WT/REG362/M/1  
 
3 May 2016  
(16-2473)  Page: 1/5  
Committee on Regional Trade Agreements 
Eightieth Session   
 
FREE TRADE AGREEMENT BETWEEN CANADA AND THE REPUBLIC OF KOREA  
(GOODS AND SERVICES) 
NOTE ON THE MEETING OF 5 APRIL 2016 
Chairman: Ambassador Daniel Blockert (Sweden) 
1.1.  The 80th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/RTA/5/Rev.1 dated 24 March 2016. 
1.2.  Under Agenda Item D.II of the session, the CRTA considered the Free Trade Agreement 
between Canada and the Republic of Korea, good s and services, (hereinafter "the Agreement"). 
1.3.  The Chairman said the Agreement had entered into force on 1 January 2015. It had been 
notified to the WTO by the Parties on 20 January 2015 under Article XXIV:7(a) of the GATT 1994 
and the Understanding on the Interpretation of Article XXIV of GATT 1994 as an Agreement 
establishing a free trade area (document WT/REG362/N/1) and under GATS Article V:7(a) as an 
Agreement providing for the liberalization of trade in  services within the meaning of Article V of the 
GATS (document S/C/N/789). The text of the Agreement was available, together with its Annexes, 
on the Parties' official websites. 
1.4.  The Factual Presentation on the goods an d services aspects (document WT/REG362/1 dated 
21 January 2016) had been prepared by the Secr etariat on its own responsibility in full 
consultation with the Parties, in accordance with paragraph 7(b) of the Transparency Mechanism 
for Regional Trade Agreements (document WT/L/6 71). In addition, written questions and replies 
on the Agreement had been distributed in document WT/REG362/2 dated 30 March 2016. A very late question had been received from El Salvador and had been transmitted to the Parties. 
1.5.  He proposed to organize the consideration of the Agreement by first asking the Parties and 
then other Members to give any general comments. He would then turn to the specifics of the Agreement. 
1.6.  The representative of Korea thanked the Secr etariat for preparing the factual presentation, as 
well as Members for their great interest and insightful questions regarding the Agreement. She 
also thanked Canada for jointly preparing answers with Korea for the Committee's assessment of the Agreement. She hoped that the meeting would be helpful for WTO Members to better 
understand the Agreement.  
1.7.  Trade between Korea and Canada stood at US$9.5 billion as of 2015, and that figure had 
even surpassed the US$10 billion mark in 2011. Canada, the world's 10th largest economy, was 
Korea's 24th largest trading partner in 2015 with a trade volume of nearly US$10 billion. The two 
countries shared complementary economic structures. Korea exported industrial products such as automobiles, semi-conductors and cell phones to Canada while Canada exported agricultural and 
livestock products and natural resources to Korea, such as coal, wheat, copper, meat and pulp.  
1.8.  Under the Agreement, both Korea and Cana da would receive duty-free access on 97.5% of 
tariff lines within 10 years for industrial goods. In terms of import value, 98.4% of Korea's tariffs and 98.7% of Canada's tariffs were to be eliminated within the same period, achieving a high-level 
of liberalization in goods. In particular, nearly all industrial and forest products would be liberalized WT/REG362/M/1 
 
- 2 - 
 
  within 5 years. Even in agricultural products, Korea had promised to eliminate 88.4% of its tariffs 
and Canada 99.9% of its tariffs based on import value within 10 years.  
1.9.  Regarding services and investment, the Agreement had included the general principles of 
national and most-favoured nation treatment. Th e level of liberalization in the Agreement was 
almost on par with the Korea-US FTA and the Korea-EU FTA. For example, the Agreement had 
guaranteed no less favorable treatment for the other Party than for non-Parties of other agreements signed after the Agreement's entry in to force, except in aviation, fisheries and 
maritime matters. In addition, unlike the "posit ive-list approach" adopted by the WTO GATS, the 
Agreement had taken a "negative-list approach" like the Korea-US FTA which had aimed at a relatively higher level of liberalization.  
1.10.  Both countries had also agreed to pursue a high level of liberalization in Government 
procurement and intellectual property rights in consideration of the revised WTO Government 
Procurement Agreement (GPA) and the Agreemen t on Trade Related Aspects of Intellectual 
Property Rights (TRIPS), and had sought to achieve WTO-plus levels in other areas apart from 
goods. 
1.11.  The two year old Agreement was still in its early stages, so its potential benefits had not 
fully materialized yet. However, over time, the Agreement was expected to produce tangible 
results through better market access and more investment.  
1.12.  Since the Agreement had gone into effect, Korea's exports of large sized motor vehicles to 
Canada had surged, and it had also started to export new products in processed food along with textiles and clothing. Korea's new export items included mushrooms, potatoes and sweet corn in 
processed food, as well as jerseys and cardigans of cashmere goats and baby garments and 
clothing accessories of cotton in the textile and clothing category. Canada's exports to Korea had also seen an upward trend in products such as lobsters, whole hides and skins, fish and seafood 
and canola oil. As the utilization of the Agreem ent had continually increased since its entry into 
force, she was confident that both countries would increasingly enjoy greater benefits going forward. Furthermore, given the economic size and trade structures of the economies, the 
Agreement had huge potential for expanding trade, investment, natural resources development 
and people-to-people exchange. Therefore, she strongly believed that the Agreement would lead to a blossoming of exchange between the two partners. 
1.13.  The representative of Canada thanked the WTO Secretariat for publishing a detailed Factual 
Presentation on the Agreement, and was also appreciative of the Government of Korea's 
contribution to the process. He thanked WTO Me mbers for their insightful questions about the 
Agreement. He underscored the importance of the WTO factual presentation exercise in promoting 
greater transparency and enhancing WTO Members'  understanding of regional trade agreements 
(RTAs).  
1.14.  Before turning to the specific technica l aspects of the Agreement, he highlighted the 
overarching goal of Canada's trade agenda wh ich had been to increase trade and attract 
job-creating investment to Canada, focusing on expanding trade with large fast-growing markets and deepening trade links with traditional partners. This included pursuing multilateral, bilateral, and regional trade initiatives. Currently, Canada had 11 FTAs in force covering trade with 
15 countries, most of which had come into force since 2009.  
1.15.  A key component of Canada's trade agenda had been an enhanced focus on deepening 
engagement in the Asia-Pacific region, and Korea was an important partner for Canada in this 
context. The Agreement had constituted Canada's first free trade agreement in the Asia-Pacific 
region, and provided a robust framework for the continued growth and development of economic 
relations between the two countries. While it was still too early to assess the impact that the 
Agreement had had on bilateral trade and investment, it had become evident that Korean and 
Canadian firms had already begun to benefit. In 2015, bilateral merchandise trade between 
Canada and Korea had reached more than 11 billion Canadian dollars.  
1.16.  The Agreement was comprehensive, covering a wide range of sectors and aspects of 
Canada-South Korean trade, including market ac cess for goods, cross border trade in services, WT/REG362/M/1 
 
- 3 - 
 
  investment, government procurement, intellectual property, and an institutional framework 
including dispute settlement. 
1.17.  The elimination of tariffs on virtually all trade between Canada and South Korea was central 
to the Agreement. Upon full implementation, base d on current trade flows, over 99% of bilateral 
trade would be duty free. As of 1 January 2015,  the Agreement had provided for the immediate 
elimination of Canadian tariffs covering nearly 57.7% of total imports from Korea (during 2012-2014). The remaining tariff reductions were to be made in successive stages ranging from 
3 to 11 years. By that point, ab out 98% of Canada's tariff lines would be duty free, which covered 
essentially 100% of current Canadian imports from Korea.  
1.18.  Korea had provided for immediate elimination of tariffs on nearly 90% of total imports from 
Canada (during 2012-2014). Nearly all remaining tariffs on Canada's exports to Korea would be 
phased-out over a period ranging from 3 to 18 year s. With respect to agricultural tariffs, Korea 
would eliminate or reduce tariffs on 94% of Canada's current exports by the end of the 
implementation period. On the other hand, Canada would eliminate agricultural tariffs on 99% of 
Korean imports by the end of the implementation period. 
1.19.  Looking beyond tariff elimination, he note d ambitious outcomes in the area of services 
which would allow Canadian and South Korean service providers to benefit from increased, more 
transparent, and predictable access to each  other's market. The Agreement had provided 
improved market access beyond their respective commitments under the General Agreement on Trade in Services (GATS), including in a number of professional services (e.g. accounting and foreign legal consultancy services), as well as business and environmental services.  
1.20.  As noted, commitments had been scheduled on a "negative list" basis. The inclusion of a 
ratchet mechanism would ensure that services companies would automatically benefit from any autonomous liberalization of either country's re gulatory regime. The Agreement also ensured that 
concessions accorded by either Party to another trading partner in future free trade agreements 
would be extended automatically to Canadian and Korean service providers, with a few exceptions. 
1.21.  Turning to labour mobility, he said that the outcomes that had been achieved supported 
those achieved under the goods, services, and investment chapters. The Agreement included the 
removal of barriers to entry such as economic needs tests and also ensured that new barriers, such as quotas and proportionality tests, would not be introduced in the future. This would benefit several categories of highly-skilled business persons, including independent professionals, such as 
architects, engineers, and management consultants, as well as firms sending professionals to fulfil 
service contracts, for instance, in the field of science, engineering or information technology. 
1.22.  Canada and South Korea had enjoyed a well-established relationship in investment and 
there was considerable scope for expansion. The reciprocal investment rules in the Agreement had 
been aimed at bolstering two-way investment by establishing a more predictable, rules-based investment climate. As a result, the Agreement had provided investors with greater certainty, 
transparency and protection – including disciplines  against discriminatory and arbitrary treatment, 
protection from expropriation without prompt and adequate compensation, and access to independent international arbitration. These measures would encourage investment and continue to protect a government's right to regulate in the public interest.  
1.23.  The Chapter on standards-related measures  included a section dealing with automotive 
standards-related measures. The equivalency provisions in the Agreement would give Canadian automakers preferential access to the Korean mark et for cars built to key U.S. safety standards 
(as most Canadian manufacturers currently did) or UN ECE safety standards (as was necessary to 
export vehicles to the European Union and to many other markets). Provisions on new vehicle technologies and compliance testing procedures would also help to facilitate access to the Korean 
market. The Chapter also built on the WTO Agreement on Technical Barriers to Trade, 
incorporating all its substantive provisions and making them subject to the Agreement's dispute settlement provisions. 
1.24.  In the sanitary and phytosanitary measures  (SPS) Chapter, the Parties had re-affirmed their 
rights and obligations under the WTO SPS Agreem ent and had established an SPS Committee to 
enhance bilateral cooperation and consultation on SPS-related matters. WT/REG362/M/1 
 
- 4 - 
 
  1.25.  The Agreement also included a robust intell ectual property chapter. It included provisions 
that would contribute to a framework of regulatory certainty and thereby enhanced access to the Korean and Canadian markets respectively fo r individuals and firms that developed and 
commercialized innovative products. The Agreement's strong provisions on the enforcement of IP 
rights would ensure that Canadian and Korean IP rights-holders could do business with increased 
confidence in each other's market. 
1.26.  Regarding government procurement, Canadian goods and service providers now benefited 
from expanded market access on covered procurement by Korean central Government agencies, 
for contracts valued above $100 million Korean Won. This had built on the commitments that Canada and Korea had agreed to under th e WTO's revised Agreement on Government 
Procurement (GPA).  
1.27.  The Agreement also contained relevant chapters on a range of important matters, including: 
rules of origin; origin procedures and trade facilitation; trade remedies; monopolies and state enterprises; electronic commerce; and dispute-settlement and high standard labour and 
environment chapters.  
1.28.  To conclude, Canada looked forward to working closely with Korea to fully implement and 
further promote the Agreement so that both countries could capitalize on its many benefits. He 
welcomed questions and comments from Members.  
1.29.  The representative of the United States thanked the Secretariat and the Parties for their 
informative presentations. The United States commended the Parties, on what appeared to be a 
very broad ranging agreement on services an d investment, for the commitments they had 
undertaken above and beyond their GATS commitments which the Secretariat had attributed to 
the use of a negative list approach (paragraph 4. 47). The U.S. agreed that such an approach had 
in practice led to more ambitious outcomes in services trade negotiations and particularly 
commended Canada for the small number of reservations that it had taken for future restrictive 
measures. The U.S. believed this to be one of the more important objectives of an RTA negotiation. He apologized for a few late questions which he would also submit in writing to the 
Parties and would appreciate any responses. Paragraph 4.2 of the Factual Presentation referred to 
an exchange of letters between the Parties on regulations that prohibit an enterprise from 
concurrently holding two or more business licences to supply different services. He asked the Parties to explain the rationale and the content of regulations referred to in the paragraph. In the 
U.S's view it was common and understandable in modern economies that a single enterprise may 
engage in supplying numerous services. For exampl e a professional services firm could provide 
consulting, accounting and computer and related services.  
1.30.  The representative of the European Union also thanked the Parties and the Secretariat for 
their presentations which had brought an importan t insight into what the EU believed was a very 
comprehensive Agreement. The EU had submitted several questions in advance focusing on 
technical barriers to trade (TBT), regulatory provisions, intellectual property rights (IPRs), and 
transparency provisions. The EU welcomed the incr eased protection of IPRs in the Agreement and 
appreciated the responses provided by the Partie s to the questions from the EU especially on 
geographical indications (GIs). The EU had also taken good note of the replies which stated that 
there appeared to be no foreseeable conflict with Korea's commitments on GI protection in its FTAs 
with other trading partners. The EU also appreciated the WTO plus elements included in the article on transparency and agreed with the Parties that greater transparency would help both Korean 
and Canadian suppliers and provide greater predictability and certainty. She thanked the Parties 
for their responses and confirmed there were no additional questions. 
1.31.  The representative of Thailand welcomed th e Chairman and said Thailand looked forward to 
working with him. He thanked the Secretariat for its work and the Parties for their presentations 
and written responses to questions raised by Thailand which were being reviewed and Thailand reserved the right to come back with further questions in writing.  
1.32.  The representative of the Separate Custom s Territory of Taiwan, Penghu, Kinmen and Matsu 
(hereinafter Chinese Taipei) thanked the Partie s for their presentations and agreed that the 
Agreement was very comprehensive. She thanke d the Parties for their written responses to WT/REG362/M/1 
 
- 5 - 
 
  questions which were being reviewed and Chinese Taipei would come back to the Parties should 
there be further questions. 
1.33.  The representative of Canada said Canada  would provide a response to the question from 
the United States in writing. 
1.34.  The Chairman said that the consideration of the Goods and Services Aspects of the Free 
Trade Agreement between Canada and the Republic of Korea had allowed Members to clarify a 
number of questions and the Committee could now conclude oral discussion of the RTA in 
accordance with paragraph 11 of the Transparency  Mechanism. If any delegations wished to ask 
follow up questions they were invited to forwar d submissions in writing to the Secretariat by 
13 April 2016 and Parties were asked to submit replies in writing by no later than 27 April 2016. In accordance with paragraph 13 of the Transparency Mechanism all written submissions, as well as 
minutes of the meeting would be circulated promptly, in all WTO official languages, and would be 
made available on the WTO website. 
__________