kore a, respectively, must be ac cepted equivalent by Korea 
and Canada with the corresponding Ko rea Motor Vehicle Safety Standards and Canadian Motor Vehicle Safety 
Standards. 
22 Neither Party may have recourse to dispute sett lement under the FTA regarding the exchange of 
letters. WT/REG362/1 
 
- 22 - 
 
  3.46.  A Committee on Standards-Related Measures is established to, inter alia , monitor and 
facilitate the implementation of Chapter 6 (Article 6.8).23  
3.4.2  Safeguard mechanisms 3.47.  Section A of Chapter 7 refers to the use of bilateral and global safeguard measures, while 
Article 2.12, complemented by Annex 2-F, establishes the applicable disciplines for agricultural 
safeguard measures under the Agreement.  
3.48.  The Agreement establishes a Committee on Trade Remedies to, inter alia , oversees the 
implementation of Chapter 7 (Article 7.8). 
3.4.2.1  Global safeguards 
3.49.  Each Party retains its rights and obligations under Article XIX of GATT 1994 and the WTO 
Agreement on Safeguards. The Agreement shall not confer any additional rights or impose any 
additional obligations on the Parties with respect to measures taken pursuant to Article XIX of the 
GATT 1994 and the WTO Agreement on Safeguards, except that a Party taking a global safeguard measure may exclude imports of an originating good of the other Party from such measure if those 
imports are not a substantial cause of serious injury or threat thereof (Article 7.1). A Party shall 
not apply or maintain, with respect to the same  good, at the same time a bilateral safeguard 
measure and a global safeguard measure pursuant to Article XIX of the GATT 1994 and the WTO Agreement on Safeguards. 
3.4.2.2  Bilateral safeguards 
3.50.  Articles 7.2 through 7.6 allow for the imposition of bilateral safeguard measures in certain 
circumstances and set out disciplines governing their use. During the transition period
24, a Party 
may apply a bilateral safeguard measure. Such a measure may consist of either (i) a suspension of 
the further reduction of the customs duty on the g ood provide for under the Agreement, or (ii) an 
increase in the rate of customs duty on the good to a level not to exceed the lesser of the MFN 
applied rate of duty in effect at the time the safeguard measures is applied, and the MFN applied 
rate of duty on the good in effect on the day i mmediately preceding the date of entry into force of 
the Agreement. In case of a customs duty applied to a good on a seasonal basis, the calculation 
shall be in relation to each season. 
3.51.  A bilateral safeguard measure may be applie d for such period of time as may be necessary 
to prevent or remedy serious injury pursuant to Article 7.2 of the Agreement. The total period of 
application of a bilateral safeguard measure, including the period of initial application and any 
extension thereof, shall not exceed four years. Where a safeguard proceeding has been initiated, 
the investigation must be completed and any safeguard applied no later than one year after the date of initiation of the proceeding.  
3.52.  No later than 30 days after it applies a bi lateral safeguard measure, a Party shall afford an 
opportunity for the other Party to consult with it regarding appropriate trade liberalizing compensation in the form of concessions having su bstantially equivalent trade effects or equivalent 
to the value of the additional duties expected to result from the bilateral safeguard measure. The 
applying Party shall provide such compensation as  the Parties mutually agree. If the Parties are 
unable to agree on compensation, the Party against whose originating good the safeguard measure is applied may suspend the application of concessions that have trade effects 
substantially equivalent to the safeguard measure.  The right of suspension shall not be exercised 
for the first 24 months during which a safeguard measure is in effect. 
 
 
                                               
23 Annex 6-C to the Agreement complements Article 6.8. 
24 "Transition period" means the period beginning on the date of entry into force of the Agreement and 
ending on the date that is the earliest of 10 years afte r the end of the tariff elimination period for that good; or 
15 years after the entry into force of the Agreement. WT/REG362/1 
 
- 23 - 
 
  3.53.  Article 7.3 allows for the application of provisional safeguard measures in critical 
circumstances. Article 7.5 disciplines the administration of safeguard measures. According to 
Article 7.6, a Party shall not request, regarding proposed safeguard measures, the establishment of a panel under the Agreement's provisions referring to dispute settlement (Chapter 21).  
3.4.2.3  Special safeguards 
3.54.  Article 2.12 provides Korea
25 with the possibility of imposing a (safeguard) duty when the 
aggregate volume of imports in a year of certain Canadian agricultural products26, listed in Korea's 
Schedule in Annex 2-F, exceeds the trigger quanti ty set out in the Annex. Agricultural safeguard 
measures shall not be applied or maintained afte r the date the safeguard duties set out in Annex 
2-F are zero (between 2020 and 2035 depending on the products for which the special safeguard mechanism is applicable). Moreover, Korea shall not apply or maintain an agricultural safeguard 
measure on an originating agricultural good that increases the in-quota duty on a good subject to 
a tariff-rate-quota (TRQ). 
3.55.  The agricultural safeguard duty shall not exceed the lesser of the prevailing MFN applied 
rate, or the MFN applied rate of duty in effect on the day immediately preceding the date of entry 
into force of the Agreement, or the tariff ra te set out in Korea's Schedule to Annex 2-F. 
3.56.  Agricultural safeguard measures may not be  applied or maintained, on the same good, at 
the same time a bilateral safeguard, a global safeguard, or a safeguard applied under the WTO 
Agreement on Agriculture is also applied. 
3.57.  Article 2.12 also contains transparency provisions, and its implementation and operation 
may be the subject of discussion and revi ew in the Committee on Trade in Goods. 
3.4.2.4  Other Safeguard measures 
3.58.  There are no other safeguard provisions in the Agreement applicable to trade in goods.
27  
3.4.3  Anti-dumping and countervailing measures 
3.59.  Section B of Chapter 7 covers antidumping and countervailing measures. 
3.60.  Each Party retains its rights and obligations under the WTO agreement with regard to the 
application of antidumping and countervailing measures. Unless otherwise provided in relation to specific provisions on notification and consultation and on undertakings, nothing in the Agreement 
shall be construed to confer any additional rights  or impose any additional obligations on a Party 
with respect to antidumping or countervailing meas ures. A Party shall not have recourse to dispute 
settlement under the Agreement for matter arising in relation to antidumping and countervailing 
duties. Disputes regarding any such matters shall be settled under the WTO Agreement. 
3.61.  Regarding notification and consultation, Article 7.7 (paragraph 2) nevertheless establishes 
that a Party shall, before initiating an investigation, provide written notification to the other Party 
of its receipt of a properly documented antidumpin g or countervailing duty application, and afford 
the other Party a meeting or other similar opportunity regarding the application, consistent with that Party's domestic law. 
3.62.  In relation to undertakings, after the initia tion of an investigation, written information shall 
be transmitted by the investigating Party to the other Party regarding that Party's laws and 
procedures for requesting consideration of an undertaking. Also, where there is a preliminary affirmative determination of dumping or subsidization and injury caused by it, due consideration 
and adequate opportunity for consultations, shall be afforded to exporters regarding proposed 
                                               
25 Canada does not have the ability to apply such a safeguard, as no products, volumes, or safeguard 
duties have been specifically defined in the Agreement. 
26 The products are: (a) certain beef and pork products; (b) certain apples and pears; (c) unhulled and 
naked barley; (d) certain flour, meal, powder, flakes, granules and pellets of  potatoes; and (e) adzuki beans.  
27 However, a provision on BOP safeguard measure is co ntained in Article 22.4 (tra nsfers), applicable in 
connection with provisions on investment, cross-border trade in services and financial services.  WT/REG362/1 
 
- 24 - 
 
  undertakings, which, if accepted, may result in suspension of the investigations without imposition 
of antidumping or countervailing duties (Article 7.7, paragraph 4).  
3.63.  The Agreement also recognise the desirability  of providing the possibility of using the lesser 
duty rule when imposing antidumping or countervailing duties, in accordance with the Parties' 
domestic laws and regulations. 
3.64.  The Committee on Trade Remedies established under Article 7.8 also oversees the 
implementation of the Agreement's provisions on antidumping, subsidies and countervailing measures. 
3.4.4  Subsidies and State-aid 
3.65.  There are no provisions on subsidies and State aid in the Agreement. Provisions on State 
enterprises are described in Section 5.10.2 below. 
3.4.5  Customs-related proced ures and trade facilitation 
3.66.  The WTO Agreement on Customs Valuation governs the customs valuation rules applied by 
the Parties to their reciprocal trade (Article 2.11). 
3.67.  As described above in the section on rules of origin, Chapter 4 contains a number of 
disciplines principally related to origin procedures but also impacting on other customs-related procedures. Section G of Chapter 4, in particular, a ddresses trade facilitation with the objectives of 
facilitating trade under the Agreement and cooperating in pursuit of trade facilitation initiatives on 
a multilateral basis. Articles 4.16 through 4.20 contain provisions on efficient release of goods in 
order to facilitate trade between the Parties; the use of information technology that expedites procedures for the release of goods (automation); risk management; express shipment; and 
transparency relating to the Parties' respective requirements for imported or exported goods. 
3.5  Sector Specific Provisions on Trade in Goods 3.5.1  Trade in Forest Products 
3.68.  Annex 2-B to the Agreement establishes a Sub-Committee on Trade in Forest Products, 
inter alia, to monitor the implementation of obligations of the Agreement that may affect a matter related to trade in forest products. 
3.5.2  Automotive goods 
3.69.  With respect to internal taxes and emissions regulations related to automotive goods
28, each 
Party shall accord to the products originating in the other Party no less favourable treatment than that accorded to like products originating in a third-party, including as provided in any free trade 
agreement with that third-party (Article 2.9). 
3.70.  Moreover, the Parties shall cooperate to promote bilateral trade and investment in the 
automotive sector, which allows them to realize the benefits of global production and supply chains 
(Article 1.7). 
Annex 2-C to the Agreement establishes a Sub-Committee on Trade in Automotive Goods, inter 
alia, to monitor the implementation of obligations of the Agreement that may affect a matter related to trade in automotive goods. A Party shall allow into its market automotive goods 
originating in the other Party pursuant to the provisions of Article 6.7.
29 
 
                                               
28 The terms "automotive good" mean s all forms of motor vehicles, systems, and parts thereof falling 
under HS Chapters 40, 84, 85, 87, and 94, except for tr actors, snow mobiles and golf carts, and construction 
machinery. See Article 2.15 containing the definitions applicable to terms used under Chapter 2. 
29 See the section on "TBT" above. WT/REG362/1 
 
- 25 - 
 
  4  PROVISIONS ON TRADE IN SERVICES AND INVESTMENT 
4.1.  Chapter 8 contains disciplines on investment; while Chapter 9 covers cross-border trade in 
services30; Chapter 10 covers financial services; and Chapter 11 covers telecommunications. 
Annexes I and II to the Agreement, listing existing and possible future non-conforming measures, 
constitute integral parts of the Parties' commitments. The same applies in relation to Annex III 
listing the Parties' non-conforming measures in relation to commitments on financial services. Chapter 12 governs temporary entry for business persons. 
4.2.  In parallel to the negotiation of the Agreement, and in particular in relation to investment 
cross-border trade in services, the Parties have exchanged letters to cover issues such as: 
measures related to resource recycling and to policies to encourage low-emission motor vehicle distribution; regulations that prohibit an ente rprise from concurrently holding two or more 
business licences to supply different services; regulations applicable to the establishment, 
extension, or transfer of educational institutions within certain geographic areas under the Seoul Metropolitan Area Readjustment Planning Act; measures that allow higher education institutions to 
jointly operate curricula only with higher education institutions organized under Korean law, or 
with foreign higher education institutions that have obtained accreditation from a foreign government or authorized foreign accreditation bodies; measures that may establish requirements regarding the types and quantities of raw materials for producing liquor under the Liquors Act and 
its subordinate regulations; and regulations that control a rail transportation company's ability to 
stop supplying its service; regulations on zoning and land use. Moreover, the Parties also agreed, through such an exchange of letters, that cross-border trade in gambling and betting services is 
not subject to Chapter 9 (cross-border trade in services) and investment in these services is not 
subject to Chapter 8 (investment). The exchange  of letters also covers certain conditions 
applicable to the granting of a licence to supply public telecommunications services to a person of 
the Party in which a person of the other Party holds an equity interest. 
4.1  Scope and definitions 4.3.  Chapter 9 applies to measures of a Party affecting cross-border trade in services by service 
suppliers of the other Party. Cross-border supply of a service covers the GATS modes of supply 1, 
2 and 4
31, but does not include the supply of a service in the territory of a Party by a covered 
investment. It also covers GATS mode 3, though only in relation to market access and domestic regulation. The supply of a service in the territory of a Party by a covered investment
32 is therefore 
not covered by Chapter 9 in relation to national and MFN treatment. Moreover, Chapter 9 does not 
apply to financial services (covered by Chapter 10); government procurement; subsidies or grants. In relation to air services, only aircraft repair and maintenance services, the selling and marketing 
of air transport services, and computer reservation system services are covered. As under the 
GATS, services supplied in the exercise of govern mental authority in a Party's territory are not 
covered. 
4.4.  Chapter 8 applies to measures adopted or ma intained by a Party relating to investors of the 
other Party, covered investment, and all investment in its territory (with respect to Articles 8.8, 
8.10 and 8.16 on performance requirements, investment and environment, and corporate social responsibility). 
4.2  Denial of benefits 
4.5.  Under Article 9.10, a Party may deny the benefits of cross-border trade in services to a 
service provider of the other Party if the service pr ovider is an enterprise owned or controlled by 
persons of a third-party, and the denying Party adopts or maintains measures with respect to the 
third-party or a person of the third-party that prohibit transactions with the enterprise of that 
                                               
30 In the event of an inconsistency between Chapter 8 and another Chapter, th e other Chapter prevails 
to the extent of the inconsistency. Moreover, Chapter 8 does not apply to measures adopted or maintained by a Party to the extent that they are covered by Chapter 10 (Financial services). 
31 Chapter 9 applies to the presence of a service supplier in the territory of a Party, while Chapter 12 
applies to the temporary entry of cove red categories of business persons. 
32 The term "covered investment" means, with respect to a Party, an investment in its territory of an 
investor of the other Party existing on the date of entr y into force of the Agreement, or established, acquired, 
or expanded thereafter. WT/REG362/1 
 
- 26 - 
 
  would be violated or circumvented if the benefits of Chapter 9 were accorded to the enterprise. 
Moreover, a service provider of the other Party may also be denied the benefits of Chapter 9 if it is 
an enterprise owned or controlled by a person of the denying Party and if such enterprise has no substantive business operation in the territory of the other Party. The same approach is followed, 
in relation to investment (Chapter 8), for investors of the other Party and for their investments 
(Article 8.14). 
4.3  General provisions on trade in services and investment 4.3.1  Market access 
4.6.  In relation to cross-border trade in servic es (Chapter 9), a Party shall not adopt or maintain, 
either on the basis of a regional subdivision or of its entire territory, measures that impose the 
types of limitations covered by Paragraphs 2(a) to 2(e) of Article XVI of the GATS (Article 9.4). 
Almost identical commitments are made by the Parties for financial institutions or investors of the 
other Party (Article 10.4).  
4.7.  However, the Parties' commitments on market access do not apply to existing 
non-conforming measures listed in Annex I to the Agreement and/or any (future) measure listed in 
Annex II of the Agreement. It can be noted that  both Parties introduce a GATS floor commitment 
for market access. Canada and Korea reserve their right to adopt or maintain any measure that is not inconsistent with their obligations under Article XVI of the GATS. Improvements on Canada's 
market access commitments under the GATS are listed in Canada's Appendix II-A. A similar 
approach is chosen by Korea and its improvements on market access commitments under the GATS are listed in Korea's Appendix II-A. In relation to financial services, the provisions on market 
access shall not apply to existing non-conforming measures listed in Section A of Annex III to the 
Agreement or to measures taken by a Party with re spect to sectors, sub-sectors, or activities as 
set out in Section B of that Party's Schedule to Annex III to the Agreement.
33  
4.8.  Chapter 8 (investment) does not contain market access obligation along the lines of GATS 
Article XVI, but, as noted above, Article 9.1.3 stipulates that market access and domestic regulation provisions specified for cross-border trade in services shall also apply to measures by a Party affecting the supply of a service in its territory by a covered investment. 
4.3.2  National treatment and MFN 
4.9.  For cross-border trade in services, Articl es 9.2 and 9.3 contain national treatment and MFN 
clauses applicable to the Parties' service providers. In relation to investment, similar provisions are 
contained in Articles 8.3 and 8.4 with respect to the Parties' investors and covered investments 
when they are related to the establishment; acquisition; expansion; management; conduct; operation; and on sale or other disposition of investments. For financial services, national 
treatment is granted by each Party to investors of the other Party with respect to establishment, 
acquisition, expansion, management, conduct, operation and sale or other disposition of financial institutions and investments in financial institutions in its territory. The same treatment is also granted to financial institutions of the other Party and their investments in financial institutions 
(Article 10.2). Moreover, national treatment is gr anted by each Party to cross-border financial 
service suppliers of the other Party, under spec ified terms and conditions and for the services 
specified for each Party in Annex 10-A. MFN treatment is granted by each Party to investors of the 
other Party, financial institutions of the other Party, investments in financial institutions, and 
cross-border financial services suppliers of the other Party (Article 10.3).  
4.10.  The provisions on MFN and national trea tment and the Parties' related commitments (in 
Articles 8.3, 8.4, 9.2, 9.3, 10.2 and 10.3) shall not apply to measures taken by a Party with 
respects to sectors, sub-sectors, or activities as set out in its lists of non-conforming measures in Annexes I, II, and III. Moreover, in relation to investment, the MFN and national treatment obligations do not apply to procurement by a Party or a State enterprise; or subsidies or grants 
provided by a Party or a State enterprise, including Government-supported loans, guarantees, and 
insurance (Article 8.9). 
                                               
33 Annex 9-A refers to consultations regarding non-co nforming measures maintained by a sub-national 
government. WT/REG362/1 
 
- 27 - 
 
  4.3.3  Local presence 
4.11.  In relation to cross-border trade in services, neither Party shall require a service supplier of 
the other Party to establish or maintain a representative office or any form of enterprise, or to be resident, in its territory as a condition for the cross-border supply of a service (Article 9.5).  
4.12.  The Parties' commitments on local presence  do not apply to the non-conforming measures 
and/or services sectors which they list in Annexes I, II and/or III to the Agreement.  
4.3.4  Performance requirements 4.13.  With respect to investment, neither Party shall impose or enforce performance requirements 
of the types listed in Article 8.8. Requirements to use a technology to meet generally applicable 
health, safety, or environmental requirement is not however to be construed to be inconsistent with Article 8.8.1(f) (on transfer of technology, production process or other proprietary knowledge 
to a person in a Party's territory). Other limitations and reservations are listed under Article 8.8. 
4.14.  The Parties' commitments on performance requirement do not apply to the non-conforming 
measures and/or services sectors which they list in Annexes I, II and/or III to the Agreement.  
4.3.5   Senior Managers and Boards of Directors 
4.15.  With respect to investment, neither Party shal l require that an enterprise of that Party that 
is a covered investment, appoints natural persons of a particular nationality to senior management positions. A Party may require that a majority of the board of directors, or a committee, or an 
enterprise of that Party, which is a covered investme nt, be of a particular nationality, or resident in 
the territory of that Party, provided that the requ irement does not materially impair the ability of 
the investor to exercise control over its investment (Article 8.7). The same types of prohibition 
apply to senior management and boards of directors of financial institutions (Article 10.8). 
4.16.  The Parties commitments on Senior Managers and Boards of Directors do not, however, 
apply to the non-conforming measures and/or serv ices sectors which they list in Annexes I, II 
and/or III to the Agreement.  
4.3.6  Movement of natural persons 4.17.  Chapter 12 applies to measures affecting the movement of natural persons of a Party into 
the territory of the other Party under the follo wing categories: business visitors; traders and 
investors; intra-company transferees; professional s; and spouses. Annex 12-A defines, for both 
Parties, the conditions and modalities applicable to each of these categories. In the case of business visitors, the covered activities are set out in Appendix 12-A-1. In the case of 
professionals
34 listed in Appendix 12-A, each Party shall grant temporary entry and provide a work 
permit or a visa to business persons seeking to en gage in a business activity, if the requirements 
listed by each Party in that Appendix  for each professional are fulfilled.  
4.18.  While requirements and procedures relating to immigration formalities remain within the 
sphere of competence of each Party, the Agreemen t establishes some principles for the granting of 
temporary entry to business persons of the other Party (Article 12.3); transparency of information on temporary entry (Article 12.4); and the establishment of contact points to consider matters 
pertaining to Chapter 12. 
4.19.  The dispute settlement procedures provided in Chapter 21 shall not apply to Chapter 12 
unless the matter involves a pattern of practice, and all administrative remedies regarding the 
particular matter have been exhausted.  
 
 
 
                                               
34 "Professional" means a national of a Party who is  engaged in a specialty occupation, as stated in 
Appendix 12-A-2, who is not enga ged in the field of education. WT/REG362/1 
 
- 28 - 
 
  4.4  Liberalization commitments 
4.20.  A "negative list" approach to scheduling commi tments is used in relation to investment and 
cross-border trade in services. In connection with obligations on national and MFN treatment, market access, and local presence, Article 9.6 (c ross-border trade in services) provides for the 
possibility to maintain existing non-conforming measures listed in each Party's Schedule to 
Annex I of the Agreement and to amend them to the extent that the amendment does not 
decrease the conformity of the measure as it ex isted immediately before the amendment. Article 
9.6 also provides for the possibility to maintain or adopt new non-conforming measures in sectors, 
sub-sectors, or activities listed in each Party' s Schedule to Annex II of the Agreement. For both 
Parties, Appendix II-A lists improvement to their commitments for the obligations under GATS Article XVI (market access). In connection with pr ovisions on national and MFN treatment, senior 
management and boards of directors, and perfor mance requirements, Article 8.9 follows the same 
approach for investment. Non-conforming measures in financial services are listed by each Party in Annex III in relation to Article 10.9.  
4.21.  The sections below compare the Parties' liberalization commitments under the Agreement 
and their GATS commitments. Each Party's GATS sch edule is compared to Annexes I, II and III to 
the Agreement. After recalling GATS MFN exemptions, Tables 4.1 and 4.2 summarize specific commitments under the Agreement, by sectors and sub-sectors and compare them with GATS 
commitments. Improvements over existing GATS commitments are either a reduction in market 
access and/or national treatment limitations, a relaxation of the form of establishment under mode 3, and/or additional commitments. Horizontal  limitations in the GATS Schedule of Specific 
Commitments and reservations covering all sectors are not included in the tables but are 
addressed separately. Mode 4 commitments and limi tations are, to a large extent, also excluded 
from the tables. The following sections are to be read in conjunction with the Parties' schedules of 
commitments under the Agreement. 
4.4.1  Canada 4.4.1.1  MFN and horizontal commitments 4.22.  In the GATS, Canada took commitments in 105 out of 155 services sectors. It did not make 
commitments, inter alia , on certain specific business services; postal services, as well as 
audiovisual services; education services; health services; tourist guides services; recreational and cultural and sporting services; and some transpor t services (space and pipeline services). Under 
the Agreement, all sectors are covered, though a number of non-conforming measures are listed in 
Annexes I, II, and III to the Agreement.  
4.23.  One entry in Canada's list of non-conforming measures (Annex I) covers all existing 
non-conforming measures of all provinces and terr itories. As clarified by Canada, Appendix I-A 
provides an illustrative, non-binding list of non-conforming measures maintained at the sub-national level of government, drawn from Canada's 2005 GATS Revised Conditional Offer on Services. This list is provided for transparency purposes only, and is neither exhaustive nor 
binding. These sectors listed cover a number of bu siness services, distribution services, tourism 
and travel-related services as well as some road transport services.
35 Appendix II-A contains 
improvements to Canada's market access commitments in the GATS for, inter alia , sub-national 
measures. 
4.24.  In relation to future measures, and for obligations related to national and MFN treatment 
and local presence, Canada reserves its right to adopt or maintain a measure relating to social 
services. The reservations covers public law enfo rcement and correctional services, as well as the 
following services, to the extent that they are social services, established or maintained for a public purpose: income security or insurance; social security or insurance; social welfare; public education; public training; health; and child care.
36  
 
                                               
35 The information contained in Appendix I-A is dr awn from Canada's May 2005 revised conditional offer 
on services (TN/S/O/CAN/Rev.1, 23 May 2005). 
36 Canada reiterated that it had not taken commit ments under the GATS for education; health; and 
other social services. WT/REG362/1 
 
- 29 - 
 
  4.25.  Under the GATS, Canada scheduled MFN exemptions for audiovisual services; 
fishing-related services, some financial services, and some transport services (maritime and air 
services). Some services incidental to agricultural  activities were also reserved, while investment-
related disputes were subject to reciprocity requirements. Under the Agreement, MFN treatment 
commitments for investment are referred to in Article 8.4, and, for cross-border trade. Article 9.3 
governs the Parties' MFN treatment commitments, while applicable MFN exemptions are listed in Annexes I and II. With respect to financial services, the MFN commitment is contained in Article 10.3 and non-conforming measures are lis ted in Annex III to the Agreement. Under the 
Agreement, as under the GATS, Canada reserves  MFN non-conforming measures that might be 
taken for fishing-related activities. It also registers other MFN exemptions for some existing measures (for example auditing, water transporta tion and services related to the treatment of 
uranium). Future non-confirming measures may, under the Agreement, be taken in favour of 
aboriginal groups; social services, as well as on some air transport activities, or services related to water transportation. For some financial services (trade in securities for example), Canada makes 
MFN reservations. It also reserves its right to adopt or maintain any measures that accord more 
favourable treatment to the service suppliers or investors of third-parties under any bilateral or multilateral international agreement in force or signed prior to the date of entry into force of the Agreement. Unlike under the GATS, Canada does not have MFN exemptions for audiovisual 
services, though a relatively broad carve out is ma de for cultural industries; and business services 
incidental to agriculture.  
4.26.  In relation to horizontal reservations, Canada lists, under the GATS, some market access 
reservations for establishment in banking (mode 3) and in connection with cultural heritage-
related services. Some national treatment reservations are also made for some sub-federal regulations. Some limitations at the federal level are registered in connection with residency 
requirements; authorizations required to provide certain services; as well as some citizenship 
requirements related to the composition of cert ain boards of directors. Under the Agreement, 
Canada replicates some of these reservations. It also lists horizontal reservations in investment by moral persons as well as acquisition of equities and shares. Canada preserves the right to adopt or 
maintain non-conforming measures for the ownership of land (ocean front), which is also unbound 
under the GATS; and non-conforming measures in favour of minority groups and in connection with aboriginal affairs.  
4.27.  The Agreement also contains a broad cu ltural carve out (Article 22.6) by which the 
Agreement does not cover measures adopted or maintained by Canada
37 with respect to cultural 
industries38, except as specifically provided in Articles 1.6 (cultural cooperation) and 2.3 (tariff 
elimination). It is understood that Canada considers that audio-visual services, recreational and 
cultural services, as well as certain subsectors in the category "other business services" (such as printing and publishing services) are services related to culture.  
4.4.1.2  Sector specific commitments 
4.28.  The following section identifies some of the main differences, by sector, between Canada's 
GATS schedule and its sector-specific commitments und er the Agreement. It should also be read in 
conjunction with Annexes I, II, and III of the Agreement.  
4.29.  Canada clarifies that its market access commitments under the Agreement refer back to 
those in Canada's GATS schedule of commitments (GATS floor reservation). The absence of an Annex I or Anne II reservations for a particular sector does not mean that Canada is fully open. If 
Canada is unbound or partially open under the GATS for the market access obligation, then this 
level of commitment continued into the Agreement,  with the addition of improvement listed under 
Appendix II-A. 
                                               
37 The exception also applies to Korea. 
38 "cultural industries" means persons engaged in any of the following activities: (a) the publication, 
distribution, or sale of books, magazines, periodicals or  newspapers in print or machine readable form but not 
including the sole activity of printing or typesetting any of the foregoing; (b) the production, distribution, sale or exhibition of film or video recordings or audio or vi deo music recordings; (c) the publication, distribution, or 
sale of music in print or machine readable form; (d ) radio communications in which the transmissions are 
intended for direct reception by the general public; (e) radio, television and cable broadcasting undertakings; 
or (f) satellite programming an d broadcast network services. WT/REG362/1 
 
- 30 - 
 
  Table 4.1 Canada: comparison between the GATS and Agreement specific commitments 
Sectors / Sub-sectors GATS  FTA 
Compared 
to the 
GATS Commitments 
on existing 
Measuresb Commitments  
on future  
Measuresc 
1. Business services     
A. Professional Services Partial  Improved Partial Full 
B. Computer and Related Services  Partial  Improved Full Full 
C. Research and Development Services  Partial  Improved Full Full 
D. Real Estate Services  Partial  Improved Full Full 
E. Rental/Leasing Services without Operators  Partial  Improved Full Full 
F. Other Business Services Partial  Similar Partial Partial 
2. Communication services      
A. Postal services --- Improved Partial Full 
B. Courier services Partial  Improved  Full Full 
C. Telecommunication services  Partial  Improved  Partial Full 
D. Audiovisual services --- Similar --- --- 
3. Construction and related engineering services      
A. General construction work for buildings Partial  Improved Full Full 
B. General construction work for civil Engineering Partial  Improved Full Full 
C. Installation and assembly work  Full Similar Full Full 
D. Building completion and finishing work  Full Similar Full Full 
E. Other Partial  Improved Full Full 
4. Distribution services     
A. Commission agents' services Partial  Improved Full Partial 
B. Wholesale trade services Partial  Improved Full Partial 
C. Retailing services Partial  Improved Partial Partial 
D. Franchising Partial  Improved Full Full 
5. Education services     
A. Primary education services --- Similar --- --- 
B. Secondary education services  --- Similar --- --- 
C. Higher education services  --- Similar --- --- 
D. Adult education --- New Partial  Partial  
E. Other education services  --- New  Partial  Partial  
6. Environmental services     
A. Sewage services Full Similar Full Full 
B. Refuse disposal services Full Similar Full Full 
C. Sanitation and similar services  Full Similar Full Full 
D. Other Full Similar Full Full 
7. Financial services     
A. All insurance and insurance-related services  Partial  Improved Partial Partial 
B. Banking and other financial services Partial  Improved Partial Partial 
8. Health related and social services     
A. Hospital services --- Similar --- --- 
B. Other Human Health Services --- Similar --- --- 
C. Social Services --- Similar --- --- 
D. Other --- Similar --- --- 
9. Tourism and travel related services      
A. Hotels and restaurants (including catering) Partial  Improved Full Full 
B. Travel agencies and tour operators services Partial  Improved Full Full 
C. Tourist guides services --- Improved Full Full 
10. Recreational and cultural and sporting services     
A. Entertainment services --- Similar --- --- 
B. News agency services --- Similar --- --- 
C. Libraries, archives, museums and other cultural services --- New Partial Partial 
D. Sporting and other recrea tional services  --- New  Partial Partial 
11. Transport services      
A. Maritime Transport Services Partial  Improved Partial Partial 
B. Internal Waterways Transport --- Improved Partial Partial 
C. Air Transport Services Partial  Improved Partial Partial 
D. Space Transport  --- Improved Full Full 
E. Rail Transport Services Partial  Improved Partial Full 
F. Road Transport Services Partial  Improved Partial Full 
G. Pipeline Transport  --- Improved Full Full 
H. Services auxiliary to all modes of transport  Partial  Improved Partial Full 
I. Other Transport Services  --- Improved Full Full 
General Note: MFN and Horizontal limitations, as well as Mode 4 commitments/limitations not considered. 
Partial:  Specific commitments subject to some limitation(s) under market access or national treatment, 
under any of the three modes. 
Full: Specific commitments not subject to limitation(s) under market access or national treatment, under 
any of the three modes. WT/REG362/1 
 
- 31 - 
 
  ---: No specific commitment. 
New: New commitments under the Agreement (full or partial, with or without limitations) which can, in 
most but not all cases, be seen as "improved". 
Improved: Overall improved commitments made under the Agreement compared to those under the GATS. 
Similar: Similar commitments (Agreement vs GATS); though possibly, in individual cases, with limited 
improvements and/or limited  additional reservations. 
Limited: Some additional limitations (as compared to GATS commitments). 
a Including limitations at the sub-federal level.  
b A general carve-out is made to cover provincial measures, though a limited number are contained in 
an indicative list (Appendix I-A).  
c A GATS floor reservation is listed by Canada. Ma rket access improvements are nevertheless also 
listed in Appendix II-A for limitations in Canada's GATS Schedules of Specific Commitments in connection with measures ta ken at the sub-federal level.
 
Source:  Draft Consolidated GATS Schedule of Specific Commitments (S/DCS/W/CAN), prepared by the 
Secretariat (in 2003) and Canada's Schedules annexed to the Agreement.  
4.4.1.2.1  Business services 
4.30.  While, under the GATS, a number of sub-sectors were only partially covered, or with 
limitations, Canada broadens the coverage of its commitments under the Agreement. This is 
particularly the case for computer and related services; research and development services; real estate services; and rental and leasing services. Some existing limitations are listed as non-
conforming measures, particularly for auditing and some services incidental to mining. Limitations 
are also registered for future measures for the statutory inspection and certification of vessels on behalf of Canada. While the overall coverage of Canada's commitments is increased through the use of the negative list approach, additional improvements are also made in market access for a 
relatively wide range of sub-sectors, through the removal of a number of sub-federal limitations 
that are listed in Canada's commitments under the GATS.
39 As indicated above Canada's Schedule 
to Annex I contains an illustrative, non-binding list of business services-related non-conforming 
measures maintained at the sub-national level of government. The exception for cultural industries 
applies to some subsectors in the category "other business services". 
4.4.1.2.2  Communication services 
4.31.  Full commitments are made in the Agreement for courier services40 (only partially unbound 
under GATS), whereas partial commitments are made for postal services.41 In relation to provincial 
reservations, some additional improvements are ma de in market access under mode 3. In relation 
to telecommunication services, Canada lists national treatment non-conforming measures with 
respect to telecommunications transport networks and services, and radio communication; while 
broadcasting remain excluded. Canada also clarifies that its commitments under the Agreement include only one reservation on foreign investment restriction, which has been improved as 
compared to the relevant GATS reservation. Regarding the commitments on future measures, 
Canada does not have any Annex II reservations for telecommunications services. The exception for cultural industries applies to audiovisual services (unbound under the GATS). 
                                               
39 These improvements are listed in Appendix II-A of Canada's Annex II to the Agreement and cover 
accounting, auditing and book-keeping services; archit ectural services, engineering services; integrated 
engineering services, urban planning and landscape architectural services; real estate services; management 
consulting services; investigation and security services; related scientific and technical consulting services; as 
well as some other business services. 
40 Canada clarifies that, while courier services are li sted in the industry classification element of two 
reservations – one for land transportation and one for air transportation – the intent was to ensure that Canada's fully liberalized regulatory regime for courier services respects Canada's regulatory transportation 
frameworks. It also further confirms that, in Appendix II-A, the illustrative list of sub-federal non-conforming 
measures, Nova Scotia and Manitoba remove their econ omic needs test for courie r services, which were the 
only limitations maintained in the sector. Canada's co urier market is therefore unrestricted and open to 
competition. 
41 Canada clarifies that the lack of an explicit restriction in a subsector (e.g. postal services) does not 
automatically imply that Canada has ma de full commitments in that subsecto r. In particular, Canada has taken 
an Annex II reservation that permits it to maintain measures that are not inconsistent with its GATS commitments. Further Canada maintains a monopoly for the provision of universal postal services.  WT/REG362/1 
 
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  4.4.1.2.3  Construction and related engineering services 
4.32.  Under the Agreement, this sector is fully covered for measures taken by the Federal 
Government without limitations, while general construction is subject to some limitations under the GATS. Some market access improvement is also made in relation to provincial measures 
related to general construction work for civil engineering. 
4.4.1.2.4  Distribution services 4.33.  Sectoral coverage is expanded in all sub- sectors. Canada makes, however, one reservation, 
which allows only Canadian citizens or residents and Canadian corporations owned by Canadian 
citizens or residents to obtain a licence to operate duty-free shops.
42 The exclusion on the 
distribution, wholesale trade and retailing services for books, magazines, periodicals or newspapers, as well as for audio, music and video recordings is lifted but the broad carve out of 
cultural services may limit parts or all of these services activities. Some provincial non-conforming 
measures are listed in relation to citizenship and local presence requirements, as well as in connection with an economic needs test. Some market access improvements are registered in 
connection with sub-federal measures related to wholesale trade services (marketing of fish 
products).  
4.4.1.2.5  Educational services 4.34.  Education services (unbound under the GATS) are covered by the liberalization obligations 
of the services and investment chapters but are subject to a broad reservation with respect to 
future measures. Canada confirms that its commitments with respect to adult and other education services are improved to the extent that they are not a social service and are provided on a 
commercial basis. Canada's reservations does not cover private education services. 
4.4.1.2.6  Environmental services 4.35.  As under the GATS, full commitments are made without limitations.  
4.4.1.2.7  Financial services 
4.36.  Canada builds upon its commitments under GATS. Canada clarifies that sub-federal 
(provincial) measures are covered by the Agreement on a negative lists basis and sub-federal market access is bound at GATS level. As compared to its GATS Schedule, Canada also removes 
some market access limitations under mode 3 for both banking services and insurance services.  
4.4.1.2.8  Health relate d and social services 
4.37.  The sector (unbound under the GATS) is covered by the liberalization obligations of the 
services and investment chapters but, as in the ca se of education, is subject to a broad reservation 
with respect to future measures. The reservation cove rs health services to the extent that they are 
social services established or maintained for a public purpose. 
4.4.1.2.9  Tourism and travel related services 
4.38.  Only partially covered under GATS, the entire sector is fully covered under the Agreement, 
without limitations for measures taken by the Federal Government . Some market access 
improvements are made for sub-federal measures related to tourism and travel related services in 
connection with residency, citizenship and local presence requirement and taxation of 
non-residents. 
4.4.1.2.10  Recreational, cult ural and sporting services 
4.39.  The exception for cultural industries applie s to recreational, cultural and sporting services 
(unbound under the GATS). Canada notes that the exception for cultural industries relies on a closed definition of activities and as such, does not apply to all elements of the recreational, 
                                               
42 Under the GATS, Canada did not take co mmitments for duty-free shop services. WT/REG362/1 
 
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  cultural and sporting services classification found under the Services Sectoral Classification List of 
the WTO. For example, libraries, archives, museums, as well as sporting and other recreational 
services are not included under the definition used to exempt cultural industries.  
4.4.1.2.11  Transport services 
4.40.  In transport services, partially covered in its GATS schedule, Canada expands its 
commitments, including for international maritime transport services. At the same time, it maintains a number of reservations for existing and future measures, particularly for domestic maritime transport services, as well as for some as pects of air transport services, cabotage applied 
to road transport, as well as some existing services auxiliary to all modes of transport. Some 
improvements are also made by withdrawing market access limitations on provincial measures in railway and road passenger and freight transportation. 
4.4.2  Korea 
4.4.2.1  MFN and horizontal commitments 4.41.  In its GATS schedule, Korea took commitm ents in 98 out of 155 services sectors. While 
partial commitments are made for many sectors, real estate services, postal and courier services, 
the entire education sector, some environmental services, the entire health related and social services sector and recreational and cultural an d sporting services, and some transport services 
(internal waterways transport, space, rail and pipeline transport services) are unbound under the 
GATS. Under the Agreement all the sectors are covered, though a number of non-conforming 
measures are listed in Annexes I to III. 
4.42.  Korea's only MFN exemption under the GATS is for computerized reservation systems. 
Under the Agreement, while Korea does not list any non-MFN existing measures, it registers a 
number of future reservations it may take in some sectors or sub-sectors for which it has no GATS commitments. The specific sectors, sub-sectors or activities for which Korea may maintain existing 
or adopt new or more restrictive measures that do not conform with MFN obligations under 
Article 9.3 (for cross-border trade in services) or 8.4 (for investment) include measures for: preferential treatment for disadvantaged groups ; taxi services and scheduled passenger road 
transportation services or some freight road transportation services; internal waterways 
transportation services and space transportation services; broadcasting services in various forms; 
education services, at various levels and for various specialties; social services; and the provision of international maritime passenger transportation services, and maritime cabotage. Korea also 
reserves its right to adopt or maintain any measures that accord more favourable treatment to 
service suppliers or investors of third-parties under any bilateral or multilateral international agreement in force or signed prior to the date of entry into force of the Agreement. 
4.43.  Under the GATS, Korea has horizontal reservations on the purchase of land, in relation to 
establishment, and the acquisition of stocks for investment purposes. Under the Agreement, it replicates some of these reservations. Korea also  has horizontal reservations for measures for 
disadvantaged groups and reserves its rights to adopt or maintain any measure that is not 
inconsistent with its obligations pursuant to Article XVI of GATS (market access) as set out in its 
schedule of specific commitments under the GATS. 
4.44.  A GATS floor commitment is contained in Korea's list of future non-conforming measures.  
4.45.  As it is the case for Canada, the Agreement's cultural carve out (Article 22.6) applies to 
Korea. Measures adopted or maintained by Korea wi th respect to cultural industries are therefore 
excluded from Korea's commitments.  
4.4.2.2  Sector specific commitments 
4.46.  The following section identifies some of the main differences, by sector, between Korea's 
GATS schedule and its sector-specific commitments und er the Agreement. It should also be read in 
conjunction with Annexes I, II, and III of the Agreement.  WT/REG362/1 
 
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  4.47.  As a consequence of the approach chosen (negative list), the coverage of Korea's 
commitments under the Agreement is expended for most sectors, as compared to its commitments 
under GATS. While some limitations are listed as non-conforming measures, in particular in relation to the requirement to establish an office in Korea as a condition to perform certain 
activities (applicable for some sectors, but not all), Korea is of the view that the commitment on 
establishment requirement or local presence is not covered under the GATS and that, consequently, this requirement was not required to be listed in its GATS Schedule. Korea also considers that the Agreement does not include additional limitations, as compared to its 
commitments under GATS, and that its commitments under the Agreement constitute a more 
liberalized version of its GATS commitments.  
Table 4.2 Korea, Republic of: comparison  between GATS and Agreement specific 
commitments 
Sectors / Sub-sectors GATS  FTA 
Compared 
to GATS Reservation(s) 
for existing  
non-conforming 
measure(s) Reservation(s) 
for future  
non-conforming 
measure(s) 
1. Business services     
A. Professional Services Partial  Improved Partial Partial 
B. Computer and Related Services  Full Similar Full Full 
C. Research and Development Services  Partial  Improved Partial Partial 
D. Real Estate Services  --- New Partial Partial 
E. Rental/Leasing Services without Operators  Partial  Improved*  Partial Full 
F. Other Business Services Partial  Improved Partial Partial 
2. Communication services      
A. Postal services --- New Full Partial 
B. Courier services --- New Partial Full 
C. Telecommunication services  Partial  Improved Partial Partial 
D. Audiovisual services Partial  Improved*  Partial --- 
3. Construction and related engineering services      
A. General construction work for buildings Partial  Improved*  Partial Full 
B. General construction work for civil Engineering Partial  Improved*  Partial Full 
C. Installation and assembly work  Partial  Improved*  Partial Full 
D. Building completion and finishing work  Partial  Improved*  Partial Full 
E. Other Partial  Improved*  Partial Full 
4. Distribution services     
A. Commission agents' services Partial  Improved*  Partial Partial 
B. Wholesale trade services Partial  Improved*  Partial Partial 
C. Retailing services Partial  Improved*  Partial Partial 
D. Franchising Partial  Improved Full Partial 
5. Education services     
A. Primary education services --- Similar --- --- 
B. Secondary education services  --- Similar --- --- 
C. Higher education services  --- New Partial --- 
D. Adult education --- New Partial --- 
E. Other education services  --- New Partial --- 
6. Environmental services     
A. Sewage services Partial  Improved Partial Partial 
B. Refuse disposal services Partial  Improved Partial Partial 
C. Sanitation and similar services  --- New Partial Partial 
D. Other Partial  Improved Partial Partial 
7. Financial services     
A. All insurance and insurance-related services  Partial  Improved Partial Partial 
B. Banking and other financial services Partial  Improved Partial Partial 
8. Health related and social services     
A. Hospital services --- Similar --- --- 
B. Other Human Health Services --- Similar --- --- 
C. Social Services --- Similar --- --- 
D. Other --- Similar --- --- 
9. Tourism and travel related services      
A. Hotels and restaurants (including catering) Partial  Improved Partial Partial 
B. Travel agencies and tour operators services Full Similar Full Full 
C. Tourist guides services Partial  Improved Full Partial 
10. Recreational and cultural and sporting services     
A. Entertainment services --- New Partial Partial 
B. News agency services --- New Partial Partial 
C. Libraries, archives, museums and other cultural services  --- New Partial Partial 
D. Sporting and other recreational services  --- New Partial Partial WT/REG362/1 
 
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  Sectors / Sub-sectors GATS  FTA 
Compared 
to GATS Reservation(s) 
for existing  
non-conforming 
measure(s) Reservation(s) 
for future  
non-conforming 
measure(s) 
11. Transport services      
A. Maritime Transport Services Partial  Improved Partial Partial 
B. Internal Waterways Transport --- New Full Partial 
C. Air Transport Services Partial  Improved Partial Full 
D. Space Transport  --- New Full Partial 
E. Rail Transport Services --- New Partial Full 
F. Road Transport Services Partial  Improved Partial Partial 
G. Pipeline Transport  --- New Full Partial 
H. Services auxiliary to all modes of transport  Partial  Improved Partial Full 
I. Other Transport Services  Partial  Improved Full Full 
General Note: MFN and Horizontal limitations, as well as Mode 4 commitments/limitations not considered. 
Partial:  Specific commitments subject to some limitation(s) under market access or national treatment, 
under any of the three modes. 
Full: Specific commitments not subject to limitation(s) under market access or national treatment, under 
any of the three modes. 
---: No specific commitment. New: New commitments under the Agreement (full or partial, with or without limitations) which can, in 
most but not all cases, be seen as "improved". 
Improved: Overall improved commitments made under the Agreement compared to those under the GATS. 
Similar: Similar commitments (Agreement vs GATS); though possibly, in individual cases, with limited 
improvements and/or limited  additional reservations. 
Limited: Some additional limitations (as compared to GATS commitments). 
*: Subject to the interpretation of Article XVII of the GATS. 
Source:  Draft Consolidated GATS Sc hedule of Specific Commitments (S/D CS/W/KOR/Rev.1), prepared by the 
Secretariat (in 2003) and Korea's Schedules annexed to the Agreement.  
 
4.4.2.2.1  Business services 
4.48.  Through the negative listing, coverage under the Agreement is broadened compared to 
Korea's commitments under the GATS. This is in particular the case for real estate services (unbound under the GATS), research and developm ent services, professional services and other 
business services. Some market access improvements are also specified in Korea's schedule for 
research and development services, market research and public opinion polling services, services incidental to mining, packaging services, as well as convention services other than convention 
agency services. The exception for cultural industries also applies to some subsectors in the 
category "other business services". 
4.4.2.2.2  Communication services 
4.49.  Commitments are made for postal and courier services, unbound under the GATS, though 
with some limitations. Coverage on telecommunications is also improved but a reservation is made for future measures with respect to subscription -based video services. In audiovisual services, 
sectoral coverage is wider than in its GATS Schedule (partially bound under GATS). In 
broadcasting, however, Korea lists reservatio ns for future measures in connection with 
broadcasting and audio-visual services and any measure with respect to motion picture promotion, advertising, or post-production services. The exception for cultural industries also applies to the 
audiovisual services. 
4.4.2.2.3  Construction and related engineering services 4.50.  Korea registers an establishment requirement under the Agreement for cross-border 
provision of construction services, but removes its GATS limitations on licensing and contract 
limits.  WT/REG362/1 
 
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  4.4.2.2.4  Distribution services 
4.51.  Though coverage under the Agreement is improved, additional licensing requirements and 
some prohibitions are also listed for wholesale and retail distribution of pharmaceutical and medical devices. As for Canada, an exclusion on the distribution, wholesale trade and retailing 
services for books, magazines, periodicals or ne wspapers, as well as for audio, music and video 
recordings that may be consequential to the broad carve out of cultural services may limits parts or all of these services activities.  
4.4.2.2.5  Educational services 
4.52.  While under the GATS the sector is unbound, under the Agreement, Korea partially opens 
higher education in certain areas (subject to a nationality requirement for the board of directors); certain branches of adult education (subject to prescriptions on the number of participants and 
length of courses); and vocational competency development training services (subject to local 
presence requirement). There is however a genera l reservation for future measures that may be 
taken with respect to pre-primary, primary, seco ndary education, and other education, as well as 
some aspects of higher and adult educational services.  
4.4.2.2.6  Environmental services 4.53.  Under the GATS, Korea has commitments, with some limitations, except for sanitation and 
similar services (reserved under the Agreement) . Under the Agreement, Korea has removed the 
restriction on the number of suppliers in sewage services as well as the economic needs test on 
disposal services (listed in its GATS Schedule). However, future measures for treatment and supply of potable water; collection and treatment of municipal sewage; collection, transportation, 
and disposal of municipal refuse; sanitation and similar services; and nature and landscape 
protection services (except for environmental impact assessment services) are also reserved. 
4.4.2.2.7  Financial services 
4.54.  Building upon its GATS commitments, the coverage of Korea's commitments under the 
Agreement is enlarged to also include the acquisition by Canadian investors of Korean financial services institutions, however, with certain limitations. The conditions for the operation of foreign insurance companies are also improved compared to Korea's GATS commitments. Further 
guaranties are also given in relation to privatization. In Appendix III-A Korea lists a number of 
measures that are deemed not to be inconsistent with its obligation under market access provisions for financial institutions, essentially mirroring elements in Korea's GATS schedule of 
specific commitments.  
4.4.2.2.8  Health relate d and social services 
4.55.  The sector is unbound under the GATS. Under the Agreement, Korea maintains a broad 
reservation to adopt or maintain any measure with respect to social services established or 
maintained for public purposes, such as: income security or insurance; social security or insurance; social welfare; public training; health; and child care. Korea also reserves the right to adopt or maintain any measure regarding human health services. 
4.4.2.2.9  Tourism and travel related services 
4.56.  The sector is largely covered under the GATS. Under the Agreement, Korea further improves 
its commitments, in particular in relation to market access for modes 2 and 3. Commitments on 
tourist guides services are also improved. It nevertheless reserves the right to adopt future 
measures with respect to tourism in rural, fishery, and agricultural sites. 
4.4.2.2.10  Recreational, cult ural and sporting services 
4.57.  The sector, unbound under the GATS, is covered by the Agreement, with some limitations to 
cover both existing and possible future restrictive measures. The exception for cultural industries also applies to the services included in the sector that comply with the definition of cultural industries.  WT/REG362/1 
 
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  4.4.2.2.11  Transport services 
4.58.  While only partial commitments are made in the GATS, the coverage is improved under the 
Agreement, which constitutes a change in particular for internal waterways transport, space transport, rail transport services, and pipeline transport. While commitments for international 
maritime services might appear to be more limited, in particular for passenger transportation 
services, coverage is improved, though some limitations are maintained or introduced, as in the case of the establishment requirement. In rela tion to commitments in pipeline services, Korea 
reserves the right to adopt or maintain any meas ure on the import and wholesale distribution of 
natural gas and the operation of terminals and the national high pressure pipeline network. 
4.5  Regulatory provisions  4.5.1  Domestic regulation 
4.59.  Article 9.7 replicates the disciplines relating to qualification requirements, and procedures, 
technical standards and licensing requirements contai ned in Articles VI.3 and VI.4 of the GATS. It 
also binds the Parties to amend Article 9.7 to br ing the results of the negotiations related to 
Article VI.4 of the GATS into effect under the Agreement, as appropriate.  
4.5.2  Recognition and temporary licensing 4.60.  Under Article 9.8, the Agreement mirrors the provisions in paragraphs 1 through 3 of 
Article VII of the GATS. It also includes some transparency requirements. 
4.61.  For some professional services, the Parties agree to ensure that their relevant bodies meet 
within 12 months of the date of entry into force of the Agreement to develop a mutual recognition agreement (MRA) or arrangement for engineering,  architectural, and veterinary services. In 
relation to temporary licensing, if the Parties agree, each one shall encourage the relevant bodies 
in their territories to develop procedures for the temporary licensing of professional service 
suppliers of the other Party (Article 9.9). The gu idelines for MRAs for the professional services 
sector, contained in Annex 9-C, shall be used to guide MRAs' negotiations. 
4.5.3  Subsidies 4.62.  In relation to Chapters 8 (investment) , Article 8.3 (national treatment), 8.4 (minimum 
standards of treatment), and 8.7 (senior management and boards of directors), as well as 
Chapter 9 (cross-border trade in services) do not apply to subsidies or grants provided by a Party, 
including government-supported loans, guarantees and insurance.  
4.5.4  Safeguards 
4.63.  The Agreement contains no provisions on safeguards in services.  
4.5.5  Other 4.5.5.1  Investment 
4.64.  Investment is specifically addressed in Chapter 8, which applies to measures by a Party 
relating to investors of the other Party; covered investment; and, with respect to provisions on performance requirement, investment and environmen t, and corporate social responsibility, to all 
investments.  
4.65.  In the event of any inconsistency between Chapter 8 (investment) and another 
Chapter (including Chapter 9 on cross-border trade in services), the other Chapter shall prevail to the extent of the inconsistency. Chapter 8 does not apply to measures by a party to the extent 
that they are covered by Chapter 10 (Financial services). 
4.66.  In addition to the above-mentioned provisions on national treatment; MFN treatment; 
performance requirements; senior management and boards of directors; their related WT/REG362/1 
 
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  non-conforming measures; and denial of benefits; Chapter 8 contains disciplines on minimum 
standards of treatment, which foresees that covered investments shall be accorded fair and 
equitable treatment as well as full protection and security (Article 8.5). Moreover, non-discriminatory treatment shall, with some reservations, be granted for investment losses and 
related compensations (Article 8.6). Subject to certain conditions and limitations, expropriation
43 
or nationalization is not permitted (Article 8.11). Chapter 8 also contains provisions on investment and environment (Article 8.10); on transfers (Article 8.12); on subrogation (Article 8.13); on special formalities and information requirements (Article 8.15); and on corporate social 
responsibility (Article 8.16).  
4.67.  Section B of Chapter 8 establishes an inve stor-State dispute settlement (ISDS) mechanism 
which is summarized in Section 5.6 below.  
4.6  Sector specific provisions on trade in services 
4.6.1  Financial services 4.68.  Chapter 10 applies to measures adopted or maintained by the Parties relating to financial 
institutions of the other Party; investors of the other Party, and their investments, in financial 
institutions in the Party's territory; and cross-border trade in financial services. The provisions on investment and on cross-border trade in services (in Chapters 8 and 9) apply to the Parties' measures relating to financial services only to th e extent that they are incorporated into Chapter 
10. This is in particular the case for the provisions on investment and environment; expropriation 
and compensation; transfers; denial of bene fits; and special formalities and information 
requirements.
44 Moreover, the ISDS mechanism is incorporated into and made a part of Chapter 
10 solely for expropriation and compensation, transfers, and denial of benefits. Furthermore, the 
provisions on payments and transfers are also inco rporated to the extent that cross-border trade 
in financial services is subject to the obligations in Article 10.5. Chapter 10 does not prevent a 
Party, including its public entities, from exclusively conducting or providing in its territory an 
activity or service forming part of a public retirement plan or statutory system of social security; or an activity or service for the account, with the guarantee or using the financial resources of the Party, including its public entities.  
4.69.  Chapter 10 provides for MFN and national treatment, as well as market access for financial 
institutions. In relation to cross-border trade in particular, each Party shall permit, under terms and conditions that accord national treatment, cr oss-border financial service suppliers of the other 
Party to supply the services, as specified by each Party in Annex 10-A. Moreover, each Party 
makes specific commitments (Article 10.15 and Annex 10-B), in the areas of portfolio management services, and transfer of information, and confirm the coverage of certain 
government entities by Chapter 10.  
4.70.  As in the case of other services, a "negativ e-list" approach is taken with financial services-
related non-conforming measures listed in Annex III.
45  
4.71.  A specific provision (Article 10.6) covers new financial services, according to which a Party 
shall permit a financial institution of the other Party to supply a new financial service that the Party 
would permit its own financial institutions, in like circumstances, to supply without additional legislative action by the Party. A Party may, nevertheless, determine the institutional and juridical 
form through which the new financial services may be supplied. Authorization requirements may 
also be put in place. If a Party requires a financial institution to obtain authorization to supply a new financial service, the Party shall decide within a reasonable time whether to issue the 
authorization and the authorization may only be refused for prudential reasons. 
4.72.  Under Article 10.11, which contains specific disciplines on transparency, each Party commits 
to promoting regulatory transparency in financial services. Article 10.7 clarifies that Chapter 10 does not require a Party to furnish or allow access to: information related to the financial affairs 
and accounts of individual customers of financial institutions or cross-border financial service 
                                               
43 The Parties' shared understanding on expropriation is contained in Annex 8-B. 
44 These provisions are covered by Articles 8.10; 8.11; 8.12; 8.14; 8.15; and 9.10. 
45 Section A of Annex III lists the existing non-conf orming measures, while Section B covers sectors for 
which future measures may be taken. WT/REG362/1 
 
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  suppliers; or confidential information which, if disclosed, would impede law enforcement or 
otherwise be contrary to the public interest or prejudice legitimate commercial interests of 
particular enterprises.  
4.73.   Measures for prudential reasons may be adopted or maintained, including for the protection 
of investors, depositors, policy holders, or persons to whom a fiduciary duty is owed by a financial 
institution or cross-border financial service supplier, or to ensure the integrity and stability of the financial system (Article 10.10). Chapter 10 also contains disciplines on self-regulatory organizations; payment and clearing systems; and recognition of a non-Party's prudential 
measures (Articles 10.12 through 10.14).  
4.74.  A Financial Services Committee
46 is established (Article 10.16), inter alia , to supervise the 
implementation of Chapter 10 and its further elaboration, to consider issues regarding financial 
services that are referred to it by a Party, and to participate in dispute settlement procedures, 
pursuant to Article 10.19. Consultations are also foreseen between the Parties on any matter arising under the Agreement that affects financial services 10 (Article 10.17). 
4.6.2  Telecommunication Services 
4.75.  Chapter 11 applies to measures by the Parties affecting trade in telecommunication 
services. It shall however not apply to any measure relating to broadcast or cable distribution of radio or television programming. In the event of any inconsistency between Chapter 11 and 
another chapter, Chapter 11 shall prevail to the extent of the inconsistency. 
4.76.  Chapter 11 contains provisions on access to, and use of, public telecommunications 
transport networks or services; licensing procedures; conduct of major suppliers; universal 
service; allocation and use of scarce resources; regulatory body; and conditions for the provision 
of value-added services. Articles 11.8 throug h 11.11 establish some disciplines between the 
Parties on enforcement; resolution of domestic telecommunication disputes; transparency; and 
forbearance. The relation of Chapter 11 to telecommunications-related international organizations 
and agreements is governed by Article 11.14. The disciplines of Chapter 11 replicate, and sometimes build on, some of the WTO rules in the Annex on telecommunications as well as in the 1996 Reference Paper. 
5  GENERAL PROVISIONS OF THE AGREEMENT 
5.1  Transparency 5.1.  Chapter 19 contains general transparency disciplines. Articles 19.1 through 19.4 list 
requirements for publication; notification and provision of information
47; administrative 
proceedings; and review and appeal. The Parties agree to cooperate in bilateral, regional, and 
multilateral fora on ways to promote transparency in respect of international trade and 
investment. They also affirm that it is not their policy to discourage private persons in their 
territory from purchasing or using goods or services of the other Party.  
5.2.  Further to Chapter 19, the Agreement also es tablishes specific transparency requirements in 
a number of other Chapters. 
5.2  Transfers 
5.3.  Article 9.11 disciplines payments and tran sfers relating to the cross-border supply of 
services, which shall be made freely and without de lay into and out of a Party's territory. A Party 
may however prevent or delay a payment or transfer through the equitable, non-discriminatory, 
and good faith application some of its laws.48 Moreover, Chapter 8 (investment), 9 (cross-border 
trade in services), and 10 (financial services) are not to be construed to prevent Korea from 
                                               
46 The Parties' authorities responsible for financial services are identified in Annex 10-C to the 
Agreement. 
47 Article 22.5 governs the disclosure of certain types of information. 
48 For instance: laws on bankruptcy, insolvency, or the protection of the rights of creditors; criminal or 
penal offences. WT/REG362/1 
 
- 40 - 
 
  applying measures pursuant to Article 6 of the Foreign Exchange Transaction Act . Certain 
conditions and limitations are applicable to this provision (Article 22.4). 
5.3  Exceptions 5.4.  General and security exceptions are contai ned in Articles 22.1 and 22.2. Article 22.3 states 
the non-application of the Agreement to taxation  measures, while Articles 22.6 and 22.7 refers, 
respectively, to cultural industries and to the tr eatment of WTO Waivers. In addition, Article 10.10 
contains exceptions applicable to financial services, in particular measures maintained or introduced for prudential reasons. Article 22.5 addresses disclosure of information. 
5.3.1  General exceptions 
5.5.  With respect to trade in goods
49, Article XX of GATT 1994, including its interpretive notes, is 
incorporated into and made part of the Agreement, mutatis mutandis  (Article 22.1, paragraph 1). 
With respect to trade in services50, Article XIV (a), (b) and (c) of GATS, including its footnotes, is 
incorporated into and made part of the Agreement, mutatis mutandis  (Article 22.1, paragraph 2). 
Moreover, the principles and substantive provisions in Article XIV of GATS are replicated in 
paragraph 3 of Article 22.1 and made applicable to the provisions of the Agreement covering 
investment (Chapter 8).  
5.3.2  Security exceptions 5.6.  Article 22.2 replicates the provisions in Article XXI of GATT 1994 and in Article XIV bis of 
GATS for measures related to security.  
5.3.3  Taxation 5.7.  As a principle, nothing in the Agreement shall apply to taxation measures. However, 
Article 22.3 lists provisions
51 for which that principle is not applicable and/or its applicability is 
limited.  
5.8.  Nothing in the Agreement shall affect the ri ghts and obligations of either Party under any tax 
convention. In the event of any inconsistency relating to a taxation measure, the tax convention 
shall prevail to the extent of the inconsistency. 
5.3.4  Qualified non-applicability to cultural industries 5.9.  As mentioned above, Article 22.6 provides the non-application of the Agreement to measures 
adopted or maintained by either Party with respect to cultural industries except as specifically 
provided in Articles 1.6 (cultural cooperation) and 2.3 (tariff elimination). 
5.4  Accession and Withdrawal 
5.10.  The Agreement does not contain any accession provisions. Termination is, however, 
governed by Article 23.5.  
5.5  Institutional framework 
5.11.  A Joint Commission is established, inter alia , to supervise the implementation of the 
Agreement (Article 20.1). Committees, subcommittees, working groups, or other bodies may be 
                                               
49 Chapters 2 (national treatment and market access for goods); 3 (rules of origin); 4 (origin procedures 
and trade facilitation); 5 (SPS measures); 6 (standar ds-related measures); 7 (trade remedies); and 13 
(electronic commerce). 
50 Chapters 9 (cross-border trade in services); 11 (telecommunications); 12 (temporary entry for 
business persons); and 13 (electronic commerce). 
51 For trade in goods: Articles 2.2 (national treatmen t); 2.8 (export duties, taxes or other charges); and 
2.9 (MFN treatment for internal taxes and emissions regulations). For trade in services and investment: 
Articles 8.3; 9.2 and 10.2 (national treatment); 10.5 (c ross-border trade); 8.4, 9.3 and 10.3 (MFN treatment); 
8.8 (performance requirement); and 8.11 (expropriation and compensation, also taking into account the elements contained in Annex 22-A and 8-B). WT/REG362/1 
 
- 41 - 
 
  established by the Joint Commission. Annex 20-A to the Agreement lists the committees, 
subcommittees, working groups and other bodies which are established under the Agreement or 
may be established upon request from a Party. All decisions shall be made by mutual consent of the Parties. 
5.12.  Each Party shall designate an Agreement Coordinator to, inter alia, coordinate the work of 
all subsidiary bodies; recommend the establishment of other bodies; follow up on any decisions taken by the Commission, as appropriate; receive notifications and information provided under the Agreement; and consider other matters that may affect the operation of the Agreement. 
5.13.  The institutional framework established by the Agreement is summarized by Chart 5.1 
below.  
Chart 5.1 Institutional Framework  
 
 
 
 Source: WTO Secretariat based on the Agreement. 
 Joint Commission  
(Art. 20.1) 
Committee on Trade in Goods 
(Art. 2.14) Environmental Affairs Council 
(Art. 17.11)  
Rules of Origin and Customs Committee  
(Art. 4.14)  
Committee on Sanitary and Phytosanitary 
Measures (Art. 5.5)  
Committee on Standards-Related Measures 
(Art. 6.8 and Annex 6-C)  
Committee on Trade Remedies 
(Art. 7.8)  
Financial Services Committee 
(Art. 10.16)  
Committee on Government Procurement 
(Art. 14.6)  
Committee on Intellectual Property 
(Art. 16.18) Sub-Committee on Trade in Forest Products 
(Annex 2-B)  
Sub-Committee on Trade in Automotive 
Goods (Annex 2-C)  
Working Group on Standards-Related 
Measures related to Building Products and 
Related to Assemblies (Art. 6.5.2(g))  Labour Ministerial Council 
(Art. 18.8)  
Committee on Outward Processing Zones  
on the Korean Peninsula  
(Annex 20) WT/REG362/1 
 
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  5.6  Dispute settlement 
5.14.  Chapter 21 governs dispute settlement52 for matters covered under the Agreement, with the 
exception of Chapter 5 (SPS); some provisions  of Chapter 7 (proposed safeguard measures, 
antidumping and countervailing measures); 15 (competition policy, monopolies and State 
enterprises53); 17 (environment), 18 (labour); some aspects covered by Chapter 8 (investment); 
and, in most cases, 12 (temporary entry for busi ness persons); and in respect of export of logs 
(Chapter 2). Specific provisions on the establishment of panels and on non-implementation in relation to disputes arising under Chapter 10 (financial services) are contained in Article 10.18.  
5.15.  The Agreement provides for the choice of the dispute settlement forum. However, when a 
dispute has been initiated, either under the WTO or under the Agreement, the same measure may not be invoked under the other forum (Article 21.3).  
5.16.  The Parties endeavour to agree on the in terpretation and application of the Agreement 
through cooperation and consultations to arrive at a mutually satisfactory resolution of a matter that may affect the operation of the Agreement
54. This is a role of the Joint Commission 
established under Article 20.1 and the aim of consultations under Article 21.4. Alternative methods 
of dispute resolution, such as good offices, concili ation, or mediation are governed by Article 21.5.  
5.17.  If the Parties fail to resolve a matter, it may be referred to a dispute settlement panel. 
Under Articles 21.4 through 21.11, the Agreement es tablishes the disciplines and procedural steps, 
mainly modelled on the WTO dispute settlement modalities, that are applicable to the 
establishment of panels55; the functions of panels; the rules of procedures56; the panel report; the 
suspension and termination of proceedings; the implementation of the final report; 
non-implementation; and compliance review. Char t 5.2 below summarizes the main steps of the 
dispute settlement mechanism established by the Agreement. 
                                               
52 Annex 21-A clarifies the applicability of the concept of nullification and impairment in relation to 
certain Chapters of the Agreement. 
53 Only Article 15.1 is excluded from dispute settlement. 
54 If an issue of interpretation or application of the Agreement arises in a domestic judicial or 
administrative proceeding of a Party that either Party co nsiders would merit its intervention, or if a court or 
administrative body solicits the views of a Party, that  Party shall notify the othe r Party (Article 21.13). In 
relation to private rights, a Party shall not provide for a right of action under its do mestic law against the other 
Party on the ground that a measure of  that other Party is in consistent with the Agre ement (Article 21.14). 
55 Including the code of conduct applicable  to panellists contained in Annex 21-B. 
56 Following the model rules of procedures set out in Annex 21-C to the Agreement. WT/REG362/1 
 
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  Chart 5.2 Specific Dispute Settlement Me chanism established by the Agreement 
 
 
5.18.  For the settlement of international commercial disputes between private parties in the free 
trade area, each Party shall, to the extent possibl e, encourage and facilitate the use of arbitration 
and other means of alternative dispute resolution (Article 21.15). Each Party shall provide appropriate procedures to ensure observance of agreements to arbitrate and for the recognition 
and enforcement of arbitral awards in such disputes. 
5.19.  In the event of an investment dispute, an investor-State dispute settlement (ISDS) 
mechanism is established in Section B of Chapter 8 (investment). Articles 8.17 through 8.44 
govern the proceedings of the ISDS and cover th e submission of a claim to arbitration by an 
investor of a Party on its own behalf or on behalf of an enterprise; the notice of intent to submit a 
claim to arbitration; consultations and negotiations; conditions precedent to submission of a claim 
to arbitration; submission of a claim to arbitration; consent to arbitration; selection of arbitrators; 
constitution of a Tribunal by Secretary-General of the ICSID
57; agreement to appointment of 
arbitrators; consolidation; notice to the non-disputing Party; documents; participation by the non-disputing Party; place of arbitration; language of proceedings; preliminary objections to 
jurisdiction or admissibility; transparency of arbitral proceedings; submissions by a non-disputing 
Party; governing law; interpretation of Annexes
58; expert reports; interim measures of protection; 
final award by the Tribunal; finality and enforcement of an award; procedural and other matters; 
and exclusions. Article 10.19 (ISDS in financial services) refers to procedures established under 
Chapter 8. 
 
                                               
57 International Centre for Settlement of Investment Disputes (ICSID), established by the Convention on 
the Settlement of Investment Disputes between States and Nationals of Other States, done at Washington on 
18 March 1965. 
58 Annexes I, II, or III to the Agreem ents containing the Parties' rese rvations for existing and future 
non-conforming measures as well as the non-confor ming measures in relation to financial services. Source: WTO Secretariat based on the Agreement. Consultations (Art. 21.4) 
Establishment and 
composition of a Panel  
(Art. 21.6-21.7) 
(Annex 21-B) 
Proceedings (Art. 21.8 
 and Annex 21-C) 
Panel Report  
(Art. 21.9) 
(Temporary) suspension of 
benefits by complaining Party 
(Art. 21.11) Compliance review 
(Art. 21.12 ) Implementation of the Final 
Report 
 (Art. 21.10) Good Offices, Conciliation; 
Mediation (Art. 21.5) 
Ruling by the Panel on the level of the suspension 
(Art. 21.11) Non-implementation  
(Art. 21.11) 
Compensation agreed 
between the Parties  
(Art. 21.10) WT/REG362/1 
 
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  5.7  Relationship with other agreements concluded by the Parties 
5.20.  Article 1.1 states that the Agreement is consistent with Article XXIV of GATT 1994 and 
Article V of GATS. The Parties also affirm their existing rights and obligations with respect to each other under the WTO Agreement and other agreements to which both Parties are party 
(Article 1.2). Nevertheless, in relation to some multilateral environmental agreements
59, Article 1.3 
states that a Party is not precluded from taking a particular measure necessary to comply with its obligations under these MEA agreements, provided  that the measure is not applied in a manner 
that would constitute, where the same conditions prevail, arbitrary or unjustifiable discrimination, 
or a disguised restriction on international trade. 
5.21.  Table 5.2 below shows the Parties' RTAs, notified and non-notified, other than the 
Agreement. 
Table 5.2 Canada and Korea, Republic of: Pa rticipation in other RTAs (notified and 
non-notified in force), as of 15 September 2015 
RTA Name Date of 
entry into 
force Coverage GATT/WTO Notification 
Year WTO Provision 
CANADA 
Canada - Honduras 01-Oct-14 Goods & Services 2015 GATT Art. XXIV & GATS Art. V 
Canada - Panama 01-Apr-13 Goods & Services 2013 GATT Art. XXIV & GATS Art. V 
Canada - Jordan 01-Oct-12 Goods 2013 GATT Art. XXIV 
Canada - Colombia 15-Aug-11 Goods & Services 2011 GATT Art. XXIV & GATS Art. V 
Canada - Peru 01-Aug-09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
EFTA - Canada 01-Jul-09 Goods 2009 GATT Art. XXIV 
Canada - Costa Rica 01-Nov-02 Goods 2003 GATT Art. XXIV 
Canada - Chile 05-Jul-97 Goods & Services 1997 GATT Art. XXIV & GATS Art. V 
Canada - Israel 01-Jan-97 Goods 1997 GATT Art. XXIV 
North American Free Trade 
Agreement (NAFTA) 01-Jan-94 Goods 
Services 1993 
1995 GATT Art. XXIV  
GATS Art. V 
REPUBLIC OF KOREA 
Republic of Korea - Australia 12-Dec-14 Goods & Services 2014 GATT Art. XXIV & GATS Art. V 
Republic of Korea - Turkey 01-May-13 Goods 2013 GATT Art. XXIV 
Republic of Korea - United States 15-Mar-12 Goods & Services 2012 GATT Art. XXIV & GATS Art. V 
Peru - Republic of Korea 01-Aug-11 Goods & Services 2011 GATT Art. XXIV & GATS Art. V 
European Union - Republic of 
Korea 01-Jul-11 Goods & Services 2011 GATT Art. XXIV & GATS Art. V 
ASEAN - Republic of Korea 01-Jan-10 
01-May-09 Goods & Services 2010 Enabling Clause, GATT Art. XXIV & 
GATS Art. V 
Republic of Korea - India 01-Jan-10 Goods & Services 2010 Enabling Clause, GATT Art. XXIV & 
GATS Art. V 
EFTA - Republic of Korea 01-Sep-06 Goods & Services 2006 GATT Art. XXIV & GATS Art. V 
Republic of Korea - Singapore 02-Mar-06 Goods & Services 2006 GATT Art. XXIV & GATS Art. V 
Republic of Korea - Chile 01-Apr-04 Goods & Services 2004 GATT Art. XXIV & GATS Art. V 
Asia Pacific Trade Agreement 
(APTA) - Accession of China 01-Jan-02 Goods 2004 Enabling Clause 
Global System of Trade 
Preferences among Developing 
Countries (GSTP) 19-Apr-89 Goods 1989 Enabling Clause 
Asia Pacific Trade Agreement 
(APTA) 17-Jun-76 Goods 1976 Enabling Clause 
Protocol on Trade Negotiations 
(PTN) 11-Feb-73 Goods 1971 Enabling Clause 
Source: WTO Secretariat. 
 
                                               
59 The Convention on International Trade in Endanger ed Species of Wild Fauna and Flora; the Montreal 
Protocol on Substances that Deplet e the Ozone Layer; the Basel Conventi on on the Control of Transboundary 
Movements of Hazardous Wastes and their Disposal; the Rotterdam Convention on th e Prior Informed Consent 
Procedure for Certain Hazardous Ch emicals and Pesticides in International Trad e; and the Stockholm 
Convention on Persistent Organic Pollutants. WT/REG362/1 
 
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  5.8  Government procurement 
5.22.  Chapter 14 of the Agreement contains rules applicable to government procurement and 
cover both goods and services (including constructi on services). Chapter 14 is not to be construed 
to derogate from any rights or obligations of the Parties under the WTO Government Procurement 
Agreement (GPA), to which both Parties are a party.  On the contrary it affirms the Parties' rights 
and obligations under the GPA. It incorporates by reference the rights and obligations as listed in the Annex to the WTO Protocol Amending the GPA (the "revised GPA"), with the exception of 
Articles V and XVIII through XXII. These rights and obligations apply mutatis mutandis  to the 
procurement covered by Annexes 14-A through to 14-G to the Agreement.
60 
5.23.  Annexes 14-A contains the applicable thresholds and list of entities. Annex 14-B outlines the 
goods covered by the chapter, while Annex 14-C lists the services that are covered by the Parties' 
commitments. Commitments on construction services are covered by Annex 14-D, with Annex 14-
E containing general notes applicable to both Pa rties. Annexes 14-F and 14-G cover, respectively, 
publication of notices and threshold adjustment.  
5.24.  As compared to the Parties' commitments under the 1994 GPA and the revised GPA, 
commitments under the Agreement are limited to central Government entities (while under the revised GPA, sub-central and other entities are also covered). The thresholds for goods and services are, under the Agreement, defined in Can$ and Korean Won
61, while they are expressed 
in SDR under the revised GPA. In the Agreement, Canada and Korea agreed to increase reciprocal 
market access to procurement opportunities tendered by their central government entities by reducing the applicable goods and services thresholds. The entities listed in, as well as the goods 
and services covered under the Agreement are broa dly comparable to those listed by the Parties 
under the revised GPA with a few adjustments and updates. 
5.25.  A Party shall notify the other Party of a prop osed rectification, withdrawal of an entity, or 
any other modification of Annex 14-A. Article 14.4 foresees that consultations be held in case 
proposed modifications are objected by a Party. Compensatory adjustments are also foreseen. Moreover, if after the entry into force of the Ag reement, a Party accords to a third-party greater 
access to its Government procurement market than the access that is accorded to the other Party, 
that Party may, at the request of the other Party, enter into negotiations regarding the extension 
of the same access to the other Party on a reciprocal basis (Article 14.5). 
5.26.  The Agreement establishes a Committee on Government Procurement, which shall meet, 
inter alia , to facilitate cooperation to increased mutual understanding of each Party's government 
procurement system; exchange relevant informat ion; explore market access expansion; or any 
other matter of a bilateral nature related to the operation of Chapter 14. 
5.9  Intellectual property rights 
5.27.  Chapter 16 covers intellectual property  rights. The Parties reaffirm their rights and 
obligations under the TRIPS Agreement and other in tellectual property agreements to which they 
are a party. Each Party shall be free to determine the appropriate method of implementing the 
Agreement within its own legal system and practi ce. The Agreement does not create any obligation 
with respect to the distribution of resources between enforcement of intellectual property rights (IPRs) and enforcement of law in general.  
5.28.  Chapter 16 does not affect the freedom of the Parties to determine whether and under what 
conditions the exhaustion of IPRs applies. 
5.29.  The Agreement confirms the Parties' co mmitments to obey by the national treatment 
principle and builds on TRIPS provisions for the prot ection of trademarks (Article 16.9); copyrights 
                                               
60 Should further revisions be made to the revised GP A that affect the rights and obligations that are 
incorporated into the Agreement, the revisions shall be in corporated in the Agreement. At the time this factual 
presentation is written both Parties are a party to the GPA and, while Canada is also a Party to the revised 
GPA, Korea's accession to it is still pending. 
61 Respectively: Can$ 100,000 and 100,000,000 Korean Wo n with respect to goods and services under 
the Agreement, while the GPA thresholds are 130,000 SDR.  Annex 14-G governs the procedures applicable for 
threshold adjustments, should they be necessary. WT/REG362/1 
 
- 46 - 
 
  and related rights (Article 16.11); protection of geographical indications; and patents 
(Article 16.12).  
5.30.  In relation to public health, the chapter commits the Parties to recognize the importance of 
the 2001 WTO Declaration on the TRIPS Agreement and Public Health  (Doha Declaration) and 
contribute to the implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement 
and Public Health , as well as the Protocol amending the TRIPS Agreement  (2005). 
5.31.  Article 16.13 addresses enforcement of intellectual property rights. It contains general 
obligations and provisions related to: presumption of authorship or ownership; civil an 
administrative procedures and remedies; injunctions; damages; other remedies; information 
related to infringement; and provisional measures. Special requirement related to border measures are established under Article 16.14, while criminal procedures and remedies and special 
measurers against copyright infringers on the In ternet are governed by specific provisions 
contained in Articles 16.15 and 16.16 respectively. 
5.32.  A Committee on Intellectual Property is established in Article 16.18 to discuss topics 
relevant to the protection and enforcement of IPRs, to provide a forum for consultations (as 
foreseen under Article 16.19), and to oversee the implementation of the Parties' cooperation (as 
foreseen under 16.17). 
5.10  Other 
5.10.1  Electronic commerce 
5.33.  The Parties confirm, in Chapter 13 on electronic commerce, the applicability of the 
obligations contained in the relevant provisions of Chapters 2 (national treatment and market 
access for goods); 9 (cross-border trade in  services), 10 (financial services), 
11 (telecommunications), and 14 (government pr ocurement) to electronic commerce. In 
particular, they recognise the importance of  Article 11.2 (access to and use of public 
telecommunications transport networks and services ) in enabling trade conducted by electronic 
means (Article 13.1). In the event of an incons istency between Chapter 13 and another Chapter of 
the Agreement, the other Chapter prevails to the extent of the inconsistency (Article 13.8). 
5.34.  The Parties confirm that Chapter 13 does not impose obligations on a Party to allow digital 
products
62 to be delivered electronically, except in accordance with the commitments of that Party 
in other Chapters. Moreover, each Party shall endeavour to adopt measures to facilitate trade conducted by electronic means by addressing issu es relevant to the electronic environment. The 
importance of avoiding unnecessary barriers to trade conducted by electronic means is also 
recognized.  
5.35.  A Party shall not apply customs duties, fees, or charges on or in connection with digital 
products delivered electronically (Article 13.3). 
5.36.  Chapter 13 also contains provisions on th e protection of personal information, paperless 
trade administration, and consumer protection (Articles 13.4 through 13.6). Areas of cooperation between the Parties are identified under Article 13.7. 
5.10.2  Competition policy, mono polies and state enterprises  
5.37.  Chapter 15 contains disciplines on competition policy, monopolies and state enterprises. 5.38.  On competition policy, under Article 15.1, the Parties agree to adopt or maintain measures 
to proscribe anti-competitive business conduct and take appropriate action with respect thereto. 
They shall consult from time to time on the effectiveness of measures undertaken by each Party. Such measures, and the enforcement actions taken pursuant to them, shall be consistent with the 
principles of transparency, non-discrimination, and procedural fairness. Exclusions from these 
measures shall be transparent and periodically assessed to determine whether they are necessary 
                                               
62 "digital product" means computer programs, text, video, images, sound recordings, or other products 
that are digitally encoded and produced for commercial sale or distribution. WT/REG362/1 
 
- 47 - 
 
  to achieve each Party's overriding policy object ives. The Parties shall cooperate on issues of 
competition law enforcement policy, including mutual legal assistance, notification, consultation, 
and exchange of information relating to the enforcement of competition laws and policies in the free trade area. No recourse may be had to any form of dispute settlement under the Agreement 
for any matter arising under Article 15.1. 
5.39.  On monopolies, under Article 15.2, the Parties agree that the Agreement is not to be 
construed to prevent a Party from maintaining or designating a monopoly. Prior notification of such designation, shall, wherever possible, be made to  the other Party. A designated privately-owned or 
government monopoly shall acts in a manner that is not inconsistent with the Party's obligations 
under the Agreement when exercising delegated go vernmental authority; and, except to comply 
with the terms of its designation, act solely in accordance with commercial considerations in its 
purchase or sale of the monopoly good or service. Non-discriminatory treatment to covered 
investments, to goods of the other Party, and to  service providers of the other Party shall be 
provided when such a monopoly purchases or sells its good or service in the relevant market. Such 
a monopoly shall not use its monopoly position to engage, directly or indirectly, including through 
its dealings with its parent, subsidiaries, or other enterprises with common ownership, in anticompetitive practices in a non-monopolised market in its territory, if such practices adversely affect a covered investment. These disciplines shall not apply to government procurement. 
5.40.  On state enterprises
63, under Article 15.3, the Parties agree that the Agreement is not to be 
construed to prevent a Party from maintaining or establishing a state enterprise. Each Party shall ensure that a state enterprise that it maintains or establishes acts in a manner that is not 
inconsistent with the Party's obligations under the Agreement when exercising delegated 
governmental authority. Non-discriminatory treatment shall be accorded in the sale of its goods or services to covered investments.  
5.41.  The provisions on monopoly and state enterprise are not to be construed to prevent them 
from charging different prices in different markets, or within the same market, if such differences are based on normal commercial considerations, such as taking account of supply and demand conditions (Article 15.4).  
5.10.3  Environment 
5.42.  Chapter 17 contains disciplines on the environment. The right of each Party to establish its 
own levels of environmental protection and enviro nmental development priorities, and to adopt or 
modify accordingly its environmental laws and policies is recognized. The Parties affirm their 
commitments to the effective implementation in their respective laws and practices of the multilateral environmental agreements to which both are party. They also commit to consulting 
and cooperating as appropriate on trade-related environmental issues of mutual interest 
(Article 17.3). They shall strive to facilitate and promote trade and investment in environmental goods and services, including through addressing related non-tariff barriers (Article 17.4). 
5.43.  With regard to upholding levels of protection in the application and enforcement of laws, a 
Party shall not fail to effectively enforce its environmental law, through a sustained or recurring 
course of action or inaction, in a manner affecting trade or investment between the Parties. It is nevertheless recognized that a Party has not failed to effectively enforce its environmental law in a 
particular case if the action or inaction in question reflects a reasonable exercise of its agencies' or 
of its officials' discretion in respect of investigatory, prosecutorial, regulatory, or compliance matters, or results from bona fide decisions to allocate resources to enforcement in respect of 
other environmental matters determined to have hi gher priorities (Article 17.5). Moreover, each 
Party shall not waive or otherwise derogate from, or offer to waive or otherwise derogate from environmental law in a manner that weakens or reduces the protections afforded in that law to encourage trade or investment between the Parties. Furthermore, scientific and technical 
                                               
63 "State enterprise" means an enterprise owned or co ntrolled through ownership interests, by a Party. 
However, in relation to the application of no-discriminat ory treatment in the sale of a state enterprise's goods 
or services to covered investments,  "state enterprise" means, for Cana da: a Crown corporation within the 
meaning of the Financial Administration Act, a Crow n corporation within the meaning of any comparable 
provincial law, or an equivalent entity that is incorpor ated under the applicable provincial law; and for Korea: a 
public corporation and a quasi-govern mental entity within the meaning of the Act on the Management of 
Non-Departmental Public En tities (See Annex 15-A). WT/REG362/1 
 
- 48 - 
 
  information, and relevant international standards, guidelines, or recommendations, shall be taken 
into account when preparing and implementing measures aimed at protecting the environment 
that affect trade between the Parties (Article 17.6). 
5.44.  Each Party shall, in accordance with domestic laws, ensure that due consideration be given 
to alleged violations of environmental law brought to the competent authorities by interested 
persons residing or established in a Party's territory. Access to remedies and procedural guarantees shall be granted in that context in conformity with Article 17.7. 
5.45.  The Agreement also contains provisions  on transparency, public information, and 
cooperation on trade-related aspects of environmental issues (Articles 17.8 through 17.10). 
5.46.  For the purpose of implementing Chapter 17, each Party shall designate an official to serve 
as a contact point. The Agreement also establishes an Environmental Affairs Council to discuss 
matters of common interest, to oversee the implementation of Chapter 17, and to review, as 
appropriate, its progress (Article 17.11). The Parties also commit to endeavour to agree on the interpretation and application of Chapter 17 through dialogue, consultations, and cooperation 
(Article 17.12). In case consultations are requested to address a matter under Chapter 17, and if 
the matter is not satisfactorily addressed through consultations, a Party may request that a Panel of Experts be convened to examine the matter.
64 The Parties shall eventually endeavour to agree 
on the implementation of possible Panel recommendations in a mutually satisfactory manner. The 
implementation of the recommendations of the Panel of Exerts shall be monitored by the Council 
(Article 17.13). For any matter arising under Chapter 17, a Party shall not have recourse to Chapter 21 of the Agreement that establishes a dispute settlement mechanism.  
5.47.  The application of Chapter 17 to the provinces of Canada is subject to Annex 17-B to the 
Agreement, which states that, following the entr y into force of the Agreement, Canada shall 
provide to Korea a written declaration indicating the provinces for which Canada is to be bound in 
respect of matters within their jurisdiction.
65  
5.10.4  Labour 5.48.  In Chapter 18, the Parties affirm their ob ligations as members of the International Labour 
Organization (ILO). They shall ensure that their labour law embodies and provides protection for 
the principles concerning internationally recognized labour rights, enumerated under Article 18.2. 
A Party shall not waive or otherwise derogate from its labour law implementing these principles in a matter related to trade or investment, if the waiver or derogation is inconsistent with the rights 
in Article 18.2. 
5.49.  Chapter 18 also contains disciplines on government enforcement action, private action, 
procedural guarantees, and public information (Articles 18.4 through 18.7). 
5.50.  The Agreement establishes a Labour Ministerial Council to discuss matters of common 
interest to the Parties and to oversee the im plementation of, and review progress under, 
Chapter 18. The Council shall review the operation and effectiveness of Chapter 18 in the light of experience within five years after the entry into force of the Agreement (Article 18.8). 
5.51.  National contact points shall be design ated (Article 18.9) and public communications 
procedures are foreseen for each Party regarding the right of a person to submit a public communication to the national contact point (Article 18.10 and Annex 18-B). 
5.52.  The Parties may also initiate cooperative labour activities for the promotion of the objectives 
of Chapter 18, enhancement of workers' welfare and the promotion of better understanding by each Party of the other Party's labour system. In that regard the national contact points may also 
be used for cooperative labour activities as described under Annex 18-A to the Agreement. 
                                               
64 The procedures set out in Annex 17-A to the Agreement apply to the selection of panellists. 
65 Canada indicates that no such written declarat ion has been made to Korea before the factual 
presentation was finalized. WT/REG362/1 
 
- 49 - 
 
  5.53.  Consultations are also foreseen between the Parties, which shall at all times endeavour to 
agree on the interpretation and application of Chapter 18. To discuss matters related to their 
obligations under the Chapter, general consultations may be requested (Article 18.12). The Parties shall make every attempt, including through cooperation, consultations, and the exchange of 
information, to address a matter that might affect the Agreement's operation.  
5.54.  If the Parties are, nevertheless, unable to resolve the matter, the requesting Party may use 
procedures under Section C of Chapter 18. The procedures for review of obligations under 
Chapter 18 include "labour consultations at the ministerial level" (Article 18.13); the possibility to 
request the establishment of a Review Panel
66 (Article 18.14); information for the Review Panel 
(Article 18.16); and the issuance of initial and final reports (Articles 18.17 and 18.18). If in the 
final report, the Review Panel determines that the Party that was subject to the request has failed 
to comply with its obligations under Section A of Chapter 18, the Parties may develop a mutually 
satisfactory action plan to implement the Review Panel's recommendations. If the Parties are unable to decide on an action plan or if the pl an is not implemented according to its terms, the 
requesting Party may request in writing that th e Review Panel be convened with a view to 
determining whether a monetary assessment needs to be set and paid in accordance with Annex 18-E to the Agreement. Except as otherwise provide in Chapter 18 a Party shall not have recourse to Chapter 21 establishing a dispute settlement mechanism under the Agreement for any 
matter arising under Chapter 18. 
5.55.  At the time of the entry into force of the Agreement, Canada shall provide to Korea a 
written declaration indicating the provinces for which Canada is to be bound in respect of matters 
within their jurisdiction.
67  
5.56.  Chapter 18 is not to be construed to empo wer a Party's authorities to undertake labour law 
enforcement activities in the territory of the other Party. Moreover, a Party shall not provide for a 
right of action under its domestic law against the other Party on the ground that the other Party 
has acted in a manner inconsistent with Chapter 18. Furthermore, the decisions by each Party's tribunals, or pending decision, as well as related proceedings, shall not be subject to revision or be reopened under Chapter 18. Protection of in formation is guaranteed under Article 18.22. 
5.57.  The Parties may, as appropriate and by agreement, seek the assistance of the ILO or any 
other competent international and regional orga nization that has the necessary expertise and 
resources to enhance cooperation under Chapter 18. 
5.10.5  Cultural cooperation and audiovisual coproduction 
5.58.  Under Article 1.6, the Parties endeavour to  promote cultural exchanges and carry out joint 
initiatives in various cultural spheres, such as au diovisual coproductions. The Parties also agree to 
consider the negotiation of an audiovisual coproduction agreement, which shall form an integral 
part of the Agreement.  
5.59.  Provisions on dispute settlement and on investment do not apply to Article 1.6 and shall not 
apply to an eventual agreement on audiovisual coproduction. 
                                               
66 The review by the Panel shall be conducted in accordance with the procedures set out in Annex 18-D 
to the Agreement. The composition of the Panel is gove rned by Article 18.15 and the procedures set out in 
Annex 18-D to the Agreement. 
67 Canada indicates that no Canadian province had yet agreed to be bound by the obligations flowing 
from Chapter 18 before the factual presentation was finalized , and confirmed that it will notify Korea in writing 
should any province accept such obligations. WT/REG362/1 
 
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ANNEX 1 
INDICATORS OF TRADE LIBERALIZATION UNDER THE AGREEMENT 
Canada 
1. Table A1.1 shows tariff liberalization by Canada in relation to imports from Korea (by total, 
agricultural and non-agricultural products). In 2015, Canada's average applied MFN rate was 5.6% 
overall (2.4% for non-agricultural products an d 21.2% for agricultural products). 69.9% of 
Canada's tariff was duty free on an MFN basis; 75% of non-agricultural products and 47% of 
agricultural products were duty free. At the ti me of entry into force of the Agreement (2015), 
Korea's exporters enjoyed an absolute margin of preference of 1.1% vis-à-vis  the prevailing MFN 
tariff; 1.1% for non-agricultural goods and 1.6% for agricultural products. The share of duty free lines applicable to imports from Korea immediatel y at the entry into force of the Agreement was 
78.2% (56.3% for agricultural products and 83.1% for non-agricultural products). This share of 
duty-free tariff lines will further increase to reach 98.5% in 2025 (100% for non-agricultural products and 91.7% for agricultural products), by which time Canada will have fully implemented 
its tariff elimination programme, ten years after the entry into force of the Agreement.  
Table A1.1 Canada: Indicators of MFN tariff ra tes and preferential rates for imports from 
Korea 
Origin 
of 
goods Year ALL PRODUCTS Agricultural productsa Non-agricultural products 
Average applied 
tariff Share 
of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share 
of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share 
of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) 
MFN 2015 5.6 19.3 69.9 21.2 42.9 47.0 2.4 9.6 75.0 
Korea  2015 4.5 21.4 78.2 19.6 48.6 56.3 1.3 7.7 83.1 
2016 3.8 20.2 80.1 18.7 52.4 60.7 0.7 4.7 84.5 
2017 3.3 51.3 93.2 17.4 94.0 79.2 0.2 5.1 96.3 
2018 3.1 72.5 95.2 17.1 104.2 81.3 0.1 5.4 98.3 
2019 3.0 179.4 98.1 16.6 226.0 91.7 0.0 11.0 99.6 
2020 3.0 179.0 98.1 16.6 226.0 91.7 0.0 9.0 99.6 
2021 3.0 181.6 98.1 16.6 226.0 91.7 0.0 7.7 99.6 
2022 3.0 181.2 98.1 16.6 226.0 91.7 0.0 5.6 99.6 
2023 3.0 180.9 98.1 16.6 226.0 91.7 0.0 3.8 99.6 
2024 3.0 202.6 98.3 16.6 226.0 91.7 0.0 2.0 99.8 
2025 3.0 226.0 98.5 16.6 226.0 91.7 0.0 0.0 100.0 
a WTO Definition. 
 Note: Tariff lines subject to in-quota rates are excl uded in the computation; for the calculation of 
averages, specific rates are excluded and the ad valorem  parts of alternate rates are included. 
 Based on the HS 2012 nomenclature. 
Source:  WTO estimates based on data  provided by Canada and WTO-IDB. 
 
2. Table A1.2 gives an indication of additional market access in Canada resulting from the 
entry into force of the Agreement for Korea's top 25 global exports, which accounted for 49.5% of 
its global exports in 2012-2014; these corresponded to 58 lines in Canada's tariff at the six-digit 
level (using the HS 2012). In 2015, prior to the en try into force of the Agreement, 40 of these 
tariff lines already had (MFN) duty free access to Canada's market. With the entry into force of the 
Agreement, in 2015, 1 of the 18 tariff lines, which were dutiable, became duty free for exports 
from Korea. Of the 17 remaining dutiable tariff lines, 2 became duty-free in 2016; the remaining 
lines are to become duty free in 2017 (8 lines); 2019 (3 lines); 2024 (1 line); and 2025 (3 lines). WT/REG362/1 
 
- 51 - 
 
  At the end of the implementation period, none of the lines covering Korea's top 25 global exports 
will be dutiable.  
Table A1.2 Canada: Market access opportuniti es under the agreement for Korea's top 25 
exports to the world 
Korea's top export products  
in 2012 -2014 Access Conditions to Canada's import markets 
HS number and description 
of the product Share 
in 
global 
exports 
(%) MFN 2015 No. of duty free lines 
under the agreement 
Remain 
Dutiable Average 
MFN 
applied 
rate 
(%) No. of 
dutiable 
lines No. 
of 
duty 
free 
lines 
2015 
2016 
2017 
2019 
2024 
2025 
271019 -- other 7.2 1.0 1 4   1           
870323 -- of a cylinder 
capacity exceeding 
1,500 cc but not 
exceeding 3,000 cc 4.9 6.1 1       1         
901380 - other devices, 
appliances and instruments 4.6 0.0   1               
854232 -- memories 4.0 0.0   1               
854231 -- processors and 
controllers, whether or not combined with memories, converters, logic circuits, amplifiers, clock and timing circuits, or other circuits 3.6 0.0   1               
890190 - other vessels for 
the transport of 
goods and other 
vessels for the 
transport of both 
persons and goods 2.6 21.7 3         2   1   
870899 -- other 2.4 3.3 5 4 1   4         
851712 -- telephones for 
cellular networks or 
for other wireless 
networks 2.3 0.0   1               
271012 -- light oils and 
preparations 2.0 1.7 1 2   1           
890120 -tankers 2.0 25.0 2         1   1   
851770 - parts 1.9 0.0   1               
890590 - other 1.8 11.3 2 2         1 1   
852990 - other 1.3 0.0   11               
870332 -- of a cylinder 
capacity exceeding 
1,500 cc but not 
exceeding 2,500 cc 1.1 6.1 1       1         
870322 -- of a cylinder 
capacity exceeding 1,000 cc but not exceeding 1,500 cc 1.0 6.1 1       1         
853190 - parts 0.9 0.0   2               
853400 Printed circuits. 0.8 0.0   1               
847330 - parts and 
accessories of the 
machines of heading 
84.71 0.8 0.0   3               
290243 -- p-xylene 0.8 0.0   1               
854239 -- other 0.7 0.0   1               WT/REG362/1 
 
- 52 - 
 
  Korea's top export products  
in 2012 -2014 Access Conditions to Canada's import markets 
HS number and description 
of the product Share 
in 
global 
exports 
(%) MFN 2015 No. of duty free lines 
under the agreement 
Remain 
Dutiable Average 
MFN 
applied 
rate 
(%) No. of 
dutiable 
lines No. 
of 
duty 
free 
lines 
2015 
2016 
2017 
2019 
2024 
2025 
854140 - photosensitive 
semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light emitting diodes 0.7 0.0   1               
842952 -- machinery with a 
360? revolving 
superstructure 0.7 0.0   1               
870324 -- of a cylinder 
capacity exceeding 3,000 cc 0.7 6.1 1       1         
854370 - other machines 
and apparatus 0.6 0.0   1               
291736 -- terephthalic acid 
and its salts 0.5 0.0   1               
  TOTALS 49.5 3.9 18 40 1 2 8 3 1 3 0 
Note: For the calculation of averages, specific rates are excluded and the ad valorem  parts of alternate 
rates are included. 
 Based on the HS 2012 nomenclature. 
Source: WTO estimates based on data provided  by Canada and UNSD, Comtrade database. 
 
Korea 
3. Table A1.3 shows tariff liberalization by Korea in relation to imports from Canada (by total, 
agricultural and non-agricultural products). In 2015, Korea's average applied MFN rate was 14.1% 
overall (6.6% for non-agricultural products and 59 .9% for agricultural products). 16% of Korea's 
tariff was duty free on an MFN basis; 17.75% of no n-agricultural products and 5.5% of agricultural 
products were duty free. At the time of entr y into force of the Agreement (2015), Canada's 
exporters enjoyed an absolute margin of preference of 5.7% vis-à-vis  the prevailing MFN tariff; 
5.6% for non-agricultural goods and 6.6% for agricultural products. The share of duty free lines 
applicable to imports from Canada immediately at  the entry into force of the Agreement was 80% 
(26.94% for agricultural products and 88.71% for no n-agricultural products). During the following 
years, this share of duty-free tariff lines will further increase to reach 97.7% in 2025, ten years 
after the entry into force of the Agreement (99.9%  for non-agricultural products and 84.18% for 
agricultural products). In 2032, by which time  Korea will have fully implemented its tariff 
elimination programme the share of duty free lines applicable to imports from Korea will be 97.9% (85.57% for agricultural products and 99.98% for non-agricultural products). WT/REG362/1 
 
- 53 - 
 
  Table A1.3 Korea, Republic of: Indicators of  MFN tariff rates and preferential rates for 
imports from Canada 
Origin 
of 
goods Year ALL PRODUCTS Agricultural productsa Non-agricultural products 
Average applied 
tariff Share 
of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share 
of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share 
of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) 
MFN 2015 14.1 16.8 16.0 59.9 63.4 5.50 6.6 8.0 17.75 
Canada 2015 8.4 41.9 80.0 53.3 72.9 26.94 1.0 8.9 88.71 
2016 7.7 38.3 80.0 49.8 68.2 26.94 0.7 6.6 88.71 
2017 6.9 45.3 84.7 46.3 75.9 38.93 0.5 6.1 92.16 
2018 6.4 41.6 84.7 43.2 70.8 38.93 0.3 4.2 92.16 
2019 5.8 67.4 91.3 40.3 87.4 53.82 0.2 7.2 97.49 
2020 5.4 62.5 91.4 37.4 81.3 53.94 0.1 6.0 97.49 
2021 5.0 58.6 91.4 34.8 76.7 54.58 0.1 4.7 97.50 
2022 4.6 54.1 91.4 32.3 71.1 54.58 0.1 3.5 97.50 
2023 4.2 49.6 91.4 29.8 65.5 54.58 0.1 2.1 97.50 
2024 3.8 136.6 97.2 27.0 144.2 81.29 0.0 8.8 99.82 
2025 3.7 159.8 97.7 26.1 165.2 84.18 0.0 11.0 99.90 
2026 3.7 164.2 97.8 26.0 165.2 84.24 0.0 30.0 99.98 
2027 3.7 165.5 97.8 25.9 166.5 84.41 0.0 30.0 99.98 
2028 3.7 164.9 97.8 25.9 165.9 84.41 0.0 30.0 99.98 
2029 3.6 173.1 97.9 25.3 174.2 85.46 0.0 30.0 99.98 
2030 3.6 173.2 97.9 25.3 174.4 85.52 0.0 30.0 99.98 
2031 3.6 173.2 97.9 25.3 174.3 85.52 0.0 30.0 99.98 
2032 3.6 173.9 97.9 25.3 175.0 85.57 0.0 30.0 99.98 
a WTO Definition. 
Note: For the calculation of averages, specific rates are excluded and the ad valorem  parts of alternate 
rates are included.  
 16 tariff lines under the Excluded category  reflect the MFN 2015 duties (footnote1). 
 Based on the HS 2012 nomenclature. 
Source:  WTO estimates based on data provided by Korea. 
 
4. Table A1.4 gives an indication of additional market access in Korea resulting from the entry 
into force of the Agreement for Canada's top 25 global exports, which accounted for 52.4% of its 
global exports in 2012-2014; these corresponded to 126 lines in Korea's tariff at the six-digit level 
(using the HS 2012). In 2015, prior to the entry into force of the Agreement, 20 of these tariff lines already had (MFN) duty free access to Korea's market. With the entry into force of the 
Agreement, in 2015, 85 of the 106 tariff lines, which were dutiable, became duty free for exports 
from Korea. The 21 remaining dutiable tariff lines will become duty-free in 2017 (16 lines); 2019 (4 lines); and 2024 (1 line). At the end of the impl ementation period, none of the lines covering 
Canada's top 25 global exports will be dutiable.  WT/REG362/1 
 
- 54 - 
 
  Table A1.4 Korea, Republic of: Market access opportunities under the agreement for 
Canada's top 25 exports to the world 
Canada's top export products in 2012-
2014 Access Conditions to Korea's import markets 
HS number and description of 
the product Share in 
global 
exports 
(%) MFN 2015 No. of duty free lines 
under the agreement 
Remain 
Dutiable Average 
MFN 
applied 
rate 
(%) No. of 
dutiable 
lines No. of 
duty 
free 
lines 
2015 
2017 
2019 
2024 
270900 Petroleum oils and oils 
obtained from bituminous minerals, crude. 18.1 3.0 10   10         
870324 -- of a cylinder 
capacity exceeding 
3,000 cc 6.0 8.0 4   4         
870323 -- of a cylinder 
capacity exceeding 1,500 cc but not exceeding 3,000 cc 4.1 8.0 4   4         
710812 -- other unwrought 
forms 3.4 3.0 2   2         
271121 -- natural gas 2.5 3.0 1   1         
271019 -- other 2.4 6.3 41   38 2 1     
440710 - coniferous 1.5 5.0 11     10   1   
271012 -- light oils and 
preparations 1.5 2.7 4 2 4         
310420 - potassium chloride 1.2 0.0   1           
270112 -- bituminous coal 1.2 0.0   4           
100199 -- other 1.1 2.1 5 1 5         
120510 - low erucic acid rape 
or colza seeds 1.1 5.0 1 1 1         
880240 - aeroplanes and other 
aircraft, of an unladen weight exceeding 15,000 kg 0.9 0.0   4           
470321 -- coniferous 0.9 0.0   2           
300490 - other 0.8 8.0 7     4 3     
870829 -- other 0.8 8.0 1   1         
260300 Copper ores and 
concentrates. 0.7 0.0   1           
760110 - aluminium, not 
alloyed 0.6 1.0 1   1         
760120 - aluminium alloys 0.6 1.7 3   3         
870899 -- other 0.6 8.0 6   6         
840734 -- of a cylinder 
capacity exceeding 
1,000 cc 0.5 8.0 2   2         
480100 Newsprint, in rolls or 
sheets. 0.5 0.0   1           
271600 Electrical energy. 
(optional heading) 0.5 5.0 1   1         
260111 -- non-agglomerated 0.5 0.0   3           
750210 - nickel, not alloyed 0.5 3.0 2   2         
Total of above 52.4 4.8 106 20 85 16 4 1 0 
Note: For the calculation of averages, specific rates are excluded and the ad valorem  parts of alternate 
rates are included. 
 Based on the HS 2012 nomenclature. 
Source: WTO estimates based on data provid ed by Korea and UNSD, Comtrade database. 
 
__________