WT/REG359/M/1  
 
12 July 2016  
(16-3730)  Page: 1/4  
Committee on Regional Trade Agreements 
Eighty-first Session   
 
 FREE TRADE AGREEMENT BETWEEN THE REPUBLIC OF KOREA AND AUSTRALIA 
(GOODS AND SERVICES) 
NOTE ON THE MEETING OF 27 JUNE 2016 
Chairman: Ambassador Daniel BLOCKERT (Sweden) 
1.1.  The 81st Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/RTA/6/Rev.1 dated 16 June 2016. 
1.2.  Under Agenda Item C.II of the session, the CRTA considered the Free Trade Agreement 
between the Republic of Korea and Australia, good s and services, (hereinafter "the Agreement"). 
1.3.  The Chairman noted that the Agreement had entered into force on 12 December 2014. It had 
been notified to the WTO by the Parties on 22 December 2014 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/REG350/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/786). 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/REG359/1 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 
had been distributed in documents WT/REG359/2 and WT/REG359/2/Add.1 dated 23 May 2016 and 14 June 2016 respectively. He proposed to organize the consideration of the Agreement by 
first asking the Parties and then other Members to give any general comments, after which he 
would turn to the specifics of the Agreement. 
1.5.  The representative of Australia appreciate d the opportunity to present the Agreement to the 
Committee. Australia valued the Committee's work to ensure transparency of regional trade 
agreements (RTAs) and evaluate the Agreement's consistency with WTO rules. 
1.6.  On 22 December 2014, Australia and Korea had notified the Agreement to the WTO. The 
Agreement had been signed in April 2014 and had entered into force on 12 December 2014. The 
Agreement was of high-quality and comprehensive and built on Australia and Korea's significant 
and highly complementary economic relationship. Korea was Australia's third-largest export market and fourth-largest overall trading partner. 
1.7.  The Agreement had already been delivering new business opportunities for Australian 
business, and its institutional framework had been working well. It had met all of the criteria of a high-quality agreement that promoted growth in goods and services trade: it was fully consistent 
with WTO principles and rules; it delivered WT O-plus outcomes; and it was comprehensive and 
provided substantial liberalisation across all sectors. 
1.8.  The Agreement had met the WTO threshold requirement that an agreement cover 
"substantially all trade" between the Parties: Australia would eliminate 100% of its tariffs on 
Korean goods; 99.8% of Australian goods exports would enter Korea duty free on full 
implementation. The Agreement also contained WTO-plus outcomes on services. Australia's WT/REG359/M/1 
 
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  commitments included increasing the bound Foreig n Investment Review Board horizontal threshold 
applying to its specific services commitments, as  well as additional sector-specific commitments. 
The Agreement had gone beyond Korea's existi ng commitments to Australia under the GATS, 
including in key areas of commercial interest such as financial, education, legal and 
telecommunications services. 
1.9.  The Agreement had also included measures which assisted companies doing business in 
Australia and Korea, including business-friendly rules of origin provisions. For example, Australian 
and Korean goods exporters had the option to se lf-certify under the Agreement. The Agreement 
had provided enhanced protections and certainty for Australian and Korean investors with provisions to ensure non-discrimination, and protection and security for investments. 
1.10.  He thanked the WTO Secretariat for compiling the Factual Presentation and Korean 
colleagues for their cooperation in preparing for the review. He also thanked Members for their 
questions, both in writing and those to be provid ed during this meeting and looked forward to a 
fruitful discussion of the Agreement. 
1.11.  The representative of the Republic of Korea thanked the Secretariat for preparing the 
meeting and the Factual Presentation, and Members for their interests and insightful questions on 
the Agreement. He also thanked Australia for its cooperation in jointly preparing for the session 
with Korea. 
1.12.  As Australia had pointed out, Korea also saw great merits in the Transparency Mechanism 
on RTAs. The procedure allowed Members to be informed of recent developments on other Members' RTAs and provided opportunities for deeper understanding on them.  
1.13.  The Agreement was a commercially significant free trade agreement. As of 2015, the first 
full year after its entry into force, Australia wa s Korea's eighth largest trading partner and two-way 
trade in goods was valued at US$27.3 billion. Korea's exports to Australia were valued at US$10.8 
billion, which ranked Australia as Korea's tenth largest export destination. Australia was also the 
eighth largest importer of Korean  goods, valued at US$16.4 billion. 
1.14.  Trade between Korea and Australia was mutually complementary as Korea exported 
industrial products such as automobiles, auto parts and machinery to Australia while Australia 
exported natural resources and agricultural and livestock products to Korea, such as coal, iron ores and aluminium.  
1.15.  The Agreement was a comprehensive and high-standard trade agreement that had aimed at 
fostering a favourable environment for free trade and investment. In the area of goods, by 2016, 
three years following entry into force of the Agreem ent, duties on 83.8% of Korean tariff lines and 
92.8% of Australian tariff lines had already been eliminated, with virtually all remaining tariffs to 
be lifted by 2033. Korea believed that the Agreement was fully consistent with the WTO obligations 
of both countries and it had built upon and went further than their WTO commitments in many areas.  
1.16.  In regard to services and investment, th e Agreement had provided GATS-plus outcomes for 
the Parties' respective service suppliers, including but not limited to business, educational, communication, construction, distribution, environment, and tourism services.  
1.17.  The Agreement's disciplines and commitments had gone beyond market access in goods 
and services and extended to other important area s of movement of natural persons, government 
procurement, and intellectual property rights at WTO-plus levels. It had also featured components 
to further strengthen the complimentary bilateral trade structures. Specifically, it had a separate 
chapter for Cooperation which provided details on closer cooperation in the fields of agriculture, 
fisheries and forestry and energy and mineral resources.  
1.18.  The Agreement had been expected to largely contribute to the sound expansion of the 
Parties' bilateral trade. Already, Korean industries had been enjoying immediate benefits from the 
FTA in the sectors of automobiles, auto parts, and home appliances, as the tariff rates of these products had already been eliminated. At the same time, Australian industries had also been WT/REG359/M/1 
 
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  enjoying the benefits of the FTA for products such as wine, sugar, beef, malt, cherry and 
petroleum.  
1.19.  On behalf of the Korean delegation, he again thanked all Members for their participation in 
the session and the Secretariat for its hard work. He looked forward to a fruitful discussion. 
1.20.  The representative of the European Union thanked the Parties for their comprehensive 
presentations and the Secretariat for the Factual Presentation. The EU noted that the Agreement 
contained several WTO plus or WTO-beyond provisions and recognized that it was one of the most 
complementary relationships in the Asia-Pacific region. The EU also noted the tariff opportunities 
through tariff elimination in a broad range of sectors notably, agricultural and food products, forestry and value-added wood products, and fish  and seafood products for both Parties. The 
regulatory provisions on trade in goods had built on the WTO TBT Agreement with strengthened 
cooperation particularly on transparency requiremen ts which the EU considered to be an important 
step. The EU also regarded these provisions as a good basis for enhancing transparency both at bilateral and multilateral levels. It was further worth highlighting that the Agreement included 
improved provisions on ISDS and on coop eration in energy and mineral resources. 
1.21.  The EU had submitted some questions in ad vance focusing on rules of origin, investment 
and intellectual property rights, and thanked the Parties for their responses. She asked for 
clarification on three further aspects. First, while the replies to the question on origin verification 
appeared to imply a broader range of discretion on the part of the importing Party's customs 
authorities the EU wished to know whether each Party intended to carry out the origin verification primarily based on the respective legal framework and/or domestic legislation. She also asked if 
the Parties could clarify what kind of assistance the importing Party was expected to request from 
the customs administration in practical terms and whether it was limited to the validity of the certificate of origin or did it aim at broader cooperation. A second comment was on the reply by 
Australia on ex officio action on intellectual property rights, which was different from Australia's 
response during its Trade Policy Review in 2015 when  it had indicated that ex officio action was 
taken under certain very restrictive situations and that in most cases the rights holder needed to 
submit notice via the courts. The wording in the Agreement (Article 13.9) seemed to have 
indicated something more comprehensive than simply "a false trade description". She asked Australia to clarify this aspect further. A final remark concerned trade facilitation. The EU had noted the rather limited number of provisions and wondered why there were no provisions on fees 
and authorized economic operators in the Agreement.  
1.22.  The representative of Canada thanked Australia and Korea for their presentations as well as 
the Secretariat for preparing the Factual Presenta tion. Canada had submitted questions in writing 
to which it had received responses and had no follow up questions. 
1.23.  The representative of Thailand thanked Au stralia and Korea for their presentations and to 
the Secretariat for preparing the Factual Presentation. Thailand thanked the Parties for their 
responses to its questions on rules of origin, trade in services and competition and reserved the 
right to come back with any follow up questions. 
1.24.  The representative of the Separate Custom s Territory of Taiwan, Penghu, Kinmen and Matsu 
(hereinafter, Chinese Taipei) thanked the Parties fo r their presentations and for their responses to 
questions posed on services, investment and energy  cooperation. Chinese Taipei would come back 
with follow up questions if needed. 
1.25.  The representative of Colombia thanke d the Parties for their presentations and the 
Secretariat for the Factual Presentation. She also thanked the Parties for their responses to 
Colombia's questions on intellectual property rights and wished them every success in this process. 
1.26.  The representative of Mexico thanked the Parties for their presentations and to the 
Secretariat for the Factual Presentation. He also thanked the Parties for their responses to Mexico's 
questions on the environment, anti-dumping, an d competition, which were being considered 
closely in capital, and to which Mexico may come back for more details. WT/REG359/M/1 
 
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  1.27.  The representative of Peru thanked the Parties for their presentations and responses 
especially with regard to customs cooperation and wished them success with the consideration 
process. Peru might come back with follow up questions. 
1.28.  The representative of Australia thanked the Members for their questions which the Parties 
stood read to respond to. He said it was a good  Agreement that the Parties were proud of and 
were willing to explain fully any issues. The questi ons raised by the EU were quite technical and so 
it was his preference that the questions be referred back to capital for answers.  
1.29.  The representative of the Republic of Korea said he could provide some preliminary 
responses orally at the meeting which could be followed up with detailed answers in writing. On 
origin verification he noted that Korea had several RTAs which followed two different kinds of verification processes (direct and indirect verification). Direct verification was used in RTAs with 
the US, Chile, Singapore, Australia and New Zealand,  while indirect verification was followed in 
RTAs with the EU, EFTA, and Turkey. There was al so a mixed approach which had been used in 
RTAs with ASEAN, India, China, Vietnam, Peru and Colombia. Under the Agreement customs 
cooperation took a broad approach as both Parties' customs offices had Committees which could 
meet annually to discuss origin verification and also certification of origin but also other issues concerning trade facilitation. On the question on trade facilitation, he did not have the information 
but would be happy to provide a response in writing if the question could be provided in writing.  
1.30.  The Chairman said that the consideration of the Goods and Services Aspects of the Free 
Trade Agreement between the Republic of Korea and Australia had allowed the Committee to 
clarify a number of questions and it 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 forward submission s in writing to the Secretariat by 4 July 2016 and 
Parties were asked to submit replies in writing by  no later than 18 July 2016. In accordance with 
paragraph 13 of the Transparency Mechanism all wr itten 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.  
1.31.  The Committee took note of the comments made. 
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